351 Mass. 394 | Mass. | 1966
This is an appeal (see G. L. c. 58, § 2
By G. L. c. 59, § 5, Sixteenth (3),
The company prior to 1964 had been classified as a “domestic manufacturing corporation. ’ ’ The assessors did not receive from the Commissioner prior to April 1,1964, a list of the corporations subject to taxation, as required by Gr. L. c. 58, § 2 (fn. 1). Accordingly, to protect their right to a review by the State Tax Commission under § 2, the assessors applied on April 15,1964, for such a review of the company’s classification, and asked the commission to classify the company as a public utility corporation.
On May 2, 1964, the commission notified the assessors in writing that no change of classification would be made. On May 28, 1964, the assessors filed with the board a petition for review of this classification.* **
This court held in the Springfield case reported in
The telephone cases do not control the present case, which is governed by different statutory provisions. Under c. 58. § 2, and c. 63, § 38C, whether a corporation may be classified as a domestic manufacturing corporation depends upon whether it in fact (a) is engaged in manufacturing and
In the telephone tax cases, for reasons stated in those decisions, statutory provisions required this court to treat the completion, prior to December 1 of the tax year, of the board’s review of the Commissioner’s valuation as a condition precedent to any higher assessment by the assessors. In classification cases arising under c. 58, § 2, no practical reasons and no statutory language compel us to treat completion of the appeal procedure as a condition precedent to an assessment. If the assessors disagree with the Commissioner and appeal from his classification, the assessors are not prohibited by statute from assessing the corporation (as was done in this case, see fn. 5), in accordance with their view of the correct classification, at least at any time prior to the last day (December 20 of the year to which the tax relates) for an “omitted” assessment under c. 59, § 75. The assessed corporation may then seek an abatement under c. 59, § 59, and have the assessors’ action reviewed by the board.
There is thus no such necessary or practical interdependence between the commission’s classification, the local assessment, and abatement relief therefrom, as was found in the telephone cases to exist between the Commissioner’s (or the board’s) valuation, the local assessment, and the telephone company’s statutory right to seek abatement of that assessment. We do not regard c. 59, § 5, Sixteenth (5), see fn. 2, as requiring that the classification be finally determined before an assessment, but merely as providing that its final determination shall govern the local taxation of corporate machinery used in manufacture. Cf. Assessors of Springfield v. New England Tel. & Tel. Co. 330 Mass. 198, 201; State Tax Commn. v. Assessors of Haverhill, 331 Mass. 306, 309.
Certain additional considerations support an interpretation of the classification procedure under c. 58, § 2, and related taxing provisions in a manner which will permit completion of the procedure. (1) Completion of the procedure under § 2 (which involves a petition to the board and possibly also an appeal to this court) may necessitate trial of complicated issues of fact and consume a considerable period of time. It would take clear statutory language to lead us to the conclusion that the Legislature intended to require dismissal of fair, carefully designed, remedial proceedings merely because the proceedings are not completed within the tax year. (2) Changes in the facts affecting a particular corporation’s classification are not likely to take place from year to year. The completion of the classification procedure is thus likely to afford strongly persuasive guidance to the Commissioner and to assessors in later years. This practical consideration may shed light on the probable legislative purpose. (3) It is of some significance that, in three cases before this court, appeals under § 2 were not treated as moot (although the decisions do not discuss the issue) after the close of the taxable year to which the classification related. Commissioner of Corps. & Taxn. v.
We conclude that c. 58, § 2, and related sections should not be narrowly interpreted by analogy to cases under different statutes (see fn. 6), long since changed and clarified, which relate to the very special problem of consistent local taxation of the tangible property of telephone systems. Any conclusion that classification proceedings necessarily become moot in the event that appeals under § 2 are not completed by December 20 of the tax year would frustrate the legislative intention, revealed in § 2 (and by its amendment by St. 1941, c. 726, § 2; see 1941 House Doc. No. 3), to give to assessors, and any affected corporation, a fair chance to test before the board the correctness of the Commissioner’s classification.
The decision of the Appellate Tax Board is reversed. The case is remanded to the board for consideration of the assessors’ petition upon the merits and for further proceedings consistent with this opinion.
So ordered.
Section 2 (as amended through St. 1958, c. 490, § 1; see later amendment by St. 1965, c. 696, § 1) reads: “The commissioner shall annually, on or before April first . . . forward to each board of assessors a list of all corporations . . . liable on January first ... to taxation under chapters . . . [59 and 63]. Such list shall indicate . . . corporations . . . classified by the commissioner as manufacturing corporations .... Any person aggrieved by any [such] classification ... or by any action taken by the commissioner under . . . this section may, on or before April thirtieth . . . file an application with the state tax commission . . . stating therein the classification claimed . . . [proviso not relevant]. The commission shall, within ten days after . . . [its] decision . . . give written notice thereof to the applicant. A person may appeal to the appellate tax board within thirty days after receiving the notice ... or . . . after the time when the application for classification is deemed to be refused . . . [by failure of the commission to act within twenty days from the date of the application]. The decision of the board shall be binding upon the parties to any proceeding pending or brought before it which involves a tax for the year to which the decision is applicable. For the purposes of this section, ‘person’ shall include a board of assessors.” See G. L. c. 58A, §§ 6 and 13, as amended.
Section 5, Sixteenth, applies here in the form in which it was rewritten by St. 1957, c. 541. Section 5, Sixteenth (5), provides that the “classification by the commissioner, the commission or the . . . board, as the case may be, of a corporation as ... a domestic manufacturing corporation . . . shall be followed in the assessment ... of machinery used in the conduct of the business.”
Chapter 63, § 380 (as amended through St. 1937, c. 383, § 1; see later amendment by St. 1964, c. 723, § 3), reads in part, “Every corporation organized under or subject to .. . [c. 156] which is engaged in manufacturing shall, for the purposes of this chapter, be deemed to be a domestic manufacturing corporation. Every domestic manufacturing corporation shall be taxed in the same manner ... as a domestic business corporation, except in so far as the determination of the excise under this chapter may be affected by reason of the exemption from local taxation of the machinery of a domestic manufacturing corporation” (emphasis supplied).
The assessors in their petition to the board took the position (a) that the company was not a “domestic manufacturing corporation” because it (see fn. 3) was not “organized under or subject to” Gr. L. c. 156, and (b) that it was in fact an “electric company” subject to Gr. L. c. 164. Accordingly, the assessors contend that the company is subject to local taxation on its machinery used in manufacture. See G. L. e. 59, § 5, Sixteenth (1). We, of course, need not now pass upon this substantive contention. The only question before us is whether the board eorreetly held that the issues raised by the assessors ’ petition had become moot.
Additional facts, which do not appear to be disputed, are recited in the company’s motion before the board to dismiss the assessors’ petition. On December 11, 1964, the assessors (see Gr. L. c. 59, § 75, as amended through St. 1946, c. 339) assessed a tax upon the company’s “machinery used in manufacture” as property “omitted from the annual assessment of taxes.” On January 29, 1965, the company paid under protest the tax thus assessed. On March 10, 1965, it applied to the assessors for an abatement of that tax (see G. L. c. 59, § 59, as amended through St. 1963, c. 125; see also later amendment by St. 1965, c. 615, § 2) in its entirety. The assessors, by failure to act upon the application, have in effect denied it. We assume that the company by now has appealed to the board.
Section 73 was repealed by St. 1955, c. 344, § 2. See discussion in Pike and Cohen, Annotations to Nichols’ Taxation in Massachusetts, pp. 41-42, 53.
This court noted in the cases reported at 330 Mass. 433, 437, and 331 Mass. 677, 681, various practical problems which might arise from the somewhat obscure provisions of §§ 39 and 73, as they read prior to later amendments (see fn. 6). If possible, we should interpret wholly different sections (c. 58, § 2; c. 59, § 5, Sixteenth, and § 59) in a manner which will avoid comparable difficulties.
The court indicated (p. 422) that, in any event, an assessment under § 39 could not be made by “an assessment [pursuant to c. 59, § 75] of omitted property after December 20” of the year to which the tax related.
Under the State Administrative Procedure Act, G. L. e. 30A, § 10 (enacted in 1954 after the decisions in the telephone tax cases discussed above), the assessors, the corporation, or the Commissioner may be given appropriate opportunity to intervene before the board in either the proceedings relating to the classification or those concerning the local assessment, if not already party thereto.