Municipalities Cannot Assess Pole Attachers Unless the Attachers Consent to be Taxed
This case represents another chapter in the effort by New Hampshire municipalities to impose property taxes on users of public rights of way. Public utilities frequently place poles and conduits in the public right of ways pursuant to licenses granted by the local municipality. Under New Hampshire law, governmentally owned property is exempt from taxation unless used or occupied under a lease or other agreement which provides for the payment of property taxes by the party using or occupying the property. See RSA 72:23, I(a) and (b). The New Hampshire Supreme Court had previously ruled that pole licenses constitute “other agreements” for the purposes of this statute, requiring non-governmental entities which use or occupy those rights of way pursuant to those licenses to be required to pay properly assessed real estate taxes. Verizon New England v. City of Rochester, 151 N.H. 263, 268 (2004). Nashua amended its pole licenses issued to certain utility providers – Fair Point Communications and Public Service Company of New Hampshire – to provide that “in accordance with the requirements of RSA 72:23, I(b), the licensee(s) and any other entity nor [sic] or hereafter using or occupying municipal property pursuant to this license shall be responsible for the payment of, and shall pay, all properly assessed personal and real property. Segtel, a telecommunications company, had entered into pole attachment agreements with the utility providers to attach its fiber optic cables on their poles and conduits. When Nashua became aware of Segtel’s attachments, it imposed property taxes which Segtel challenged. The Supreme Court affirmed the trial court’s grant of summary judgment in Segtel’s favor. The Supreme Court concluded that the City could not establish that Segtel had consented to be taxed because Segtel was not a party to the pole licenses issued to the utility providers and thus, not subject to their terms. Furthermore, the record did not support any implied consent to be taxed based on Segtel’s knowledge that the utility providers had agreed to pay taxes and the City’s acquiescence in Segtel’s use of the rights of way without issuance of a new license to it.
For further information about this decision, please contact Margaret H. Nelson, Leader of Sulloway’s State Taxation Practice Group.