Verizon loses tax claim for $22,000,000 from Rhode Island – John J. “Jack” Partridge

by John J. “Jack” Partridge, contributing writer

In a matter that seems to have escaped most media attention, Verizon appealed the decision of the Rhode Island Tax Administrator to reject Verizon’s claim of a $22,000,000 tax refund.

Under applicable statutes, the state collects a tangible property tax on Verizon’s tangible property throughout Rhode Island on behalf of Rhode island municipalities which receive the proceeds of the tax, and it is not stated explicitly in the statute, or otherwise adjudicated, as to whether the state or municipalities would bear the burden of such a refund if Verizon was successful in its appeal,.  

Therefore, Providence intervened in the suit on the side of the Tax Administrator. It was estimated the adverse effect of a refund could potentially cost Providence in excess of $2,000,000 for each tax year in question so, out of an abundance of caution, Providence intervened in the appeal to support the Tax Administrator’s rejection of Verizon’s claim, so as to protect itself potentially from liability for large amounts in current and later tax years.

Other municipalities attempted to join Providence but the Supreme Court affirmed a District Court ruling that their interests were legally the same as Providence, so it was not necessary for those municipalities to join the suit.

In essence, the appeal involved an interpretation of RIGL 44-13-13 as to the proper method of determining what constitutes accumulated depreciation under the statute. The Tax Administrator asserted the statute requires a uniform method of depreciation based on book value of Verizon’s taxable tangible property, and not a subjective market value methodology urged by Verizon involving economic and functional obsolescence of tangible property. 

The District Court Judge William Trezant ruling on a motion for summary judgement, analyzed the language of the statute and sided with the Tax Administrator, thereby, at least momentarily saving the state, and potentially municipalities, of millions of dollars of liability.

Verizon has asked the Rhode Island Supreme Court to review the judgment; thus, the Rhode Island Supreme Court will have the final say on the issue, but in the meantime the state and its municipalities can breathe a sigh of relief.

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To read more columns by Jack go to: https://rinewstoday.com/our-team/john-j-jack-partridge/

John J. ‘Jack’ Partridge, is a retired lawyer and Senior Counsel to the firm of Partridge Snow & Hahn LLP, with four offices in Rhode Island and Massachusetts.

A Pawtucket native, Jack graduates from St. Raphael Academy and summa cum laude of Providence College, where he majored in history. After Harvard Law School, he served in the United States Army in Vietnam, where he was awarded the Joint Service Commendation Medal. In 1967, he joined the firm of Tillinghast Collins & Tanner. In 1988, he became a founding partner of Partridge Snow & Hahn LLP.

Jack has been engaged in many civic, political, governmental, and business organizations, serving as legal counsel to the Greater Providence Chamber of Commerce for 27 years and was chairman of the Old Slater Mill Association, Common Cause Rhode Island, and Memorial Hospital of Rhode Island.

He is the co-founder of The Pawtucket Foundation and an officer and director of innumerable not-for-profit entities. He served as a member of the Board of Directors of the Pawtucket Boys & Girls Club and was Treasurer of the Ocean State Charities Trust.

Jack has a long history of leadership involvement with Providence College, which recognized him in 1999 with the Providence College Alumni Association Recognition Award for Public and Community Service, and in 2011, with an honorary Doctor of Laws degree.

He is married to the former Regina McDonald and has three children: Sarah, Gregory and David.