20100115Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEG AL
WORKING FILE
FROM:GRACE SEAMAN
DATE:JANUARY 14,2010
RE:SYRINGA NETWORK, LLC 2009 BROADBAND EQUIPMENT TAX
CREDIT; CASE NO. SZ9-I0-01.
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 63-30291 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 ~ 63-3029I(3)(b). To be eligible for the broadband
equipment tax credit, the taxpayer must obtain from the Commission an Order confirming that
installed equipment qualifies for capital investment credit. Procedural Order No. 28784 and
Idaho Code ~ 63-30291(4).
THE APPLICATION
On January 7, 2010 , the Commission received an Application from Syringa Networks
LLC (Syringa) seeking approval of equipment for the broadband tax credit for 2009. Syringa
states it is a provider of wholesale broadband telecommunications services in southern Idaho. In
the Application, Syringa states that during calendar year 2009 its investments included fiber
optic facilities, digital switching equipment, SONET multiplexers, power equipment
engineering and other equipment associated with its broadband network. Syringa reports
DECISION MEMORANDUM - 1 -JANUARY 14 2010
investments of approximately $3 000 000 in qualifying broadband equipment for the 2009
calendar year.
ST AFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Syringa and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No. 28784 and Idaho Code ~ 63-3029I(3)(b). Further, Staff believes that the expenditures
identified by Syringa, a telecommunications provider, were for equipment that is "necessary for
the provision of broadband services and an integral part of a broadband network." Staff
therefore, recommends acceptance of the Application and further recommends that the
Commission forward the approving Order along with a copy of the original Application to the
Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to accept Syringa s Application for the broadband investment
tax credit?
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DECISION MEMORANDUM - 2 -JANUARY 14 2010