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Budgeting

Posted on: October 16, 2020

Property Tax Relief Bill Hearing on Monday

On Monday, the Assembly State and Local Government Committee will hear A-2991. This legislation will clarify the telecommunications industry's corporate tax responsibilities, and shield local taxpayers from the costs of endless tax court litigation.

 Please contact your representatives in the General Assembly in support of this bill. If you are represented by a member of that committee, please reach out to them right away. Those members are:

Based on a misreading of a 1997 law, one telecommunications service provider 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, 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.

In 2018, 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-2991 will put an end to the travail. It 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.

We thank Assemblymen Burzichelli, Mazzeo, Armato and Thomson for their leadership on this clarification. Please urge your Assembly Members to join them.

Contact: Jon Moran, Senior Legislative Analyst, jmoran@njlm.org, 609-695-3481 x121.

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