November 26, 2012
RE: League Files Supreme Court Amicus Brief on Verizon v. Hopewell
On the League’s behalf, Joel Shain, Esq. of Shain, Schaffer and Rafanello has advised us that the firm has filed the Amicus Curiae in support of Hopewell Borough’s motion in Verizon v. Hopewell. You can access the brief on our website at http://www.njslom.org/letters/Verizon-v-Hopewell.pdf. We have requested that the Supreme Court hear the case which, if left unresolved, has the potential for a significant negative financial impact for our members and leave in limbo a source of revenue critical to the municipal budget process.
The Appellate Division denied Hopewell’s motion for leave to appeal a decision of the New Jersey Tax Court which permits Plaintiff Verizon New Jersey, Inc. ("Verizon") to discontinue payment of business personal property taxes if it can prove that it no longer provides dial tone and access to 51% of a local telephone exchange. This means the issue will be first adjudicated by the Tax Court. (See our October 2 letter for more details on this at http://www.njslom.org/letters/2012-1002-verizon-v-hopewell.html>)
At issue is the appropriate interpretation of statutory language N.J.S.A. 54:4-1, which provides for the taxation of certain business personal property. The Statute, both a remedial and revenue-producing measure, was designed to address a monopoly by certain telecommunications carriers and impose a tax on those carriers’ infrastructure.
If appellate review of this issue must await a tax court trial, the affected municipalities will not only face potentially unnecessary litigation costs but also be forced to deal with an unknown and unforeseeable reduction in revenue, which will hamstring its budgets for the ensuing tax years.
As you know, three full years passed between the time this tax appeal was filed and a decision on statutory interpretation reached by the Tax Court. The trial itself, without any regulatory parameters indicating how to break out a “local telephone exchange” from a municipality, or to what the 51% figure refers - whether number of customers, number of lines, volume of calls, revenue, etc. – will likely be protracted.
In the meantime, we continue to support S-2324/A-3393, which will provide better direction to the courts regarding the legislature’s intent to protect residential property taxpayers, when laws regarding State taxation of telecommunications providers were reformed in 1997.
You can access more information on the bills and a sample resolution supporting their passage at http://www.njslom.org/letters/2012-1025-A3393.html. If you have any questions, contact jon Moran at 609-695-3481, ext. 121 or email@example.com.
Very truly yours,
William G. Dressel, Jr.