20180615Decision Memo.pdf

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DECISION MEMORANDUM
TO:C OMTT,TIS SI OI\TER KJELLANDER
COMMISSIONER RAPER
COMIIfl SSIONER Ai\IDERSON
COMMISSION SECRETARY
LEGAL
WORKING T'ILE
FROM: DANIEL KLEIN
DATE: JUNE 12,7018
FILER MUTUALTELEPHONE COMPANY'S 2OI7 BROADBAND
EQUIPMENT TAX CREDIT; CASE No. FILT-18-01
BACKGROTJI\ID
In 2001, House Btll377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXiD. In pa(icular,
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 atarute of at least 200,000 bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber." Idaho Code $ 63-3?91(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 Code $ 63-30291(3)(bxi), 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 arrd ldaho Code $ 63-3029I(4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tax credit, an order along with the
original Applicalion is forwarded to the Idaho Tax Commission.
IDECISION MEMORANDUM JtrNE 12,2018
THE APPLICATION
On May 8,2018, the Commission received an Application from Filer Mutual Telephone
Company ("Filer Mutual" or "Company"), seeking approval of the equipment for the broadband
tax credit installed during calendar year 2017. In the Application, Filer Mutual states that it
made certain investments that constitute "qualified broadband equipment." Filer Mutual
discloses that its broadband network has data transmission rates of 5 l2kb to l0Gbps which meets
the required rates of 200,000 bits per second to a subscriber and 125,000 bits per second from a
subscriber. The Company asserts that99Yo of its Idaho subscribers have access to the broadband
network. Filer Mutual invested approximately $3,662,732 n2017 in qualiffing broadband
equipment ttrat it confirms is integral to the broadband network
STAFF' REYIEW 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)0). Stafq 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 confirrning the equipment identified in
Case No. FIL-T-18-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmcmos/Fll-T-18-01 2017 L-iler Mutual Broadband Tax Credit
DECISION MEMORANDUM a JUNE I2,2OI8
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