Haledon may join challenge to phone company's tax-exemption claim
February 8, 2011
By Justin Zaremba
HALEDON — Mayor Domenick Stampone said the borough is considering its options after Verizon — a prominent provider of telephone and wireless services — stopped paying taxes on property within the municipality.
Stampone said the borough received notice of Verizon's intent to cease payment for 2010 taxes for a property on Burhans Avenue.
"It affects us in a negative way, and really at the worst time possible," Stampone said.
In light of state-imposed spending limits, municipalities throughout New Jersey are struggling to rein in their budgets. Stampone said Verizon's estimated property tax — about $20,000 — had a major impact on the borough because of its small size.
Verizon stopped paying its local business personal property tax in municipalities throughout New Jersey based on its interpretation of a state statute developed nearly a century ago.
In its interpretation of the statute, Verizon claims that payment of the tax is not required if it determines that it no longer supplies dial tone and access to at least 51 percent of the local telephone exchanges in a municipality.
While the use of landline telephones has declined steadily in the last decade, Verizon remains one of the largest suppliers of telephone and wireless services in the state.
Currently, Hopewell Borough in Mercer County, the New Jersey League of Municipalities and the state are joined in litigation over Verizon's decision to discontinue payment of its local business personal property taxes. Stampone said the local government is considering joining the litigation, pending an upcoming decision in state Tax Court.
The mayor disputed Verizon's interpretation of the statute, claiming the law was passed during the nascence of telephone service and was designed as an incentive for phone companies to expand their service. He said the borough would treat [Verizon] as a delinquent account and consider penalties including a possible lien on its property — "We're not going to tolerate it," Stampone said.
He added that the borough also would continue to pursue legislative efforts to amend the statute.