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Utility Tax Stance Hitting Dozens Of NJ Towns In The Wallet

TRENTON, NJ (CBS) - Verizon is using state law in New Jersey to cut taxes it pays to municipalities on telephone infrastructure such as phone poles, wires and switching boxes.

At issue is something called the Business Personal Property Tax which, in Verizon's view, need not be paid once the utility no longer provides landline service to just over half of any town.

How they get to that point is a major issue in an ongoing tax court fight.

"Verizon solely determines when it is that it no longer provides the 51%," according to John Moran, a legislative analyst with the New Jersey League of Municipalities. "It's not the state Division of Taxation. It's not the municipality."

Verizon issued a statement, through a spokesman, to KYW Newsradio. It read, "The tax court agreed with Verizon's interpretation of the statute. Once a provider subject to the tax no longer provides greater than 51% of the local exchange service in a municipality the BPPT obligations cease. The case is now focused on how an entity, such as Verizon, establishes that it has fallen below the threshold."

The company declined further comment, citing ongoing litigation with Hopewell Borough in Mercer County, which has brought the action in state tax court.
So far more than 140 towns have seen Verizon curtail or cease paying the levy and that list is expected to grow. "The money that was provided by Verizon provided relief to the other property taxpayers and now towns are going to have to pick up that difference," Moran told KYW Newsradio.

He cites the case of Palmyra Borough in Burlington County, where Verizon cut its BPPT payment from almost 16 thousand dollars a year to under four dollars in 2013.
Moran also notes that efforts are now underway in the state legislature to reform the law that allows Verizon to make that determination solely on its own.

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