June 28, 2012
Re: DECISION RENDERED IN VERIZON V. HOPEWELL BUSINESS PERSONAL PROPERTY TAX CASE - MORE BAD NEWS FOR TAXPAYERS
On Tuesday, New Jersey Tax Court Judge Gail Menyuk released her long-awaited decision in the case of Verizon New Jersey, Inc. vs. Hopewell Borough. (You can access a copy of the Judge’s written opinion at http://www.njslom.org/documents/verizon-v-hopewell.pdf .) The Court found, for the most part, in favor of Verizon. As a result, local residential property taxpayers can lose a source of some significant relief.
The case, in which the League supported Hopewell as an amicus curiae, involved Verizon’s interpretation of 1997 amendments to the law dealing with the Business Personal Property Tax (BPPT). Pursuant to that interpretation, Verizon claimed an exemption from the BPPT in any municipality where the corporation unilaterally determines that it no longer supplies dial tone and access to at least 51% of the local telephone exchanges.
Verizon’s claim had been rejected by the Mercer County Board of Taxation in 2009. In this appeal, which followed the Board of Taxation’s determination, Verizon also challenged the constitutionality of the BPPT.
The Judge Menyuk’s ruling supports Verizon on its interpretation of the statute, but upheld the constitutionality of the law, as interpreted. In other words, the Judge agrees that Verizon is exempt from payment of the BPPT in any municipality where Verizon determines that it no longer supplies dial tone to 51% of the phone lines. Verizon must, however, continue to remit Business Personal Property Taxes to municipalities where it serves at least 51% of the lines, as measured annually.
Verizon has already claimed exemptions under the “51% rule” in over 65 municipalities, with more to come.
The personal property that has been subject to the BPPT is, as the Court observed, “… generally present in all municipalities throughout New Jersey and consists of the various types of property used to provide telephone service, such as poles, aerial cables, underground cable, buried cable, intrabuilding cable and conduit systems.” It would also include switching stations and the cables and equipment owned by Verizon, therein.
At this point, both Hopewell Borough and the League are weighing the options. Judge Menyuk’s decision could be appealed, or, because of the State-wide impact of this ruling, the Legislature and Administration could advance a remedy.
We will keep you posted. In the meantime, if you have any questions, contact Jon Moran at
609-695-3481, ext. 121 or email@example.com
Very truly yours,
Art Ondish Brian Wahler William G. Dressel, Jr.
Mayor, Mount Arlington Mayor Piscataway Executive Director
League President Member, NJLM Exec. Board
Chair, NJLM Telecommunications