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September 10, 2014

RE:  Please Ask Your Legislators to Support A-366/S-1713
(Verizon v. Hopewell - Status Update)

Dear Mayor:

New Jersey municipalities need to stand together and support A-366/S-1713, companion bills that have been introduced by Assemblyman Ralph Caputo and Senator Bob Smith to protect taxpayers, and to provide clear direction to the courts regarding the legislature’s intent when the laws regarding State taxation of telecommunications providers were reformed in 1997.

Beginning in 2008, Verizon claimed itself exempt from the payment of Business Personal Property Taxes in 5 municipalities, based on its own interpretation of the 1997 law, when it unilaterally determined that it no longer provided dial tone access to at least 51% of the local telephone exchanges. Hopewell Borough (one of the 5) challenged Verizon’s claim to the Mercer County Board of Taxation and prevailed. Verizon appealed that decision to the Tax Court. While the Tax Court deliberated, 104 additional municipalities were denied Verizon BPPT.

In 2012, the Tax Court issued a preliminary decision, supporting Verizon’s interpretation of the law. Hopewell Borough, joined by the League as Amicus Curiae, asked the Appellate Division to review the Tax Court’s ruling. Hopewell and the League oppose the interpretation that Verizon can unilaterally determine whether it is subject to the tax in a given locality.  We maintain that the statute specifically provides that those telecommunications carriers formerly subject to the New Jersey Franchise and Gross Receipts Tax Act would continue to be taxed, and that the law contains no provision for an annual “test” to determine whether the tax continues to apply. The highly respected non-partisan Office of Legislative Services agrees with us on that.  

Both the Appellate Division and the State Supreme Court denied our request to consider this issue, opting instead to await the Tax Court’s final decision on the level of Verizon’s current service in Hopewell. As the Tax Court proceedings drag on, with no end in sight, the taxpayers in over 100 municipalities have been, effectively, denied the opportunity for relief.

Sometime soon (It happens every year around this time.), more municipalities will receive a letter from Verizon informing them the corporation has unilaterally determined that it is no longer subject to local personal property taxation. If you are among those receiving such notice, please let us know.

Action by the Legislature now on A-366 and S-1713 would end the loss of the vital property tax relief revenues and restore relief in the municipalities that have suffered such losses, to date.

Please contact your Legislators and urge them to support A-366 and S-1713. The bills, respectively, await action in the Assembly Telecommunications and Utilities Committee and in the Senate Community and Urban Affairs Committee.

If you have any questions, please contact Jon Moran at 609-695-3481, ext. 121 or

Very truly yours,

Hon. Brian Wahler
Mayor, Piscataway Township
3rd Vice President, NJLM
Chairman, League Telecommunications Committee
William G. Dressel, Jr.
Executive Director



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