321 Mass. 186 | Mass. | 1947
This is an appeal by the board of assessors of the city of Springfield (herein called the assessors) from
Pertinent facts found by the board may be summarized as follows: The taxpayer, a foreign corporation, with a usual place of business in this Commonwealth, filed with the commissioner on February 1, 1945, as required by G. L. (Ter. Ed.) c. 59, § 41, as amended, a return showing the cost, as of December 1,. 1944, of such of its machinery, poles, wires and underground conduits, wires and pipes, as it deemed was locally taxable in Springfield.
Thereafter the commissioner in accordance with the provisions of G. L. (Ter. Ed.) c. 59, § 39, as amended, certified to the assessors the valuation at which they should
Poles, wires and underground conduits, wires and pipes........$2,785,550 00
Machinery........ 71,300 00
Total.........' $2,856,850 00
It was. arrived at by accepting as correct the cost or book value set out in the taxpayer’s return and deducting therefrom fifteen per cent for depreciation. The taxpayer’s central office equipment, in addition to the conversion and generating machinery valued by the commissioner, included the following: aisle lighting equipment, balconies for distributing frames, connector banks, selector banks, batteries, battery cabinets, call registers, carrier equipment, carrier line filters and circuit breakers.
The board made detailed findings describing the functioning of the taxpayer’s telephone system. They need not be recited in full. In substance they were as follows: In the central exchange there is a huge battery upon which fundamentally the electric current is drawn for the operation of the system. This battery is charged by motor driven charging generators. The current for the motors which operate these generators is purchased on a two hundred eight volt circuit of alternating current from the Western Massachusetts Electric Company. The generators produce direct current of two different kinds — one of twenty-four volts and one of forty-eight volts. Part of this current goes into the battery to keep it constantly charged so that it will “be ready to stand by in the event of a power failure.” The current not used for the battery “goes through the system” and furnishes the electricity necessary for its operation. “Electricity, in other words, is converted into a type that the telephone company can use.” The electricity thus generated is “modulated for the distribution of telephone service to the consumer . . . [and] is needed to operate the ringing machinery of the system. It is all one
The assessors contend that the commissioner’s valuation of the taxpayer’s central office equipment should not have been limited to the conversion and generating machinery but should also have included the other equipment in the central office described above, and all of the taxpayer’s telephone instruments, teletypewriter units, and private branch exchanges in Springfield, together with all its poles and wires, or so called aerial construction, located on public ways in that city. (It has not been argued that the valuations fixed by the commissioner were improper with respect to the property valued.) In support of their contention the assessors argue (1) that the omitted property is "machinery” and as such is taxable under G. L. (Ter. Ed.) c. 59, § 39, as amended; (2) that, if not taxable as "machinery” under § 39, it is nevertheless taxable locally as "machinery employed in any branch of manufacture ” under G. L. (Ter. Ed.) c. 59, § 18, Second, as amended; and (3) that, if neither of these propositions is sound, such property is nevertheless “machinery used in the conduct of . . . [its] business” and hence taxable under G. L. (Ter. Ed.) c. 59, § 18, Second.
1. General Laws (Ter. Ed.) c. 59, § 39, as amended, provides: "The valuation at which the machinery, poles, wires and underground conduits, wires and pipes of all telephone and telegraph companies shall be assessed by the assessors of the respective towns where such property is subject to taxation shall be determined annually by the commissioner.” This section imposes no tax on the classes of property therein enumerated, but, in conjunction with the three following sections (40, 41 and 42), prescribes the procedure by which such property, to the extent that it is subject to
2. To determine what machinery of the taxpayer is locally taxable it is necessary to turn to G. L. (Ter. Ed.) c. 59, § 18, Second, as appearing in St. 1936, c. 362, § 2, which, so far as here material, provides: "Machinery employed in any branch of manufacture ... or, in the case of domestic business and foreign corporations as defined in section thirty of chapter sixty-three, machinery used in the conduct of the business, shall be assessed where such machinery or tangible personal property is situated to the owner or any person having possession of the same on January first.” If the omitted property described above was "machinery employed in any branch of manufacture,” it is, as the commissioner concedes, taxable locally and should have been included in the property valued by him. The board, however, found that, in so far as it was a question of fact, this property was not "machinery employed in any branch of manufacture.” Since the board’s decision is "final as to findings of fact,” it must stand unless vitiated by error of law in an issue of law raised before the board. G. L. (Ter. Ed.) c. 58A, § 13. Commissioner of Corporations & Taxation v. Boston Edison Co. 310 Mass. 674, 676. De Cordova v. Commissioner of Corporations & Taxation, 314 Mass. 371, 374.
In our opinion this finding reveals no error of law. The commissioner’s valuation, as previously stated, included the apparatus at the central office used in the conversion and generating processes described above, and no question is presented as to them. But the assessors argue that the taxpayer generates its own electricity which in turn is used to furnish power to its lines; that thereafter by a series of complicated processes the electricity converts human sound waves into artificial sound waves; and that these sound waves, although intangible are nevertheless a manufactured product. Thus it is argued that all of the taxpayer’s prop
What is included within the word “manufacture” has been considered by this court a number of times.
The fact that the taxpayer operates machinery for the
3. The assessors further contend that the omitted property should have been valued by the commissioner by reason of G. L. (Ter. Ed.) c. 59, § 18, Second, which provides that in the case of a foreign corporation as defined in “G. L. (Ter. Ed.) c. 63, § 30, cl. 2,” the “machinery used in the conduct of . . . [its] business” shall be taxed where it is situated. Section 30, cl. 2, as appearing in St. 1943, c. 459, § 1, defines “foreign corporations” as “every corporation, association or organization established, organized or chartered under laws other than those of the commonwealth, for purposes for which domestic corporations may be organized under chapter one hundred and fifty-six, which has a usual place of business in this commonwealth, or is engaged here, permanently or temporarily, in the construe-tian, erection, alteration or repair of a building, bridge, railroad, railway or structure of any kind, or in the construe-tian or repair of roads, highways or waterways, or in any other activity, requiring the performance of labor,” with exceptions not here material. The taxpayer is a foreign corporation organized under the laws of New York, and the assessors concede that it was not organized for a purpose for which a domestic corporation may be organized under
The assessors rightly do not contend here, as they did before the board, that the poles of the taxpayer together with the wires thereon erected on public ways were subject to local taxation under G. L. (Ter. Ed.) c. 59, § 18, Fifth, which provides that “underground conduits, wires and pipes laid in public ways . . . and poles, underground conduits and pipes, together with the wires thereon or therein, laid in or erected upon private property ... by any corporation . . . shall be assessed to the owners thereof in the towns where laid or erected” (emphasis supplied). It is to be noted that the statute makes no provision for the taxation of poles with the wires thereon erected on public ways but taxes only those located on private property.
The questions of. law discussed above were raised before the board by various requests for rulings and are brought here by specific assignments of error. These requests and assignments have been disposed of by what has been said, and separate discussion of them is not required. Since the decision of the board reveals no error of law, the order must be
Decision for commissioner.
The return disclosed the following
Overhead construction $481,146 96
Underground construction 2,795,993 63
Machinery . 83,911 22
Total . . S3,361,051 81
See Dudley v. Jamaica Pond, Aqueduct Corp. 100 Mass. 183; Byers v. Franklin Coal Co. of Lykens Valley, 106 Mass. 131; Hittinger v. Westford, 135 Mass. 258, 262; Ingram v. Cowles, 150 Mass. 155, 157; Wellington v. Belmont, 164 Mass. 142, 143; Barron v. Boston, 187 Mass. 168, 171-172; Coffin v. Artesian Water Co. 193 Mass. 274, 276; Commonwealth v. Green, 253 Mass. 458, 459.
In § 6 of that chapter it is provided that corporations may be organized “for any lawful purpose not excluded by section two,” but § 2 specifically excludes telephone companies.
The commissioner included in his valuation the poles and wires of the taxpayer which were located on private property.