20190906Decision Memo.pdf

RE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: SEPTEMBER 4, 2019
THE 2OI7 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR INLAND CELLULAR, LLC.; CASE NO. INC-T-19-01.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying 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 broadband equipment is defined as "those nelrvork facilities capable of
transrnitting signals atatate 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." lduho Code $ 63-30291(3XbXi). To be eligible
for the iax credit, the taxpayer must obtain liom the Clomrnission an Order contirming 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.
DECISION MEMORANDUM SEPTEMBER 4, 20I9I
THE APPLICATION
On August 12,2019, the Commission received an Application from Inland Cellular,
LLC. ("Inland" or "Company"), seeking approval of the equipment for the broadband tax credit
installed during calendar year 2018. In the Application, Inland states that it installed equipment
associated with technologies to support LTE [Sonet Light Terminating Equipment] for 4G [4th
Generation Mobile System] voice and broadband data, in addition to cellular network
technologies. Inland discloses that its broadband network has data transmission rates between l0
Mbps and 3 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 that26.5Yo of Idaho subscribers are customers of its broadband network.
Inland invested approximately $783,113.66 in 2018 in qualifying broadband equipment that it
confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has 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(3Xb). 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 Commissiorr.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. INC-T-19-01 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3)(b) and forward it to the Idaho Tax Commission?
(
Daniel
Udmemos/lNC-T-19-01 2018 Inland Broadband Tax Credit
DECISION MEMORANDUM -2-SEPTEMBER 4, 20I9