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HomeMy WebLinkAbout20160906_5058.pdfDECISION MEMORANDUM TO:COMMISSIONER KJELLANDER COMMISSIONER RAPER COMMISSIONER ANDERSON COMMISSION SECRETARY LEGAL WORKING FILE FROM:GRACE SEAMAN DATE:SEPTEMBER 2,2016 RE:THE 2015 BROADBAND EQUIPMENT TAX CREDIT APPLICATION FOR VERIZON BUSINESS AKA VERIZON ENTERPRISE SOLUTIONS; CASE NO.NYN-T-I6-01. 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. THE APPLICATION On August 5,2016,the Commission received an Application from Verizon Business aka Verizon Enterprise Solutions (“Verizon”or “Company”)seeking approval of equipment for the DECISION MEMORANDUM -1 -SEPTEMBER 2,2016 broadband tax credit installed during calendar year 2015.In the Application,Verizon states that the equipment is associated with “IP [Internet Protocol]services and network,as well as managed WAN [Wide Area Network]and LAN [Local Area Network]services,in addition to other networking services.”Verizon discloses that its broadband network has data transmission rates no lower than 155 Mbps for subscriber downloads and uploads,exceeding the required rates of 200,000 bits per second to a subscriber and 125,000 bits per second from a subscriber. The Company asserts that 100%of its Idaho subscribers have access to the broadband network. During 2015,the Company lists investments of approximately $258,000 in qualifying broadband equipment that it confirms is integral to the broadband network. STAFF REVIEW AND RECOMMENDATION Staff has reviewed the list of proposed broadband equipment submitted by Verizon Business 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,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.NYN-T-16-01 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b), and forward it to the Idaho Tax Commission? &t Grace Seaman Udmemos/nyn-t-16-Ol dcc memo DECISION MEMORANDUM -2 -SEPTEMBER 2,2016