20180330Decision Memo.pdf

RE:
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMTSSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING F'ILE
FROM: DANIEL KLEIN
DATE: MARCH 29,2018
SYRINGA NETWORKS, LLC'S APPLTCATION FOR THE BROADBAND
EQUIPMENT TAx CREDIT FOR 2017; CASE NO. SZ9-T-18-0I.
BACKGROI.,IND
In 2001, House B1ll377 was enacted authorizing income tax credit for the installation of
quali$ing 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
transrnitting 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;' ldaho Code $ 63-329I(3Xb). lf 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 $ 63-3029I(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 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,
DECISTON MEMORANDUM MARCH 29,2478-l-
THE APPLICATION
On Januaty 25,2018, the Commission received an Application from SyringaNetworks,
LLC. ("Syringa" or "Company"), seeking approval of the equipment for the broadband tax credit
installed during calendar year 2077. In the Application, Syringa lists investnents associated
with its fiber optic facilities, equipment, and engineering connected with the broadband network.
Syringa states "the list of installed equipment is necessary to the provision of broadband service
and is an integral part of the broadband networks." Syringa disclo$es that its broadband network
has data transmission rates at a minimum rate of 1.5 Mbps for both upstream and downstream
transmissions with transmission speeds up to 100-Gig per second. This rate is above the
statutory speed requirements pursuant to ldaho Code $-iA29l. Syringa invested approximately
$4,325,830 in2017 in qualiffing broadband equipment that it confirrns is integral to the
broadband network.
STAFF REYIEW AND RECOMMET{DATION
Staff has reviewed and audited the list of proposed broadband equipment and believes the
identified equipment qualifies for the investment tax credit pusuant to Procedural Order No.
28784 and ldaho Code $ 63-3029I(3)@). 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. SZ9-T-18-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and forward it to the ldaho Tax Commission?
r
Daniel Klein
Udmemos/SZ9-'I-18-01 2017 Syinga Broadband Tax Credit
DECISION MEMORANDUM -2-MARCH ?9,2018
4 ?4