What do certain utility companies pay instead of property taxes for specified portions of their property?

Utility companies in New Jersey pay a Gross Receipts Tax instead of traditional property taxes on certain portions of their property. This tax is levied on the total revenues or gross receipts that a utility generates from its operations, rather than taxing the property directly based on assessed value. The rationale for this system is to provide a stable revenue stream for municipalities while recognizing the unique nature of utility properties, which may include infrastructure such as power lines and pipelines that are not easily appraised.

This method allows utilities to contribute to local revenues without the complexities of property assessment that typically apply to residential or commercial properties. By utilizing a Gross Receipts Tax, it simplifies the taxation process for these companies, ensuring they still provide financial support to local governments while maintaining their operations efficiently.