Bill
HB 3643
Creates a broadband deployment equipment exemption (effective for property placed in service after 1/1/2026) across four Illinois taxes to cut providers' upfront deployment costs.
Title: USE/OCC TX-BROADBAND
Status and History
- Introduced: February 18, 2025 (Rep. Elizabeth "Lisa" Hernandez)
- Current status: Rule 19(a) / Re-referred to Rules Committee
- Legislative actions:
- 2025-02-18: First Reading; Referred to Rules Committee
- 2025-03-11: Assigned to Revenue & Finance Committee
- 2025-03-13: To Tax Policy: Other Taxes Subcommittee
- 2025-03-21: Rule 19(a) / Re-referred to Rules Committee
- 2025-04-28: Public hearing in subcommittee; left pending
- Primary sponsor: Rep. Elizabeth "Lisa" Hernandez
What the bill would do (purpose and intent)
- Create a targeted tax exemption for equipment and materials used in providing broadband services.
- The exemption would apply to property placed in service on or after January 1, 2026.
- Applicable across four Illinois tax Acts:
- Use Tax Act
- Service Use Tax Act
- Service Occupation Tax Act
- Retailers’ Occupation Tax Act
- The stated effect is to reduce or eliminate tax on essential infrastructure for broadband deployment, potentially lowering the up-front cost for broadband providers.
Key provisions and scope
- Amends multiple tax Acts to add a broadband-related exemption.
- The exemption applies to equipment and materials that are:
- Placed in service on or after January 1, 2026, and
- Incorporated into or used in the business of providing broadband services.
- Specificity on eligible items (e.g., fiber, network equipment, construction materials) is not enumerated in the excerpt provided, but the bill centers on equipment and materials used by broadband providers for network deployment and operation.
- Effective date language in the synopsis indicates immediate effect upon enactment, with the substantive eligibility tied to the 2026 in-service date.
Who would be affected
- Broadband service providers, including entities building out or expanding networks to deliver broadband services.
- Equipment manufacturers and suppliers of qualifying broadband deployment materials (to the extent their sales would fall under the exempt categories).
- Potentially downstream businesses in the broadband supply chain that purchase or lease qualifying property for use in broadband operations.
Potential fiscal and policy implications
- Tax base reduction: The exemption would reduce state tax collections from the four acts for eligible broadband-related purchases.
- Policy rationale: By reducing upfront tax costs, the bill aims to accelerate broadband infrastructure deployment and service availability.
- Administrative considerations: Implementing the exemption would likely require Department of Revenue rules to identify eligible property and verify in-service dates and use in broadband operations.
Notes
- The bill’s broad framing matches efforts to support broadband expansion by limiting tax barriers for essential deployment equipment.
- Readers should monitor subsequent committee actions and fiscal analyses to understand any clarified definitions, eligible item lists, and estimated revenue impact.
Compiled from official sources — confirm details with the bill’s official record.
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