20200619Decision Memo.pdf

RE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JUNE 19,2020
CUSTER TELEPHONE BROADBAND SERVICES, LLC'S 2019
BROADBAND EQUIPMENT TAX CREDIT; CASE NO. CTB-T-20-01
BACKGROTIND
In 2001. House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in ldaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-30291allor,r's a taxpayer to receivc 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 fiom a subscriber)' Itlaho 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 integralpart of a broadband network." Idaho Code $ 63-30291(3)(bxi). To be eligible
tbr 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 MEMORNNDUM JUNE 19,2020
THE APPLICATION
On June 2.2020, 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 2019. In the Application. CTBS states that it
installed broadband equipment associated with Cable Modem High Speed Internet. Fixed
Wireless l{igh 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 to 10.000,000 bits per
second to a subscriber. These rates exceed the minimum statutory speed requirements pursuant
to ldaho Code 5\ 63-3029I. The Company estimates that more lhan 52o/o of its ldaho customers
have subscribed to its broadband network within its designated service areas. CTBS invested
approximately $1.043,989.95 in 2019 in quali$ing broadband equipment that it confirms is
integral 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(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 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. CTB-T-20-01 is qualified broadband equipment as defined in ldaho Code
$ 63-3029f(3Xb) and forward it to the Idaho Tax Commission?
Udmernos/CTB-T-20-01 2019 CTBS Broadband Tax Credit
t
DECISION MEMORANDUM 2-
Daniel Klein
JTINE 19,2020