20200925Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KTBLLANDER
COMIIdISSIONBR RAPER
COMMISSIONER ANDERSON
COMNflSSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATB: SBPTEMBER 23,2020
RE:THB 2019 BROADBAND BQUIPMENT TAX CREDTT APPLTCATTON
FOR LXI-CLEC, LLC; CASE NO. LXI.T-2044.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
gualifying broadband infrastructure in ldaho. Idaln Code * 63-30298(3XaXii). In panicular,
Section $4A291allows a tar(payer to receive an investment tax credit for eligible broadband
equipment installed during a calendar year.
QualiFted 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 fi 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." ldalo Code E 63-3029(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 Code fi 63-3029(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 - l-SEPTEMBER23,2O2O
THE APPLICATION
On August 24,2020, the Commission received an Application from LXI-CLEC, LLC
(collectively "LXI" or "Company"), seeking apprcval of the equipment for the broadband tax
credit installed during calendar year 2019. In the Application, LXI states that it "provides wired
dark and lit fiber and wireless broadband intemet to customers in Southern ldaho." LXI
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 200,00{0 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 ldaho. LXI invested approximately
$362,403 in 2019 in qualifying broadband equipment that it confirms is integral to the broadband
network,
STAFF REVIEW AND RECOMMBNDATION
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. 287M and ldalw Code fi 63-3029(3)(b). Stafl 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 Talr Commission.
COMMISSION DBCISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. LXI-T-20-04 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemor/LXi-T_!0.04 20I9 LXI.CLEC Broarlbaad Tar Credit
DECISION MEMORANDUM 1-SEPTEMBER 23,2O2O