20100907_3071.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEG AL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 30, 2010
RE:GOLD STAR COMMUNICATIONS' 2009 BROADBAND EQUIPMENT TAX
CREDIT APPLICATION; CASE NO. GOL-I0-02.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code 9 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 963-3029I(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 9 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 9 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 July 14, 2010, the Commission received an Application from Gold Star Communications
LLC dba Silver Star PCS (Gold Star) seeking approval of equipment for the broadband tax credit. In
the Application, Gold Star states that it installed equipment associated with Evolution Data
DECISION MEMORANDUM - 1 -AUGUST 30, 2010
Only (Optimized) (EV -DO), a high speed 3-G broadband technology for wireless users, in
Caribou and Teton County. Gold Star asserts that 10% of its customers have access to this
service. The Application states that Gold Star invested approximately $161 000 in qualifying
broadband equipment during 2009.
ST AFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Gold Star and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No. 28784 and Idaho Code 963-3029I(3)(b). Staff also believes that the expenditures
identified by Gold Star, a commercial mobile service carrier, 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 ofthe
original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in Case
No. GOL- T -10-02 is qualified broadband equipment as defined in Idaho Code 9 63-
3029I(3)(b)(i), and forward it to the Idaho Tax Commission?
/h (L CUUCtt1
race Seaman
i:udmemos/gol-IO-O2.doc
DECISION MEMORANDUM - 2 -AUGUST 30 , 2010