The state legislature is moving legislation forward in the assembly that would aid Hopewell Borough in collecting business personal property taxes on local telephone companies.
In Hopewell Borough’s case, it would help collect business personal property taxes from Verizon Communications.
Assembly bill (A2991), which focuses on taxation of certain business personal property that includes poles, lines and equipment for local exchange telephone companies such as Verizon Communications, was given the green light from the Assembly State and Local Government Committee on Oct. 19.
The bill, which revises the definition of local exchange telephone company, will now head to Assembly Appropriations Committee for a hearing. A similar bill in the Senate (S421) has been introduced and referred to the Senate Community and Urban Affairs Committee but awaits further hearings.
“I’m an optimist, so my glass is always half full. I’m told at the Senate on the community level it is on their list and told by the Assembly that they are going to do it. I expect the Assembly bill to come out of the Appropriations Committee,” Hopewell Borough Mayor Paul Anzano said. “I am not delusional. Hopewell Borough and the New Jersey League of Municipalities are being opposed by Verizon and the business community (New Jersey Chamber of Commerce and New Jersey Business and Industry Association).”
Assembly bill (A2991) would help more than 120 municipalities statewide collect business personal property taxes from telecommunication carriers such as Verizon, CenturyLink and Warwick, regardless of the percentage of the market share threshold that it serves, according to bill documents.
The reason for the bills comes from a disagreement since 2008 between Verizon and Hopewell Borough over personal property taxes, when the company at that time informed five municipalities (one of which was Hopewell Borough) that it would appeal the applying of taxes out of the New Jersey Telecommunications Act of 1997 to their personal property located in those municipalities for the 2009 tax year.
The statute taxes carriers providing dial tone and access to 51% of lines within the local telephone exchange. Verizon had been relying on part of the act that allowed it to exempt itself from paying business personal property taxes on the cables and related equipment if it determined that it did not supply dial tone service to 51% or more of an area’s landline telephones.
Representatives of Verizon have previously stated that the company services less than the 51% in the case of Hopewell Borough and should not be subject to the local business tax.
They did appeal a 2019 New Jersey Tax Court decision that determined that Verizon serviced more than 51% of dial tone and access in the Hopewell Telephone Exchange and should be taxed for the 2009 year.
“We are now at the appellate level and it has been over a year and we still do not have a hearing date. Verizon has continually thrown out these bogus appeal motions. They are just trying to bleed us dry,” Anzano said. “We are in a holding pattern, but the bigger thing is there are 60 other municipalities who have the same litigation as us and the courts have told them we will wait until the Hopewell Borough case is resolved before you have your day in court.”
As the case was making its way through the legal system, Verizon did pay the tax.
“In order for Verizon to maintain its position as an appellate they need to be paying the taxes, so we received the money,” he added.
Hopewell Borough has been in more than 10 years of litigation with Verizon.
“I hope this issue gets resolved before I am no longer mayor,” Anzano said. “The community has been supportive and no one has expressed any issues to me about our legal bills or legal position.”