Calling existing statutes “arcane,” more than 30 legislators on Monday said telecommunications companies should not receive property tax breaks, promoting a bill at the State House that would close loopholes in current law and potentially generate more than $140 million in state revenue.
Legislators said telecommunications companies, which are part of a multi-million dollar industry, should not receive tax breaks at the cost of taxpayers. If the bill is passed, it would put all taxpayers on the same playing field, they said.
“This bill is about fairness — for taxpayers, for businesses and for utilities,” Rep. Stephen Kulik (D-Worthington) said. “With the fiscal crisis currently facing cities and towns, it is critical that the Commonwealth examine all possibilities to close these loopholes. I strongly encourage constituents and legislators and ask them to support this bill.”
Although legislators have proposed a similar measure before, “it’s a major priority for legislators this term,” Kulik said.
Under state law, telecommunication poles and wires located on public property are not taxed. Local property tax statutes have not been able to keep pace with the rapid and radical proliferation of the telecommunication industry, according to legislators promoting the bill.
In Boston, legislators said, the average homeowner pays an extra $185 in property taxes per year to subsidize these tax breaks.
Only one-third of property owned by telecommunications companies, such as Verizon, is taxed, but the new bill would change this statute, city assessor Ronald Rakow said.
Although Verizon officials claim that paying taxes will lead to increased rates for customers, Rakow said, there is no correlation between property taxes and the cost to customers.
Legislators supporting this bill said it is absurd that small businesses are taxed on property while multi-million dollar corporations are exempt from such payments.
Companies like Verizon and Sprint aggressively structure their ownership to avoid paying taxes, Rakow said. Loopholes in the current law allowed Sprint to move ownership of its Springfield property to Delaware, evading Massachusetts tax regulations.
Rep. James Eldridge (D-Acton) called the bill a “no-brainer.” Every penny from property taxes will go directly into the towns that have suffered from the telecommunications companies’ tax breaks, he said.
The revenue generated from the bill would help fund education, public health and safety, the bill’s supporters suggested.
The Massachusetts Municipal Association, the Massachusetts Association of Assessing Officers and many cities and towns support the legislation.
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