The executors under the will of Raynor G. Wellington (Wellington) brought a petition in equity against the Commissioner of Corporations and Tаxation (Commissioner) in the Probate Court to recover the legacy tax assessed upon money which, pursuant to a provision in the will, was deducted from the residue and used to pay the succession tax assessed against Mrs. Wellington as surviving joint ownеr of certain bank accounts. The Commissioner filed an answer asserting that the disputed tax was proper. The judge resеrved and reported the case upon the pleadings and a statement of agreed facts.
Wellington died on Januаry 7, 1965. By his will he left his wife certain real and personal property, bequeathed specific sums to others, and gave the rеsidue in trust for his wife for her lifetime and thereafter for others. The will directed “that all legacy, succession, inheritance, and estate taxes or taxes of that nature which may be payable by reason of my death be paid out of . . . [part оf the residue] and as administration expenses thereof and be not apportioned.” Mrs. Wellington was also joint owner with Wellington of property in one checking and seven savings accounts. The executors paid the tax on the amount *450 passing to Mrs. Wellington as surviving joint owner of the bank accounts, including an amount assessed by the Commissioner on the theory that the payment from the residue of the tax on the amount of the bank accounts was an additional pecuniary legacy tо Mrs. Wellington. The executors dispute that theory and seek to recover what they call “a tax on a tax.”
The case turns on G. L. c. 65, § 19: “When provision is made by any will or other instrument for payment of the legacy or succession tax upon any gift thereby made out of аny property other than that so given, no tax shall be chargeable upon the sum to be applied in payment of such tax.”
1. It is common ground that if a testator leaves $100,-000 to X, the Massachusetts legacy tax is computed on the gross amount, withоut deduction for the amount of the legacy tax. Thus if the tax rate is ten per cent, X pays a ten per cent tax on $100,000, although the net amount received is $90,000. In a sense X pays “a tax on a tax.”
On the other hand, it is also common ground that, if the testаtor by will leaves $100,000 to X and the residue to Y, and provides that the tax on X’s share is to be paid out of the residue, G. L. c. 65, § 19, requires that the tax to X be computed on $100,000 and that the tax to Y be computed on the residue after the tax payment on X’s sharе.
Prescott
v.
St. Luke’s Hosp. of New Bedford,
The Commissioner seems to suggest that the result in the second сase described above is unsound, citing
Matter of Estate of Irwin,
2. The case in dispute is the case where X’s $100,000 passes outside the will, as in the case of a joint bank account. In such a case G. L. c. 65, § 19, seems somewhat ambiguous. On the one hand, it could apply “[w]hen provision is made by any will . . . fоr payment of the legacy or succession tax upon any gift . . . made [by that will] . . ..” On the other hand, it could apply “[w]hen provision is made by any . . . instrument for payment of the legacy or succession tax upon any gift . . . made [by any instrument] . . . .” In other words, “thereby” might meаn “by the same instrument” or it might mean “by any instrument.” As a purely linguistic matter, if the statute had been enacted at a time when jointly owned рroperty was subject to the tax, we might lean toward the meaning “by the same instrument.” But G. L. c. 65, § 19, stems from St. 1907, c. 563, § 11, and property held jointly with right оf survivorship was not subject to the Massachusetts succession tax until 1916. We cannot be sure whether the Legislature, when it decided to treat jointly owned property like property passing by will for some purposes, also intended to apply to jointly owned property other provisions originally directed only to legacies.
3. According to the statement of agreed facts, the application of the Massachusetts succession tax to cases like the present onе began with the enactment of St. 1916, c. 268. “After that date as a matter of practice the Commonwealth . . . did not endeavor to collect an additional tax where the will directed that the Legacy and Succession Tax on joint propеrty be paid out of the residue until formal notice was issued by the Commissioner in September, 1968 . . ..” Thus it took the responsible tax officials more
*452
than fifty years to correct their error, if it was an error. The notice issued in September, 1968, states that “we havе, after review and research determined that our current policy and procedure should be changed to cоmply with our interpretation of the . . . statute.” It does not purport to be a “regulation” pursuant to G. L. c. 14, § 4, or to be in compliance with the requirements of G. L. c. 30, § 37, or G. L. c. 30A, § 2 or § 3. See
Packard Mills, Inc.
v.
State Tax Commn.
4. “Undue weight, of course, is not to be given to administrative interpretations óf statutes which are not ambiguous. Where, however, the language of a statute is vague or permits more than one reasonable interpretation, contemporary administrative construction, especially if long continued, is of significance. See
Cleary
v.
Cardullo’s Inc.
5. A decree is to be entered adjudging that a tаx in the amount of $4,202.96 was wrongly exacted, ordering' an abatement thereof, and ordering the Treasurer to pay that amount, with interest from the date of payment, to the executors.
So ordered.