Audit Report on the Department of Finance’s Inclusion of Cell Tower Revenue in the Assessment of Real Property Taxes

Audit Finding and Conclusion

The objective of this audit was to determine whether the NYC Department of Finance (DOF) ensured that property owners reported cell site income on their Real Property Income and Expense (RPIE) Statements.

The audit found that DOF did not use available data to ensure that all property owners reported cell site income on their 2017 and 2018 RPIE Statements.  DOF did not identify unreported cell site income or make adjustments to gross income (known as “add backs”) totaling $23.2 million, resulting in potential tax losses totaling $9.1 million.

To address these issues, the audit recommends that DOF earmark properties that are not valued when DOF performs cell site add backs and review them during the change period; adjust reported income for all properties for which property owners failed to report cell site income, retroactively, and recoup to the extent possible; and use available tools, such as the Department of Buildings Cellular Antenna Filings Report on an annual basis, and pictometry and field observations, to identify and verify the existence of cell sites and confirm with telecommunication companies whether those sites are in active use.

Agency Response

In its response, DOF stated that in general it agrees that it can improve quality control of cell tower revenue information to ensure that it is included in property assessments, but it finds that the Comptroller’s Office has overstated the potential revenue for the specific properties it reviewed.