20200306Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: MARCH 5,2020
RE:THE2OIT BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR RANDOM INVESTMENTS, LLC; CASE NO. GNR-T-20-03.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code $ 63-3029B(3Xa)(ii). 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
125,000 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 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 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.
THE APPLICATION
On January 28,2020, the Commission received an Application from Random
Investments, LLC (collectively "Random" or "CompBfly"), seeking approval of the equipment
for the broadband tax credit installed during calendar year 2017. In the Application, Random
IDECISION MEMORANDUM MARCH 5,2020
states that it o'is a real estate holding company. It has vertical assets (towers) that it leases to
related parties, Tekfinity, LLC and Tek-Hut, Inc., which provide fixed and wireless broadband
internet to customers in Southern ldaho." The Company asserts that its related parties seruice
approximately 2500 customers in ldaho. Random invested approximately $62,861 .42 in2017 in
qualiffing broadband equipment that it conlirms 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 g 63-30291(3Xb). 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.
COMIVIISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. GNR-T-20-03 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the Idaho Tax Commission?
-rr'
Daniel Klein
UdmemoVGNR-T-20-03 2017 Random Broadband Tax Credit dec memo
DECISION MEMORANDUM -2-MARCH 5,2020