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Volume 2 - Opinions of Counsel SBEA No. 79

Opinions of Counsel index

Real property, definition of (telephone equipment) - Real Property Tax Law, §§ 102(12)(d), 470:

Electrical transformers and switching gear owned by the telephone company are taxable real property regardless of where they are installed. For example, such equipment installed in tax exempt buildings is still taxable real property.

Our opinion has been requested as to whether certain property belonging to the telephone company is real property for taxation purposes.

Electrical transformers and switching gear and other equipment owned by the telephone company is often installed in a basement room of large tax exempt buildings, i.e., governmental or hospital buildings. The question is whether this property is real property for taxation purposes.

Whether this type of equipment is taxable does not depend upon whether it is located in a tax exempt building.

Unquestionably, switching gear and similar equipment owned by telephone companies are taxable real property regardless of where they are installed.

Whether this property is taxable real property is governed by the standard set up in subdivision 12 of section 102 of the Real Property Tax Law, which defines the meaning of “real property” for taxation purposes. The relevant provision for property of telephone companies is contained in paragraph (d), which reads as follows:

“Telephone and telegraph lines, wires, poles and appurtenances; supports and inclosures for electrical conductors and other appurtenances, upon, above and under ground . . .”

In People ex rel. Holmes Electric Protective Co. v. Chambers, 1 Misc.2d 990, 125 N.Y.S.2d 436, aff’d 285 App. Div. 886, 139 N.Y.S.2d 245, the wiring systems owned by a company offering burglary protection which led from wires located in streets leased from the New York Telephone Company onto each subscriber’s premises, were held to be taxable real property under this provision. The court reasoned that the language covered any system which utilized electrical impulses for the transmission or receipt of messages, regardless of whether or not the property is used exclusively in the commercial telephone or telegraph business as such.

Attention should be directed to section 470 of the Real Property Tax Law (L. 1973, c. 1019) effective December 31, 1974, which limits the assessed valuation of certain telephone and telegraph equipment.

It is also to be noted that the law governing equipment and facilities belonging to power and light companies installed in buildings owned by others is different.

November 1, 1972
Revised September 17, 1973

NOTE:  But see Opinion 9-16.

Updated: