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Nutley Fighting Loss of Telephone Tax Revenue

In the wake of Roche Pharmaceuticals leaving, Nutley Commissioners vote to join a lawsuit with Hopewell Township and other state municipalities to stop loss of $200,000 in Verizon taxes.

Nutley Fighting Loss of Telephone Tax Revenue Nutley Fighting Loss of Telephone Tax Revenue

The Nutley Board of Commissioners voted this week to join a lawsuit with Hopewell Township and the New Jersey League of Municipalities to keep from losing $200,000 in taxes from Verizon.

Because the number of residents using land lines has dropped, the company has notified the township it no longer expects to pay taxes on its telephone pole and electrical lines, said Commissioner Thomas Evans, the director of the township’s Dept. of Revenue and Finance

"People are changing from dial tone landlines in their houses to cell phones, and when the percentage of homes dropped below 50 percent this year, Verizon notified us that there is no longer a personal, tangible tax attached," Evans said. "The phone company recognizes that technology is changing, and they don't want to pay, but the poles are still there."

So, the commissioners are joining Hopewell and the state League of Municipalities in suing to keep from losing the revenue, Evans said.

Verizon fell below 50 percent with its landlines in 61 municipalities at the end of 2011, and 48 were notified this year that the taxes will not be paid, he said.

This all stems from a state statute enacted nearly 30 years ago, Evans said, so Nutley's state representatives have been told about the change and asked to intervene. State Assemblyman Ralph Caputo said Wednesday he has been told about the problem and is working with his colleagues to draft a change. 

In the meantime, Nutley paid $220 to join the Hopewell lawsuit, which was denied in a lower court but is being appealed, Evans said.

Mayor Alphonse Petracco said this lost tax money hurts worse because of Roche leaving."This is the last thing we need right now," Petracco said. "This is not good news, but we are all working diligently to collect the same amount or better yet, a greater amount of tax revenue, from Roche and the entire town."

This possible Verizon tax revenue loss comes as Nutley officials respond to Roche Pharmaceuticals decision in June to leave and take more than $9 million in tax revenues.

Commissioner Steven Rogers said, "We are working with Hopewell and the state to address this, but the bottom line right now is that Verizon is not required to pay where the percentage drops below 50 percent." 

Evans said that technology has changed, so now the statute has to change and the lost revenue be found somewhere else.

"I have a land line myself, and I rarely use it," he said. "So that's why this requires an action on the state level, and an alternative tax that comes in to take the place of this one." 

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