20160205Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:FEBRUARY 5,2016
RE:SYRINGA NETWORKS,LLC’S 2015 BROADBAND EQUIPMENT TAX
CREDIT APPLICATION;CASE NO.SZ9-T-16-0I.
BACKGROUND
In 200!,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho.Idaho Cot/c §63-30298(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 Cot/c §63-3029I(3)(b).If the equipment is installed by a
telecommunications carrier,it must also be “necessary to the provision of broadband sen’ices
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 §63-30291(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 January 25,2016,the Commission received an Application from Syringa Networks,
LLC (“Syringa”or “Company”)seeking approval of equipment for the broadband tax credit for
calendar year 2015.Syringa states it provides “wholesale broadband telecommunications service
DECESION MEMORANDUM -1 -FEBRUARY 5,2016
and other telecommunications services in southern Idaho.”The Company confirmed that its
entire broadband telecommunications network is capable of transmission speeds of 10 Gigabits
per second;significantly faster than the speed requirements set forth in Idaho Code
§63-30291(3)(b).With the Application.Syringa includes a list of investments associated with
the broadband network for calendar year 2015 and reports investments of approximately
$1,690,500.
STAFF 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 §63-30291(3)(b).Staff further 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 that the Commission issue an Order confirming the equipment is
qualified broadband equipment and forward the approving Order along with the 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.SZ9-T-l6-0l is qualified broadband equipment as defined in Idaho Code
§63-30291(3)(b)Q).and forward it to the Idaho Tax Commission?
L
Grace Seaman
Udmcmos/sz9.t.16-Ol dcc memo
DECISION MEMORANDUM -2-FEBRUARY 5,2016