A bill making its way through the New Jersey state legislature is set to help municipalities such as Hopewell Borough collect personal property taxes on local telephone companies.
Assemblyman John Burizichelli (D- Cumberland, Gloucester, Salem) is the primary sponsor of assembly bill A5450, which focuses on taxation of certain business personal property that includes poles and lines for local exchange telephone companies such as Verizon Communications.
The reason for the bill comes from a dispute between Verizon and Hopewell Borough over personal property taxes with Verizon since 2009. Hopewell Borough is looking to retroactively recoup the taxes from Verizon that would amount to $40,000 a year since 2009 if the bill is passed along.
“Senator Shirley Turner (D- Hunterdon,Mercer) and Assemblyman Burizichelli offered to help us right the ship and balance the ledger. In a 10-year litigation with Verizon we have spent $200,000 in legal fees,” Hopewell Borough Mayor Paul Anzano said. “The borough is tiny we do not have that kind of money laying around. The court decision earlier this year was only for one tax year for 2009.”
He said the borough was the first township Verizon decided not to pay the taxes to.
“We were the smallest town in that group. I believe now that they thought we would not contest it,” Anzano said. “We did contest it after 10 years of litigation we were ultimately vindicated. Now that the litigation is not done Verizon appealed the courts decision earlier this year.”
He said with the borough trying to settle things with Verizon, officials were told that if the borough wrote Verizon a check, it’s how things would be settled.
“We are not going down that road,” Anzano said. “We will litigate this. I am happy and satisfied the Verizon business model was shown to deliberately not want to pay the tax.”
The litigation decision Anzano referred to was a decision by the New Jersey Tax Court, that determined earlier this year that Verizon serviced more than 51% of dial tone and access in the Hopewell Telephone Exchange and should be taxed for the 2009 year.
Representatives of Verizon said that the company services less than the 51% of the borough and should not be subject to the local business tax. Representatives for Verizon are appealing the court decision.
This summer the assembly bill passed through the Assembly Appropriations Committee, which is chaired by Assemblyman Burizichelli.
The senate bill has been introduced and referred to the Senate Community and Urban Affairs Committee.
Anzano said he hopes to get the legislation done by the end of the year.
“I am very confident the state legislature will see this as a state-wide problem and want to fix it,” he said.