20151016Decision Memo.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING TILE
GRACE SEAMAN
ocToBER 16,2015
THE 2OI4 BROAITBAND EQUIPMENT TAX CREDIT APPLICATION
FOR VERIZON BUSINESS AKA VERIZON ENTERPRISE SOLUTIONS;
CASE NO. NYN.T.Is.OI.
BACKGROUNIT
In 2001, Flouse Bill377 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 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(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 $ 63-30291(3)(bxi). 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 $ 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 September 17, 2015, the Commission received an Application from Verizon Business
aka Verizon Enterprise Solutions ("Verizon" or "Company") seeking approval of equipment for
DECISION MEMORANDUM -l-ocroBER 16,2015
the broadband tax credit installed during calendar year2014. In the Application, Verizon states
that the equipment is associated with "lP finternet Protocol] services and network, as well as
managed WAN [Wide Area Network] and LAN [Local Area Network] services, in addition to
other networking services." Verizon affirms that its broadband network has data transmission
rates no lower than 155 Mbps for subscriber downloads and uploads, exceeding 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 100% of its Idaho subscribers have access to the broadband network.
During 2014, the Company invested approximately $751,000 in qualifying broadband
equipment.
STATF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Verizon
Business and believes the identified equipment qualifies for the investment tax credit pursuant to
Procedural Order No, 28784 and ldaho Code $ 63-30291(3)(b). 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 identifred in Case
No. NYN-T-15-01 is qualified broadband equipment as defined in Idaho Code $ 63-30291(3Xb),
and forward it to the ldaho Tax Commission?
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DECISION MEMORANDUM a ocToBER 16,2015