20190315Decision Memo.pdf

RE
DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: MARCH 12,2019
THE 2018 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR SYRINGA NETWORKS, LLC'S; CASE NO. SZ9-T-19-01.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code $ 63-30298(3)(a)(ii). 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
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;' Idalto 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." Idaha 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 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.
DECISION MEMORANDUM MARCH 12,2OI91
THE APPLICATION
On January 29,2019, the Commission received an Application from Syringa Networks,
LLC. ("Syringa" or "Company"), seeking approval of the equipment for the broadband tax credit
installed during calendar year 2018. In the Application, Syringa lists investments 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 discloses 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 63-30291. Syringa invested approximately
92,474,806 during 2018 in qualifying 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 $ 63-3029I(3Xb). 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-19-01 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the Idaho Tax Commission?
Udmemos/SZ9-T-19-01 2018 Syringa Broadband Tax Credit
DECISION MEMORANDUM 1
Daniel Klein
MARCH 12,2OI9