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Volume 8 - Opinions of Counsel SBEA No. 85

Opinions of Counsel index

Real property, definition of (telecommunications equipment) (CATV) - Real Property Tax Law, § 102(12)(d), (i); (17):

Equipment used in the receipt, relay, distribution and transmission of CATV signals, and located on private property, including main transmission cables located on private rights-of-way, is personal property. [4 Op.Counsel SBEA No. 24 modified].

Section 300 of the Real Property Tax Law provides that all real property in this State is subject to taxation “unless exempt therefrom by law.” The power to define and to classify which property should be taxable as real property is vested in the State Legislature (Metromedia, Inc. v. Tax Com’n of the City of New York, 60 N.Y.2d 85, 455 N.E.2d 1252, 468 N.Y.S.2d 457 (1983)).

Subdivision 12 of section 102 of the RPTL provides numerous definitions of what constitutes real property. Cable television (CATV) equipment located in public thoroughfares has been assessed as tangible property of a “special franchise” (a special franchise is real property by definition of paragraph (h) of section 102(12)). CATV equipment situated on private property had been considered real property within the definitions of paragraphs (d) (“telephone and telegraph lines, wires, poles and appurtenances”) or (e) (“mains, pipes and tanks permitted . . . to be . . . placed in, upon, above or under any . . . private street or place”).

Thus, the location of equipment is an element in the definition of real property in section 102. Moreover, as a result of case law and recent State legislation codifying these judicial decisions, location is the crucial factor in determining the taxable status of cable television property.

In 1980, the Court of Appeals determined that because section 102(12)(d) is “aimed principally at expanding the definition of real property with respect to utility companies” and cable television companies are not utilities, movable equipment of CATV’s, whether located at the facilities of the CATV company or in the homes of its subscribers, is not taxable real property. (Manhattan Cable TV Services v. Freyberg, 49 N.Y.2d 868, at 870, 405 N.E.2d 178, 427 N.Y.S.2d 933, at 934 (1980)). In 1983 and 1984, this decision was extended to cable television main transmission cable located on private property (Cablevision Systems Development Co. v. Board of Assessors of County of Nassau, 98 A.D.2d 818, 470 N.Y.S.2d 37 (2d Dept. 1983); and American Cablevision of Rochester, Inc. v. Jacobs, 101 A.D.2d 65, 474 N.Y.S.2d 653 (4th Dept. 1984)). In the American Cablevision case, the Appellate Division, Fourth Department, concluded that paragraph (e) of section 102(12) (“mains, pipes and tanks * * *”), like paragraph (d), is applicable only to utility companies and, therefore, could not serve as the authority for the assessment and taxation of cable television transmission lines.

Subsequent (and partially in response) to these judicial decisions, the State Legislature revised the definition of real property to the extent that it included various forms of telecommunications equipment. Paragraph (d) of section 102(12) was amended to apply only to “local” telephone companies (i.e., those providing local rather than long distance service). A new paragraph (i), adding “telecommunications equipment” as a category of taxable real property, provides an exclusion for cable television equipment used for the transmission of news and entertainment programming (see generally, chapters 71, 72 and 463 of the Laws of 1985).

Although the Legislature has now classified as personal property cable television equipment on private land, the definition of special franchise in section 102(17) has not been amended. Therefore, cable television transmission cable which is located in the public way continues to be subject to taxation based upon assessment by the State Board of Equalization and Assessment.

September 23, 1985