New Law Could Make Verizon Pay a Decade's Worth of Taxes It Avoided

Verizon has avoided paying local taxes on telecom equipment in many New Jersey municipalities over the past decade, but a proposed state law would force the company to pay back taxes for all the payments it didn't make. Ars Technica reports: The bill, filed on May 23 by Assemblyman John Burzichelli (D. Paulsboro), 'would force Verizon to pay local taxes on telephone poles, lines, land, and other equipment that the telecom giant has refused to fork over in an increasing number of New Jersey municipalities, starving them of tens of millions of dollars a year in tax revenue,' The Philadelphia Inquirer reported. As of 2015, Verizon had reportedly stopped paying the tax in more than 150 of the 565 municipalities in New Jersey.

The tax Verizon has avoided ranges from $15,000 to more than $1 million a year for each municipality, taking revenue away from local budgets or forcing residents and other businesses to cover the shortfalls. Despite not paying tax in many cities and towns, local officials point out that Verizon 'continues to benefit from the use of municipalities' poles, utility lines, and switching facilities even when it no longer pays taxes,' a 2015 Inquirer article said. 'The tax dispute centers on a 1997 amendment to state tax law that required 'business personal property' payments from landline phone companies that provide 'dial tone and access to 51 percent of a local telephone exchange,'' the report adds. Verizon said in 2008 that it would stop paying the tax because it said its market share had dropped below the 51 percent threshold. In reality, Verizon's share was closer to 90 percent.

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