Unequal NH Taxation Was an Error, Not a Plot
(CN) - Although Comcast got a break on taxes its competitor paid Concord for the past decade, there is no need to reimburse the smaller company, the New Hampshire Supreme Court ruled.
Concord requires telecommunications companies to pay a right-of-way tax for the use of city land where poles, wires and other equipment are placed.
Comcast, which provides cable services pursuant to a franchise agreement, did not pay New Hampshire's capital that tax until 2010, however, when a state body declared the exemption agreement illegal.
Northern New England Telephone Operations dba Fairpoint Communications sought the refund of its tax assessments from 2000 to 2010, alleging that the city violated its right to equal protection by subjecting it to selective taxation.
The trial court in Merrimack agreed with Fairpoint, saying, "There can be no serious argument that the city of Concord had a rational governmental interest in deciding not to tax entities based on its misunderstanding of the law or its lack of diligence in investigating the facts."
In reversing Friday, however, the New Hampshire Supreme Court said Fairpoint must first show tht Concord intentionally schemed to tax it and not Comcast to claim an equal-protection violation.
"To show 'selective taxation,' FairPoint 'must show that the selective enforcement [of the tax] was a conscious, intentional discrimination,'" Justice Gary Hicks wrote for the unanimous court. "Accordingly, in order to succeed on its claim of selective tax treatment, FairPoint must demonstrate 'something more' than 'mere errors of judgment by officials,' or 'that the enforcement was merely historically lax.'"
Under Fairpoint's reading of the law, the failure to tax one person subject to the tax may form the basis for a selective-taxation claim for every taxpayer.
"FairPoint's counsel defended this hypothetical at oral argument, by insisting that, if ninety-nine out of 100 similarly situated homeowners were assessed a real estate tax, but one homeowner was not taxed due to an error, each of the ninety-nine taxed homeowners would have a valid equal protection claim," Hicks said. "We do not agree that such errors in taxation, without intentional selection, violate the equal protection rights of taxpayers."