Broadband Equipment Sales Tax Exemption.

2025-2026 Session Introduced by Ray Pickett

HB 898 exempts from sales tax equipment, parts, electricity, and services used by ISPs or their contractors for broadband deployment, reducing costs to buildout.

Passed 1st Reading

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Purpose / Intent

HB 898 creates a targeted sales tax exemption intended to lower the cost of broadband infrastructure deployment by exempting sales of certain equipment, parts, services and electricity when sold to internet service providers (ISPs) or contractors they employ. The stated policy goal is to encourage expansion and operation of internet service access by reducing tax-related costs for providers and installers.

Key provisions

Amends G.S. 105‑164.13 by adding new subdivision (5r).

Creates a sales tax exemption for:

Sales to an ISP or to a contractor employed by an ISP of equipment, parts, accessories, and other tangible personal property used in providing internet service access — regardless of where the property is located.
Tangible property used to transmit, convey, amplify, or route information or data (e.g., fiber, switches, routers, wireless radios, amplifiers).
Related property and equipment that supports broadband infrastructure.
Sales of electricity used to power exempt broadband equipment.
Sales of goods and services to apply, install, maintain, operate, and repair the exempt tangible personal property.

Broad wording includes both hardware and related installation/maintenance activity.

Who or what is affected

Primary beneficiaries: internet service providers and contractors hired to install/maintain broadband infrastructure operating in North Carolina.

Indirect beneficiaries: end users and communities that may see faster or more extensive broadband deployment over time due to lower provider costs.

Tax administration: Department of Revenue must apply the exemption when qualifying sales fall within the statute.

Fiscal and policy implications

Revenue impact: The bill will reduce State (and potentially local) sales tax receipts to the extent qualifying sales would otherwise have been taxed. No revenue estimate is included in the text; the magnitude depends on provider spending and how broadly the exemption is claimed (notably the provision applies “regardless of where such property is located”).

Economic impact: By lowering upfront and operating costs for ISPs and contractors (including electricity and installation costs), the measure is likely intended to incentivize broadband buildout and lower barriers to network upgrades.

Administrative considerations: The exemption’s scope (equipment vs. associated services, in‑state vs. out‑of‑state property) may require clarifying guidance from the Department of Revenue to avoid disputes.

Legislative status & effective date

Introduced by Representative Pickett.

Effective date (per bill text): July 1, 2025; applies to sales made on or after that date.

Procedural status at last update: Read first time (March 6, 2025) and referred to committee (State Affairs / Finance as applicable).

If you want, I can:
- Draft potential Department of Revenue guidance language to clarify application (e.g., in‑state installation vs. out‑of‑state property, documentation required); or
- Summarize likely fiscal impact scenarios and the data needed for an estimate.

Bill