20210521Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:MAY 20,2021
RE:THE 2020 BROADBAND EQUIPMENTTAX CREDIT APPLICATION
FOR LXI-CLEC,LLC;CASE NO.LXI-T-21-01.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho.Idaho Code §63-3029B(3)(a)(ii).In particular,
Section 63-3029I allows 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 §63-329I(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."Idaho Code §63-3029I(3)(b)(i).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 Idaho Code §63-3029I(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 Idaho Tax Commission.
DECISION MEMORANDUM -1 -MAY 20,2021
THE APPLICATION
On March 26,2021,the Commission received an Application from LXI-CLEC,LLC
(collectively"LXI"or "Company"),seeking approval of the equipment for the broadband tax
credit installed during calendar year 2020.In the Application,LXI states that it "provides wired
dark and lit fiber and wired and wireless broadband internet to customers in Southern Idaho."
LXI discloses that its broadband network has data transmission rates between 1 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.LXI invested
approximately $6,089,327.47in 2020 in qualifyingbroadband 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 Idaho Code §63-3029I(3)(b).Staff,therefore,recommends that the Commission
issue an Order confirmingthe 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.LXI-T-21-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
Daniel Klein'
Udmemos/LXI-T-2l-012020 LXI-CLEC Broadband Tax Credit
DECISION MEMORANDUM -2 -MAY 20,2021