20200306Decision Memo.pdf

RE
DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WOR]flNG FILE
FROM: DANIEL KLEIN
DATE: MARCH 5,2020
THE 2016 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR TEKFINITY, LLC; CASE NO. GNR-T-20-0S.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
quali$ing broadband infrastructure in Idaho. Idaho Code g 63-30298(3XaXii). In particular,
Section 63-3029I 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 $ 63-3291(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 g 63-30291(3XbXi). 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 Tekfinity, LLC
(collectively "Tekfinity" or "Compony"), seeking approval of the equipment for the broadband
tax credit installed during calendar year 2016. In the Application, Tekfinity states that it
DECISION MEMORANDUM MARCH 5,2020
"provides wired dark and lit fiber and wireless broadband intemet to customers in Southem
Idaho." Tekfinity discloses that its broadband network has data transmission rates between I
Mbps and 50 Mbps for subscriber downloads and uploads, which exceeds the required rates of
200,000 bits per second to a subscriber and 125,000 bits per second from a subscriber. The
Company asserts that its related parties service approximately 2500 customers in Idaho.
Tekfinity invested approximately 5244,213 in20l6 in qualifuing broadband equipment that it
confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staffhas 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 ldoho Code $ 63-30291(3Xb). Stafi 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. GNR-T-20-05 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/GNR-T-20-05 2016 Tekfinity Broadband Tax Credit dec memo
DECISION MEMORANDUM 2 MARCH 5,2020