20200225Final_Order_No_34563.pdf

Office of the Secretary
Service Date
February 25,2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF LXI-CLEC,LLC's )CASE NO.LXI-T-20-03
APPLICATION FOR A 2018 INVESTMENT )
TAX CREDIT FOR INSTALLING )QUALIFYING BROADBAND EQUIPMENT )ORDER NO.34563
On January 28,2020,LXI-CLEC,LLC ("Company")applied to the Idaho Public
Utilities Commission ("Commission")for an order confirmingthat equipment it installed in 2018
is "qualified broadband equipment"under Idaho Code §63-3029I (Income tax credit for
investment in broadband equipment).With this Order,we confirm that the installed equipment is
"qualified broadband equipment"under Idaho Code §63-3029I.
THE APPLICATION
In its Application,the Company states that in 2018 its net investment in qualifying
broadband equipment was $372,625.44.See Attached 2018 Broadband Equipment List.The
Company states that it made certain investments that constitute "qualified broadband equipment".
Application at 1.The Company states that transmission rates of 1Mbps to 50Mbps meet the
required rates of 200,000 bits per second to a subscriber and 125,000 bits per second from a
subscriber.Id.The Company also states that it,through related entities,Tek-Hut,Inc.and
Tekfinity,LLC,provides service to approximately 2,500 customers in Idaho.Id.Finally,the
Company certifies that the equipment it lists in its Application "qualifies for the [broadband]tax
credit under [1]daho [C]ode [§]63-3029I."
THE BROADBAND EQUIPMENTTAX CREDIT
Idaho Code §63-3029I allows a taxpayer to receive an income tax credit for having
installed qualified broadbandequipment during a calendar year.Before the taxpayer is eligible for
the tax credit,the taxpayer must first apply to the Commission for an order confirmingthat the
installed equipment is "qualified broadband equipment"as defined in the statute.Idaho Code §
63-3029I(4).The statute defines "qualifiedbroadbandequipment"as equipment that:(1)qualifies
for the Idaho Code §63-3029B capital investment credit that "is capable of transmitting signals at
a rate of at least [200,000 bps]to a subscriber and at least [125,000 bps]from a subscriber"(Idaho
Code §63-3029I(3)(b));and (2)is "primarily used to provide services in Idaho to Idaho public
subscribers."See Idaho Code §63-3029I(3)(b)(vii).Further,in "the case of a telecommunications
ORDER NO.34563 1
carrier,such qualifyingequipment shall be necessary to the provision of broadband service and an
integral part of a broadband network."Idaho Code §63-3029I(3)(b)(i).
In furtherance of its statutory responsibility,the Commission has issued Order No.
28784.1 That order specifies the information the taxpayer must include in the broadband tax credit
application.When the taxpayer files the application,the Commission Staff reviews it to determine
whether the listed equipment meets the statutory definition of "qualified broadband equipment."
Staff then submits a recommendation to the Commission.If the Commission ultimatelyapproves
the application,then the Commission forwards it and the order to the Idaho State Tax Commission.
STAFF REVIEW
Staff reviewed the Company's Application under Idaho Code §63-3029I.Based on its
review,Staff believes that the Company is a telecommunications carrier and that the listed
equipment meets the statutory criteria and is "qualified broadband equipment"that is eligible for
the tax credit.Staff thus recommended the Commission:(1)issue an order confirming that the
Company's equipment is "qualified broadband equipment,"and (2)forward copies of the
Application and order to the Idaho State Tax Commission.
COMMISSION FINDINGS
Having reviewed the Company's Application and Staff's recommendation,we find that
the Company's equipmentidentified in CaseNo.LXI-T-20-03 is "qualified broadband equipment"
eligible for the tax credit under Idaho Code §63-3029I.The Company is a telecommunications
carrier.Further,the listed equipment (as presently configured)is an integral part of the Company's
broadband network and is necessary to the provision of broadband service to Idaho customers.
Accordingly,it is appropriate for the Commission to issue an order confirmingthat the Company's
equipment is "qualified broadbandequipment."The Commission makes no findings regarding the
costs of the installed broadbandequipment or other expenses.
ORDER
IT IS HEREBY ORDERED that the Company's Application for an order confirming
that equipment it installed in 2018 is "qualified broadbandequipment"is granted.
IT IS FURTHER ORDERED that a copy of this order and a copy of the Application
be served on the Idaho State Tax Commission.
The Commission issued Order No.28784 pursuant to Idaho Code §63-3029I(4),which empowers the Commission
to "issue procedural orders necessary to implement"the statute.
ORDER NO.34563 2
THIS IS A FINAL ORDER.Any person interested in this order (or in issues finally
decided by this order)may petition for reconsiderationwithin twenty-one (21)days of the service
date of this orderregarding any matter decided in this order.Within seven (7)days after any person
has petitioned for reconsideration,any other person may cross-petition for reconsideration.See
Idaho Code §§61-626 and 62-619.
DONE by order of the Idaho Public Utilities Commission at Boise,Idaho this
day of February 2020.
PÁÚL KJELL R,PRESIDENT
KRIS INE RAPE MMISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
L\Legal\TELEPHONE\LXET-20-03.docx
ORDER NO.34563 3