20200925Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LTGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: SEPTEMBER23,2A20
RE:THE 2OI9 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR TEK-RF, LLC; CASE NO. GNR-T-20-15.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
quali$ing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-30291allows a taxpayer to receive an investment tax credit for eligible broadband
equipment installed during a calendar year.
Qualified broadbarrd equipment is defined as "those nelwork 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 subscribe r;' lclqho 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{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 ldako 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 ldaho Tax Commission.
DECISION MEMORANDUM SEPTEMBER 23, 2O2O
THE APPLICATTON
On August 24,2020, the Commission received an Application from TEK-RF, LLC.
(collectively "TEK-RF" or "Comp&fly"), seeking approval of the equipment for the broadband
tax credit installed during calendar year 2019. In the Application, TEK-RF states that it
"provides support services for related entities, Tekfinity, LLC and Tek-Hut, Inc." via "2-way
radio and related services." TEK-RF 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. TEK-RF invested approximately $3,389 in 2019 in qualifoing 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 ldaho Code $ 63-30291(3)(b). 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.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. GNR-T-2O-15 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/CNR-T-20- I 5 dec nremo
DECISION MEMORANDUM SEPTEMBER 23,2020