20180720Decision Memo.pdf

RE
DECISION MEMORANDUM
TO COMMIS SIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DAI\IEL KLEIN
DATE: JULY 17,2018
CUSTER TELEPHONE BROADBAND SERVICES, LLC'S 2017
BROADBAND EQUIPMENT TAX CREDIT; CASE NO. CTB-T-18-0I.
BACKGROTIND
In 2001, House Bill377 was enacted authoriziag income tax credit for the installation of
qualiffing broadband infrastructure in Idaho. Idaho Code $ 63-3029B(3)(a)(ii). [n particular,
Section 63-3029I allows a taxpayer to receive an invesfrnent 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
telecornmunications carrier, it must also be "necessary to the provision of broadband services
and an intcgral part of a broadband network." Idaho Code $ 63-30291(3XbXi). To be eligible
for the tax credit, the taxpayer must obtain frorn the Commission an Order confirming that the
installed equipment meets the statutory definition of qualificd broadband equipment. Procedural
Order No. 28784 and ldaho Code $ 63-30291(4). Once the Commission as determined the
installed equipment is eligible fnr the broadband equipment tax credit, an order along with the
original Application is forwarded to the ldaho Tax Commission.
DECISION MEMORANDUM -l-ruLY n,2018
THE APPLICATION
On June 20,2018, the Commission received an Application from Custer Telephone
Broadband Services, LLC ("CTBS" or "Compffiy"), seeking approval of the equipment for the
broadbaad tax credit installed during calendar year 2017. In the Application, CTBS states thal it
installed broadband equipment associated with Cable Modem High Speed Interent, Fixed
Wireless High Speed [nternet, and Cable Television (CATV). CTBS discloses that its broadband
network has data transmission rates of 256,000 to 10,000,000 bits per second from a subscriber
and 256,000 to 10,000,000 bits per second to a subscriber. These rates exceed the minimum
statutory speed requirements pursuant to ldaho Code 6i-3029L l'he Company estimates that
more than 72o/o of its Idaho customers have subscribed to its broadband network within its
designated service areas. CTBS invested approximately $1,069,488 in 2017 in qualifying
broadband equipment that it confirrns is integral to the broadband network
STAF'F REVTEW AND RECOMMENDATION
Staffhas 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 confirming the equipment is qualified broadband equipment and forward the
approving Order along with a copy o{'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. CTB-T-18-01 is qualified broadband equipment as defined n ldaho Code $
$4A29I(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
lJdmemos/ctb-t-18-01 2017 CTBS Broadband Tax Credit dec memo
DECISION MEMORANDUM a JULY 77,2018
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