20190215Decision Memo.pdf

RI
DECISION MEMORANDUM
TO COMMISSIONER KJELLANDBR
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECITETARY
LEGAL
WORKING FTLE
FROM:DANIEL KLEIN
FEBRUARY 14,2019DATE;
THE 2016 & 2017 BROADBAND EQUTPMENT TAX CREDIT
APPLICATION ROR COLUMBINE TELEPHONE COMPANY, INC;
CASII NO. COL-T-I8-02.
BACKGROUNI)
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualitying broadband infrastructure in ldaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-3029I allows a taxpayer to receive an investment tax credit for eligible broadband
equipment installed during a calendar year.
Qualified broadband equipment is defined as "those network facilities capable of
transmitting signals at a rate of at least 200,000 bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber." Idaho Code $ 63-3291(3)(b). If the equipment is installed by a
telecommunications carrier, it must also be "necessary to the pr<lvision of broadband services
and an integral part ol'a broadband network." Idaho Code $ 63-30291(3)(bxi) To be eligible
fbr the tax credit, the taxpayer must obtain from the Commission an Order confirming that the
installed equipment meets the statutory definition of qualified broadband equipment. Procedural
Order No. 28784 and ldaho Code $ 63-30291(4). Once the Commission as determined the
installed equipment is cligible for the broadband equipment tax credit, an order along with the
original Application is fcrrwarded to the Idaho Tax Commission.
DECISION MEMORANDUM 1 FEBRUARY L4,2OI9
THE APPLICATION
On December 18, 2018, the Commission received an Application from Columbine
Telephone Company, INC ("Columbine" or "Company"), seeking approval of the equipment for
the broadband tax credit installed during calendar year 7016 and,20l7. tn the Application,
Colurnbine states that it installed equipment associated with Asymmetric Digital Subscriber Line
(ADSL), Very High Speed Digital Subscriber Line (VDSL), and Fiber to the X (FTTX) service
with transmission rates of one to 50 Mbps upstream and one to 50 Mbps downstream, which
exceeds the required rates of200,000 bits per second to a subscriber and 125,000 bits per second
from a subscriber. The Company asserts that more than 50% of its ldaho subscribers have access
to the broadband network. The Cornpany invcsted approximately $1,286,216.57 in 20i6 and
approximately $827,856.83 in 2017 in quaiifying broadband equipment that it confirms is
integral to the broadband network,
STAFF' REVItrW AND RECOMMENDATION
Staff has reviewed and audited the list of proposed broadband equipment and believes the
identified equipment qualifies for the investment tax credit pursuant to Procedural Order
No. 28784 and ldaho Code $ 63-3029I(3)(b). Staff, therefore, recommends that the Commission
issue an Order conf,r-rming the equipment is qualifled broadband equipment and forward the
approving Order along with a copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. COL-T-19-02 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/COL-T-18-02 2016Z0l7 Columbine Telephone Company Inc Broadband Tax Credit
DECISION MEMORANDUM ^FEBRUARY I4,2OI9
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