20150831_4754.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 27,2015
RE:POTLATCH TELEPHONE COMPANY DBA TDS TELECOM’S
2014 BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
CASE NO.POT-T-15-01.
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 §63-30291(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 §63-30291(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.
DECISION MEMORANDUM -1-AUGUST 25,2015
THE APPLICATION
On August 24,2015,the Commission received an Application from Potlatch Telephone
Company dba TDS Telecom (“TDS”or “Company”)seeking approval of equipment for the
broadband tax credit.In the Application,TDS states that it installed equipment associated with
Digital Subscriber Line (“DSL”)services with transmission rates of up to 25 Megabits per
second in the Juliaetta,Kendrick,and Potlatch exchanges.TDS asserts that approximately 94%
of its customers in its Idaho serving area can access the broadband network.The Company lists
2014 investments of approximately $852,000 in qualifying broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by TDS 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 also believes that the expenditures
identified by the Company,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.POT-T-15-01 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
/A
Grace Seaman
Udmenws!poi-t-I 5-UI dcc menu,
DECISION MEMORANDUM -2-AUGUST 25,2015