20190726Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JULY 25,2019
CUSTER TELEPHONE BROADBAND SERVICES, LLC'S 2OI8
BROADBAND EQUIPMENT TAX CREDIT; CASE NO. CTB-T-I9-01.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-30291allows 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
I25,000 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 provision of broadband services
and an integral part of a broadband network." Idaho C:ode $ 63-30291(3XbXi). To be eligible
for 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 eligible for the broadband equipment tax credit, an order along with the
original Application is forwarded to the Idaho Tax Commission.
DECISION MEMORANDUM JULY 25,2019
RE:
I
THE APPLICATION
On May 31,2019, the Commission received an Application from Custer Telephone
Broadband Services, LLC ("CTBS" or "Company"), seeking approval of the equipment for the
broadband tax credit installed during calendar year 2018. In the Application, CTBS states that it
installed broadband equipment associated with Cable Modem High Speed Internet, Fixed
Wireless High Speed Internet, and Fiber to the Home High Speed Internet Fiber Optic Fed 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 ro 10,000,000 bits per
second to a subscriber. These rates exceed the minimum statutory speed requirements pursuant
to ldaho Code $ 63-30291. The Company estimates that more thanTTo/o of its Idaho customers
have subscribed to its broadband network within its designated service areas. CTBS invested
approxinrately $622,556.43 in 2018 in qualifoing broadband equipment that it confirms is
inlegral to the broadband network.
STAFF REVIEW 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 $ 63-30291(3Xb). Stafl therefore. recommends that the Commission
issue an Order confirming the equipment is qualified broadband equipment and forrvard the
approving Order along with a copy of the original Applicatiorr to the Idaho Tax Commission.
COMMISSION DECISION
Does the Comrnission wish to issue an Order confirming the equipment identified in
Case No. CTB-T-19-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
t.ldmemos/CTB-T-19-01 2018 CTBS Broadband -l'ax Credit
DECISION MEMORANDUM a-L-JULY 2s.2019
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