Source: https://www.jdsupra.com/legalnews/new-york-court-of-appeals-declares-27800/
Timestamp: 2020-02-22 18:28:47
Document Index: 47424823

Matched Legal Cases: ['§ 102', '§ 102', '§ 102', '§ 102', '§ 102', '§102', '§ 102', '§ 102']

New York Court of Appeals Declares Telecommunications Infrastructure and Fiber Optic Cables Are Taxable Real Property | Hodgson Russ LLP - JDSupra
(i) When owned by other than a telephone company as such term is defined in paragraph (d) hereof, all lines, wires, poles, supports and inclosures for electrical conductors upon, above and underground used in connection with the transmission or switching of electromagnetic voice, video and data signals between different entities separated by air, street or other public domain, except that such property shall not include: (A) station connections; (B) fire and surveillance alarm system property; (C) such property used in the transmission of news wire services; and (D) such property used in the transmission of news or entertainment radio, television or cable television signals for immediate, delayed or ultimate exhibition to the public, whether or not a fee is charged therefor.
RPTL § 102(12)(i). The Court determined that the plain language of the statute and legislative intent of RPTL § 102(12)(i) was to tax outside plant telecommunications property as real property.
The Respondents City of Mount Vernon and the Mount Vernon City School District moved to dismiss the action, contending that T-Mobile’s equipment was taxable under RPTL § 102(12)(i) and (b) and therefore correctly included on the assessment rolls. The Supreme Court, Westchester County (Cacace, J.) agreed with Respondents that the real property was taxable and dismissed the action. In its holding, the Supreme Court examined the history of RPTL § 102(12)(i) and observed that the Legislature amended RPTL § 102(12)(i) in 1987 based on deregulation of the telecommunications industry and intended for telephone equipment, including the installations at issue, to be taxable.
Separate from the legislative intent and purpose of the statute, Respondents also argued that the installations were taxable because they meet the common law definition of a fixture under RPTL §102(12)(b). That is to say that equipment is (1) actually annexed to real property or something appurtenant thereto; (2) [ ] applied to the use or purpose to which that part of the realty with which it is connected is appropriated; and (3) [ ] intended by the parties as a permanent accession to the freehold. Matter of Metromedia, Inc. v. Tax Comm’n of the City of N.Y., 60 N.Y.2d 85, 90 (1983). The equipment is a capital improvement installed for long-term use and which remains permanently in place, meeting the common law definition of fixture. As a fixture, the equipment would also be taxable on that basis.
In upholding the taxability of telecommunications installations, the Court of Appeals unanimously affirmed the Second Department’s decision in T-Mobile. The Court of Appeals expressly overruled the RCN case relied upon by T-Mobile and rejected T-Mobile’s argument that its installations were not taxable. The Court held that “[b]ecause the property at issue here consists of lines that transmit signals between users across public domain, taxation of this property comports with the plain text of paragraph i [of RPTL § 102(12)] and the legislative intent underlying [RPTL § 102].”). The Court focused on the nature of the property rather than the actual physical makeup. More specifically, the Court held that there was no ambiguity in the statute and T-Mobile’s installation and fiber optic cables were clearly taxable. The Court declined to reach the question of whether the equipment was also taxable as a fixture.
The ruling by the Court of Appeals resolves the conflict among the Appellate Divisions and answers affirmatively the question of the taxability of telecommunication installations under the RPTL. The financial impact of this decision is significant, as telecommunications companies had sought millions of dollars of retroactive and prospective relief, and their equipment and fiber optic cables statewide will now be taxed and future installations will be added to the tax rolls. Jurisdictions that removed outside plant from their tax rolls can now add it back for future tax years.