20200925Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KIELLANDER
COMII{ISSIONER RAPER
COMMISSIOI{ER ANDERSON
COMMISSION SBCRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: SEPTEMBER 23,2020
RE:THE 2019 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR TEK.HUT,INC; CASE NO. GNR-T-20-I4.
BACKGROUNI)
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. ldaho Code S 63-3029B(3Xa)(ii). In particular,
Section $-3o291allows a taxpayer to receive an investment tilr( 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 200,0m bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber;' Idaho Code * 63-329I(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(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 Cade i 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 tdaho Tax Commission.
DECISION MEMORANDUM SEPTEMBER 23,2O2O
THB APPLICATION
On August 24,2020, the Commission received an Application from Tek-Hut, Inc.
(collectively "Tek-Hut" or "Company"), seeking approval of the equipment for the broadband
tax credit installed during calendar year 2019. In the Application, Tek-Hut states that it
"provides a high-speed packet switched, carrier class, core network using state of the art
wireless, technology in order deliver high speed reliable Internet services." Tek-Hut 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 frorn a subscriber. The Company asserts that its
related parties service approximately 2500 customers in ldaho. Tek-Hut invested approximately
$67,069 in 2019 in qualifying broadband equipment that it confirms is integral to the broadband
network.
STAFF REVIEW AND R"ECOMMENDATION
Staff has reviewed and audited the list of proposed broadband equipment and believes the
identified eguipment qualifies for the investment tax credit pursuant to Procedural Order
No. 28784 and ldaho Code * 63-3029(3Xb). Staff, therefore, recommends that the Commission
issue an Order confrrming the equipment is qualified broadband equipment and fonnard the
approving Order along with a copy of the original Application to the tdaho Tax Commission.
COMN{ISSION DECISION
Does the Commission wish to issue an Order confrrming the equipment identified in
Case No. GNR-T-20-14 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the ldaho Tax Commission?
UdrtemoslGNR-T- ?0- I 4 20 I 9 Tek- Hut Bmulband Tar Crcrlit
I
DECISION MEMORANDUM 1
Daniel Klein
SEPTEMBER 23,2O2O