Recently introduced legislation will clarify telecommunications industry corporate tax responsibilities, and shield local taxpayers from the costs of endless tax court litigation. The League fully supports the companion bills, A-5450/S-3827, and we thank the sponsors.
Based on a misreading of a 1997 law, Verizon decided that it could exempt itself from the payment of business personal property taxes (BPPT), in any year and in any municipality, when and where it, unilaterally and without documentation, determined that it provided less than 51% of dial tone service.
The dispute began in 2008, when Verizon informed a handful of municipalities that it had decided to exempt itself from payment of taxes on all of the cables and electronic equipment it houses in local switching stations. In the years that followed, similar decisions by Verizon have led to cases affecting taxpayers in hundreds of other New Jersey municipalities.
Earlier this year, Hopewell Borough in Mercer County prevailed over Verizon in a Tax Court case involving the corporation’s claimed exemption for 2008. It took one municipality ten years to ensure that Verizon would pay its 2008 taxes. Further litigation will be needed for Hopewell to secure BPPT payments for each subsequent year in which the exemption was claimed. Every other municipality faces the same prospect of costly annual tax court filings, which, as we have seen, can drag on for over a decade. But even that might not end the problem, as Verizon has appealed the final Tax Court decision, forcing Hopewell Borough to put even more time and treasure into the fight.
A-5450/S-3827 would put an end to the travail. They will clarify the Legislature’s intent to permanently apply the business personal property tax on local exchange telephone companies that were subject to the tax as of April 1, 1997.
A-5450, sponsored by Assemblymen Burzichelli, Schaer and Karabinchak, has been referred to the Assembly State and Local Government Committee. S-3827, sponsored by Senator Turner, awaits referral in the Senate.
Please contact the Members of the Assembly State and Local Government Committee and your State representatives, and urge them to advance A-5450, as soon as possible.
Assembly State and Local Government Committee
|Hon. Mazzeo, Vincent – Chair
Assemblyman, District 2
2312 New Road
Northfield, NJ 08225
Hon. Sumter, Shavonda E. – Vice-Chair
Assemblywoman, District 35
191 Market Street
Paterson, NJ 07505
Assemblyman, District 25
146 Speedwell Avenue
Morris Plains, NJ 07950
Hon. McKnight, Angela V.
Assemblywoman, District 31
2324 John F. Kennedy Blvd.
Jersey City, NJ 07304
Hon. Peters, Ryan E.
Assemblyman, District 8
668 Main Street
Lumberton, NJ 08048
Assemblywoman, District 15
144 West State Street
Trenton, NJ 08608
- Jon Moran, Senior Legislative Analyst, firstname.lastname@example.org, 609-695-3481 x121.
- Frank Marshall, Esq., League Staff Attorney, email@example.com, 609-695-3481 x 137.