20180720Decision Memo.pdf

DECISTON MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIOTIER RAPER
COMMISSIOII-ER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DAI\IIEL KLEIN
DATE: JULY 17,2018
RE:cusTER TELEPHONE COOPERATIVE, INC'S 2017 BROADBAND
EQIIIPMENT TAX CREDIT; CASE NO. CUS-T-18-01.
BACKGROT]ND
In 2001, House B.ill377 was enacted authorizing income tax credit for the installation of
qualifuing broadband infrastructure in ldaho. ldaho Code $ 63-30298(3XaXii). In particular,
Section 63-3029I allows a taxpayer to receive an investrnent 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 camier, it must also be "necessary to the provision of broadband services
and an integral 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 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 Idatro Tax Commission.
1DECISION MEMORANDT]M JULY 17,24$
THE APPLICATION
On June 20,2A18, the Commission received an Application from Custer Telephone
Cooperative, Inc. ("Custer Telephone" or "Company"), seeking approval of the equipment for
the broadband tax credit installcd during calendar year 2017. In the Application, Custer
l'elephone states that it installed broadband equipment associated with Fiber to the Home
(FTTH) and Symmetrical Digital Subscriber Line (SDSL). Custer Telephone 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 63-3029L The Company
estimates that more than92% of its Idaho customers have subscribed to its broadband network
within its designated service areas. Custer Telephone invested approximately $1,128,091 in
2017 in qualifying broadband equipment that it confirms is integral to the broadband network
STAFF REVIEW AIID 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, Idaho Code $ 63-3029(3)(b). Statr, 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 Comrnission wish to issue an Order confirming the equipment identified in
Case No. CUS-T-18-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/cus-t-18-01 2017 Custer Telephone Broadband Tax Credit dec memo
DECISION MENIORANDUM -2-JULY 17,2OI8