New Jersey isn’t just about raising taxes and finding new taxes and fees to feed its uncontrolled appetite for revenue. The government in this state is also concerned with retaining all existing taxes, even if they were once scheduled to expire.
In 1997, state law stipulated that if a telecommunications company ceases to provide fixed-line telephone service to more than 51% of a community, it no longer has to pay taxes on its towers and wires.
Since 1993, this trade tax has only been levied on telecommunications and petroleum refining companies. Because the state’s telecommunications infrastructure was developed by Bell Telephone and acquired by its successor, Verizon, it is the only company that charges New Jersey cities for landline towers and wires.
For 25 years, Verizon has alerted municipalities when more than half of their residents are no longer using landline phone service. Now that almost everyone has cell phone service, many have ditched the old wired home phone that they no longer need.
A few years ago, Hopewell Township sued Verizon in a tax court to keep it paying the pole tax, arguing that the 1997 tax exemption should only be available in cities that then met the 51 percent standard. This is absurd, since the mobile phone age had barely begun back then. And a finance court had already determined in 2012 that the 51% test is to be applied annually.
Sen. Holly Schepisi, R-Bergen, alleges that the courts are misinterpreting the 1997 law that the legislature only intended to grant a one-off pole tax exemption in almost no municipalities.
Schepisi has introduced a bill that would eliminate tax breaks entirely, allowing New Jersey communities to continue receiving their tax revenue from Verizon. She envisioned that cities receiving the revenue would use it to reduce their property tax burden.
Her bill would also extend the tax to cell phone company property, including “small cell hubs, which are low-power radio access nodes generally consisting of small radios and antennas two or three feet long placed on existing and new utility poles, Streetlights, signs and signal light poles aiming to increase wireless network service capacity.”
Sen. Shirley Turner, D-Mercer, has proposed a company-specific pole-and-wire tax for Verizon because it is the only phone company to hold a regional monopoly prior to the passage of the Federal Telecommunications Act of 1996. We hope this is not the case. t Beginning of the collection of individualized trade taxes.
Turner said her proposed tax on Verizon would “help lower property taxes, which are so onerous here in New Jersey.” Only shameless, serious-faced politicians can say that. Without a reduction in property taxes, much more revenue flowed into municipalities and schools.
Hopewell received $50,000 annually in taxes from Verizon, a tiny fraction of the district’s $4 million annual revenue. The city of Emerson, which prompted Schepisi to introduce her law, received only $23,000 in stake taxes, barely a rounding error on its $14.5 million revenue. No wonder Schepisi wants to extend the tax to other telecom companies.
Residents and businesses won’t get lower property taxes if these laws are passed, but they would have to pay more for their phones, cell phones, the Internet, and other telecommunications services to meet the increased costs of their providers.
The hunger for tax revenue must be great for such revenue crumbs to become important.
New Jersey leaders, ever more desperate for money, seem to have a new maxim:
“Make new taxes and keep the old ones, one is silver, the other is gold.”