20170317Decision Memo.pdf

TO
FROM:
DATE:
DECISION MEMORANDTJM
COMMISSIONER KIELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORI(NG FILE
GRACE SEAMAN
MARCH t5,20t7
R"E:GOLD STAR COMMUNICATIONS, LLC'S APPLICATION FOR THE
BROADBAND EQUTPMENT TAX CREDTT FOR YEARS 2013 AND 2AM;
cAsE NO. GOL-T-16-01
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
quali$ing broadband infrastructure in ldaho. Idaho Code g 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 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 $ 63-30291(3Xb). 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 tarc credit, the taxpayer must obtain from the Commission an Order confirming that the
installed equipment meets the statutory definition of quatified broadband equipment. Procedural
Order No. 28784 and ldaho 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.
THE APPLICATION
On Desember 19, 2016, the Commission received an Application from Gold Star
Communications, LLC ("Gold Star" or "Company'') seeking approval of equipment for ttre
IDECISION MEMORANDUM MARCH t5,20t7
broadband ta:< credit for calendar years 2013 and 2014. An Amendment to the Application was
filed on February 28,2017. In the Application, Gold Star states it installed broadband equipment
associated with Evolution Data Only/Long-Term Evolution (EvDO&TE) technology with
transmission rates of I .2 to I 3.8 Mbps upstream and 3 84 Kbps to 2 I .6 Mbps downstream. These
rates exceed the minimum statutory speed requirements pursuant to ldaho Code 63-3029I. In the
Amendment to the Application, the Company "estimates that more than 50% of its customer
have access to its broadband network within its designated service areas." During 2013 and
2At4, the Company invested approximately $32,000 and $32,450, respectively in qualiffing
broadband equipment. Gold Star further states that '1he listed equipment shown on the exhibits
to the Application(s) constitute an integral part of the relevant broadband network, necessary to
provide broadband serves..." See Amendment to the Application.
STAFT' REVIEW AND RECOMMENDATION
Staffhas reviewed the list of proposed broadband equipment submitted by Gold Star and
believes the identified equipment qualifies for the investnent tax credit pursuant to Procedural
Order No. 28784 and, Idaho Code $ 63-30291(3)(b). Staffalso believes that the expenditures
identified by the Company, a commercial mobile service provider, is "necessary for the
provision of broadband services and an integral part of a broadband network." 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. GOL-T-16-01 is qualified broadband equipment as defined in ldaho Code g 63-3029(3Xb),
and fonrard it to the ldaho Tax Commission?
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Crace Seaman
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DECISION MEMORANDUM .,MARCH 15,2017