20160902Decision Memo.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
GRACE SEAMAN
SEPTEMBER 2, 2016
THE 2015 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR VERIZON BUSINESS AKA VERIZON ENTERPRISE SOLUTIONS;
CASE NO. NYN-T-16~01.
BACKGROUND
In 2001, House Bill 3 77 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 63-30291 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 § 63-30291(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)(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§ 63-30291(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 Idaho Tax Commission.
THE APPLICATION
On August 5, 2016, the Commission received an Application from Verizon Business aka
Verizon Enterprise Solutions ("Verizon" or "Company") seeking approval of equipment for the
DECISION MEMORANDUM - 1 -SEPTEMBER 2, 2016
broadband tax credit installed during calendar year 2015. In the Application, Verizon states that
the equipment is associated with "IP [Internet 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 discloses 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 I 00% of its Idaho subscribers have access to the broadband network.
During 2015, the Company lists investments of approximately $258,000 in qualifying broadband
equipment that it confirms is integral to the broadband network.
STAFF 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 Idaho Code§ 63-3029I(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 identified in Case
No. NYN-T-16-01 is qualified broadband equipment as defined in Idaho Code§ 63-3029I(3)(b),
and forward it to the Idaho Tax Commission?
J,h lt. u L uu'Vltl..JA---
orace Seaman
Udmemos/nyn-t-16-0l dee memo
DECISION MEMORANDUM ·2· SEPTEMBER 2, 2016