20200814Decision Memo.pdf

RE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER AIIDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: AUGUST 5,2020
POTLATCH TELEPHONE COMPANY DIBIA TDS TELECOM'S 2019
BROADBAND EQUIPMENT TAX CREDIT; CASE NO. POT-T-20-01.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualifuing broadband infrastructure in Idaho. Idaho Code $ 63-30298(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 $ 63-3291(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(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 $ 63-30291(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 AUGUST 5,2020
THE APPLICATION
On July 13,2020, the Commission received an Application from Potlatch Telephone
Company d/b/a TDS Telecom ("TDS" or "Company"), seeking approval of the equipment for
the broadband tax credit installed during calendar year 2019. In the Application, TDS states that
it installed broadband equipment associated with Digital Subscriber Line ("DSL) service. TDS
discloses that its broadband network has data transmission rates of 256 kbps to 25 Mbps
upstream and lMbps to 100 Mbps downstream. These rates exceed the minimum statutory
speed requirements pursuant to ldoho Code 63-30291. The Company estimates that96%o of its
Idaho customers have access to its broadband network within its designated service areas. TDS
invested approximately $570,73 5.46 in20l9 in qualifuing broadband 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 ldaho Code $ 63-30291(3Xb). 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 Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. POT-T-20-01 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3)(b) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/POT-T-20-01 2019 TDS Broadband Tax Credit
DECISION MEMORANDUM -2-AUGUST 5,2020