20100830_3062.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 26, 2010
RE:SILVER STAR COMMUNICATIONS' 2009 BROADBAND EQUIPMENT
TAX CREDIT APPLICATION; CASE NO. SIL-I0-02.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code ~ 63-3029B(3)(a)(ii). In particular
Section 63-30291 allows 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
125 000 bps from a subscriber. Idaho Code ~ 63-3029I(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 ~ 63-3029I(3)(b )(i). 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 Idaho Code ~ 63-30291(4). Once the Commission has 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.
THE APPLICATION
On July 16 2010, the Commission received an Application from Silver Star
Communications (Silver Star) seeking approval of equipment for the broadband tax credit. In
the Application, Silver Star states that it installed equipment associated with Asymmetric Digital
DECISION MEMORANDUM - 1 -AUGUST 26, 2010
Subscriber Line (ADSL), Symmetrical Digital Subscriber Line (SDSL), and T -1 services with
transmission rates of 1.544 to 20 Mbps. Silver Star asserts that 180 of the 570 customers are
served or can be served by the broadband network. The Application states that Silver Star
invested approximately $537 000 in qualifying broadband equipment during 2009.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Silver Star and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No. 28784 and Idaho Code ~ 63-3029I(3)(b). Staff also believes that the expenditures
identified by Silver Star, a telecommunications provider, were for equipment that is "necessary
for the provision of broadband services and an integral part of a broadband network." Staff
therefore, recommends that the Commission issue an Order confirming the equipment is
qualified broadband equipment and forward the approving Order along with the 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. SIL-I0-02 is qualified broadband equipment as defined in Idaho Code ~ 63-3029I(3)(b)(i),
and forward it to the Idaho Tax Commission?
//h C.L *tt ~~.A-
Grace Seaman
i:udmemos/sil-IO-O2.doc
DECISION MEMORANDUM - 2 -AUGUST 26, 2010