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Phone pole ruling may be tax windfall

Email|Print|Single Page| Text size + By John Laidler
Globe Correspondent / April 24, 2008

Local officials are voicing cautious satisfaction with a recent ruling by the state Appellate Tax Board that the poles and wires that Verizon owns over public ways can be taxed by cities and towns.

The March 3 decision, which applies to other cable and telephone companies as well, opens the way for municipalities to generate millions in new revenue. Until now, telecommunications firms could be taxed only for poles and wires above private property and for underground wires.

Assessors and other city and town officials say they welcome the prospect of the new tax revenues. But, with Verizon expected to appeal the ruling, they caution that it is premature to say when or even if it might benefit them.

"I think it's good news for every community - if it holds up. There is the big 'if' there," said Amesbury chief assessor Mary Marino.

Verizon spokesman Phil Santoro said last week the company has not yet filed an appeal, but plans to do so.

In a statement, the company said, "We're hopeful that the Legislature continues to focus on tax policy that encourages investment in Massachusetts, results in more job creation, and benefits consumers. That's how you grow the state's economy."

The Appellate Tax Board ruling addressed appeals that Verizon and municipalities filed over the values placed on Verizon property by the state Department of Revenue. Under state law, the revenue department assesses the value of telephone company property, which is then taxed locally.

If upheld, the ruling would accomplish one of the goals of Governor Deval Patrick's Municipal Partnership Act: the repeal of a law exempting Verizon from local taxes on its poles and wires over public ways. The exemption was put in place in 1915 to spur the extension of telephone service to rural areas, but critics contend it is outdated.

The Department of Revenue is collecting from phone companies a list of their poles and wires over public ways. With that data, it plans to notify local assessors on May 15 of the value of that property in their communities. Cities and towns will need to compile similar information from cable companies, whose property is assessed locally.

Revenue officials have advised cities and towns that, with that information, they can begin taxing companies for the poles and wires next fiscal year.

But because Verizon could win its appeal, revenue officials have told municipalities not to spend the tax revenue. It can be spent only if the ruling is upheld on appeal.

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