DSL Reports calls our attention to a fight underway between FairPoint and 100 New Hampshire communities involving taxes on telephone poles and conduits.
A few years ago that infrastructure was exempt from taxation because the communities hoped that would spur telecom company service deployments. But that exemption has run out and the state voted earlier this year not to reinstate it, reports the Berlin Daily Sun, a local New Hampshire media outlet.
FairPoint isn’t taking kindly to that move and has sued the local communities on both the constitutionality of taxing its poles and conduits and the valuation of those poles. For the city of Berlin alone FairPoint’s tax bill is nearly $45,000, the Daily Sun reports.
In FairPoint’s defense, that amount seems a bit steep, considering that the population of Berlin is less than 10,000. On the other hand, electric utilities have to pay taxes on their poles so a case could be made that telco poles also should be taxed.
FairPoint argues, however, that electric companies are taxed differently. In addition, the company says the tax assessment is unconstitutional because it assesses the company’s use of the right-of-way as well as the poles and conduits, thereby resulting in double taxation.
FairPoint’s New Hampshire president told the Daily Sun that the telco has received approval to pass a substantial portion of the taxes on to customers as a surcharge on their monthly bill. Accordingly, he said, “While municipalities see this as a windfall, it’s highly unlikely that taxpayers will see any benefit.”
Many municipalities have seen their tax base decline during the economic downturn the U.S. has been experiencing, so it’s not surprising that those municipalities are looking for new revenue sources. And depending how the FairPoint case is resolved we could see either a rise in telephone infrastructure taxation or we could see those initiatives curtailed.
