The League recently released the Business Personal Property Tax (BPPT) survey. BPPT is a tax collected by municipalities from telecommunications companies. Based on a State statute, when a telecommunications company provides 51% or more of a local telephone exchange to a company that is operating machinery, apparatus, or equipment used to refine petroleum, the company is subject to pay the municipality in which it is operating a tax. Based upon their records, which are not publicly available, a company can claim they are no longer providing 51% or more local telephone exchange.
While telephone exchanges operating 51% or greater within a municipality are required to pay BPPT to the municipality, the definition of how these calculations should be made has been challenged and has resulted in expensive court fees for Hopewell Borough as seen in the Verizon v. Hopewell case.
Absent legislation to clarify this tax, every municipality faces the prospect of costly annual tax court filings, similar to Hopewell. Currently, there are a minimum of 127 other municipalities in the position of Hopewell Borough, and well over 60 pending trials. While the New Jersey Supreme Court affirmed an Appellate Division decision and Hopewell was successful, municipalities still must settle individually for each tax year.
Legislation is needed to clarify this tax. Please complete the League’s BPPT Survey Questionnaire by October 31 to help the League with proposed legislative language. More information about the BPPT can be found in the League’s news flashes.
Contact: Erin Knoedler, Legislative Analyst EKnoedler@njlm.org, 609-695-3481, x116.