Verizon Seeking New Jersey Tax Exemption
Due to a decrease in landline customers, Verizon is telling 68 municipalities in New Jersey that it’s no longer required to file tangible telephone property tax returns. Municipalities like Hopewell Borough in Mercer County disagreed, bringing the telco to state tax court.
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Based on New Jersey law (Title 54, section 4-1), in municipalities where Verizon no longer provides landline to 51 percent of a local exchange, the company isn’t required to file the property tax returns, a Verizon spokesman said. For tax year 2011, Verizon didn’t pay personal property tax in 37 municipalities that met the threshold, and identified 31 additional municipalities for 2012, he said. Verizon estimates savings of about $7.8 million for the 2012 tax year, he said. None of Verizon’s competitors in New Jersey are subject to the tax, he noted. Verizon is still submitting property tax returns for about 475 other municipalities across the state and continues to pay the personal property tax in the municipalities where the assessor has placed an assessment on the tax roll, he said.
Hopewell Borough has appealed Verizon’s decision in the Tax Court of New Jersey (case pending). The New Jersey League of Municipalities is also opposing Verizon’s position, said Executive Director Bill Dressel. The league maintains that the statute specifically provides that those telecom carriers formerly subject to the New Jersey Franchise and Gross Receipts Tax Act will continue to be taxed, and contains no provision for an annual “test” to determine whether the tax continues to apply, he said.
Consumers have more communications service options now, the Verizon spokesman said regarding declining landlines. New and evolving technologies enable various service providers, many of which aren’t traditional telephone companies, he said. Verizon is seeking tax exemption on a case-by-case basis, said a spokesman with the state Treasury Department. The agency doesn’t have any comments because it’s a tax collected at the local level, he said.