20200306Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLAN DER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSTON SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: MARCH 5,2020
RE:THE 2OI8 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
F.OR TEK-RF, LLC; CASE NO. GNR-T-20-08.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualilying broadband infrastructure in ldaho. Idaho Code $ 63-30298(3)(aXii). In particular,
Section $-3A291allows 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(3Xb). If the equipment is installed by a
telecommunications carrier, it must also be "necess&ry 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 detinition of qualitied broadband equipment. Procedural
Order No. 28784 and klaho Code $ $4A291(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 tbnvarded to the Idaho Tax Commission.
DECISION MEMORANDUM MARCH 5,2020
THE APPLICATION
On January 28,2020, the Commission received an Application tiom TUK-RF, t,LC.
(collectively "TEK-RF"'or "CompoDy"), seeking approval of the equipment fbr the broadband
tax credit installed during calendar year2018. In the Application. l-EK-Rf'srates that it
"provides support services lbr related entities, Tekfinity, LLC and Tek-Hut, Inc." via "2-way
radio and related services." TEK-RI? discloses that its broadband network has data transmission
rates between I Mbps and 50 N'tbps for subscriber downloads and uploacls, which exceeds the
required rates of 200,000 bits per second to a subscriber and I25,000 bits per second from a
subscriber. The Company asserts that its related parties service approximately 2500 customers in
ldaho. TEK-RF invested approximately $10,386.28 in ?018 in qualil,.,ing broadband equiprnent
that it confinns is integral to the broadband netu,ork.
S'I'AFF REVIEW AND RECOMMENDATION
Staff has reviewcd and audited the list of proposed broadband equipment and believes
the identified equipment qualifies lbr thc investment tax credit pursuanr to Procedural Order
No. 28784 and lclaho C'orle $ 63-30291(3)(b). Staff, therefcrre, recomnrends that the Commission
issue an Order confirming the equipment is qualified broadband equipment and lbrruvard the
approving Order along with a copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Cotnmission rvish to issue an Order confirnring the equipment identifled in
Case No. GNR-1"-20-08 is qualilied broadband equiprnent as defined in ldaho Cocle
$ 63-30291(3Xb) and forrvard it to the ldaho 'l'ax Commission?
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/.'---u; t4
Daniel Klein
Udrnemos/GNR-'l'-20-08 20 I 8 "l"ek-lt[: llroad hand l'ax Ctrcd it
,1DI]CISION MEMORANDUM MARCI-I 5,2020