Bell Atlantic Mobile v. Com'R of Revenue

• Decision Date: 28 April 2008
• Docket Number: SJC-10047.
• Citation: 884 N.E.2d 978,451 Mass. 280
• Parties: BELL ATLANTIC MOBILE OF MASSACHUSETTS COPORATION, LTD.<SMALL><SUP>1</SUP></SMALL> v. COMMISSIONER OF REVENUE & others<SMALL><SUP>2</SUP></SMALL> (and a companion case<SMALL><SUP>3</SUP></SMALL>).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

884 N.E.2d 978

451 Mass. 280

BELL ATLANTIC MOBILE OF MASSACHUSETTS COPORATION, LTD.¹ v. COMMISSIONER OF REVENUE & others² (and a companion case³).

SJC-10047.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued March 6, 2008.

Decided April 28, 2008.

Helgi C. Walker, of the District of Columbia (Elbert Lin, of the District of Columbia, & Kathleen King Parker, Boston, with her) for Bell Atlantic Mobile of Massachusetts Corporation, Ltd.

Richard G. Chmielinski, Assistant City Solicitor, for Board of Assessors of Newton.

Daniel J. Hammond, Assistant Attorney General (Daniel A. Shapiro, Special Assistant Attorney General, with him) for Commissioner of Revenue.

The following submitted briefs for amici curiae:

Rosemary Crowley, David J. Martel, Springfield, & Thomas J. Urbelis, Boston, for Massachusetts Association of Assessing Officers & another.

Anthony M. Ambriano for Board of Assessors of Boston & another.

Michael E. Malamut, Boston, Martin J. Newhouse, & Jo Ann Shotwell Kaplan for New England Legal Foundation & another.

Present: GREANEY, IRELAND, SPINA, COWIN, CORDY, & BOTSFORD, JJ.

COWIN, J.

The central issue in this case is whether a provider of wireless cellular telecommunications, or "cell phone" service, qualifies as a "telephone company" in order to obtain central valuation of certain of its personal property by the Commissioner of Revenue (commissioner), rather than being subjected to separate valuations by local boards of assessors.⁴ For the reasons stated below, we hold that a provider of wireless cellular telecommunications service is not a "telephone company" for purposes of central valuation.

Background. Bell Atlantic Mobile of Massachusetts Corporation, Ltd. (Bell Atlantic Mobile), the successor in interest to Bell Atlantic Mobile of Massachusetts LLC, is a provider of what is popularly known as "cell phone" service. As currently organized, Bell Atlantic Mobile is a Bermuda corporation doing business in Massachusetts under the name "Verizon Wireless."

For fiscal year 2004, the Commissioner of Revenue centrally valued Bell Atlantic Mobile's property, treating it as a "telephone company" for purposes of G.L. c. 59, § 39; however, the commissioner determined that Bell Atlantic Mobile was not eligible for the property tax exemption granted to certain utility corporations⁵ because it was not incorporated as of January 1, 2003. Bell Atlantic Mobile appealed under G.L. c. 59, § 39 to the Appellate Tax Board (board), naming as appellees both the commissioner and the boards of assessors of the 220 municipalities in which it owns property (" § 39 appeals"). In each of the § 39 appeals, Bell Atlantic Mobile argued that the commissioner's valuation of its property was too high, both because it included property that should have been subject to the corporate utility exemption, and because the commissioner's valuation methodology was improper. Each § 39 appeal also sought abatement of property taxes from the relevant board of assessors.⁶ Seeking the same relief under other provisions, Bell Atlantic Mobile filed separate appeals pursuant to G.L. c. 59, §§ 64 and 65, requesting abatement of property taxes paid to the 220 cities and towns in which its personal property was located (" § 65 appeals"). Meanwhile, the board of assessors of Newton filed its own § 39 appeal, arguing that Bell Atlantic Mobile was not a "telephone company" within the meaning of G.L. c. 59, § 39, and that the commissioner had therefore erred in centrally valuing its property. The Newton assessors argued, additionally, that the commissioner had undervalued the taxable property.

The board consolidated the § 39 appeals and the § 65 appeals. It then bifurcated the issues for trial, holding hearings first on the issue of Bell Atlantic Mobile's eligibility for central valuation and the corporate utility exemption, and deferring all questions of the correct value of the taxable property.

The board decided the consolidated § 39 appeals on May 15, 2006, holding that neither Bell Atlantic Mobile nor its limited liability company predecessor was a "telephone company" entitled to central valuation under G.L. c. 59, § 39. The same day, the board also issued an order in the § 65 appeals, ruling that because Bell Atlantic Mobile was not a "telephone company" at any time, it was not eligible either for central valuation under § 39 or for the corporate utility exemption under G.L. c. 59, § 5, Sixteenth (1) (d.) The board stayed further action on the § 65 appeals to allow the parties to seek judicial review of its decision that Bell Atlantic Mobile is not entitled to central valuation under § 39.⁷ Bell Atlantic Mobile appealed.

We granted Bell Atlantic Mobile's application for direct appellate review, and we affirm the decision of the board.⁸

Discussion. Our review of a board decision is limited to questions of law. Towle v. Commissioner of Revenue, 397 Mass. 599, 601, 492 N.E.2d 739 (1986). See G.L. c. 58A, § 13. We will not disturb the board's findings so long as they are supported by substantial evidence and a correct application of the law. Koch v. Commissioner of Revenue, 416 Mass. 540, 555, 624 N.E.2d 91 (1993). The proper interpretation of a statute is a question of law for us to resolve. See Gray v. Commissioner of Revenue, 422 Mass. 666, 675 n. 12, 665 N.E.2d 17 (1996), quoting Massachusetts Community College Council MTAJNEA v. Labor Relations Comm'n, 402 Mass. 352, 353, 522 N.E.2d 416 (1988; ("the duty ultimately to interpret the statute rests with the court"). As the board is an agency charged with administration of the tax law, however, its interpretations of tax statutes "may be given weight by this court." Commissioner of Revenue v. McGraw-Hill, Inc., 383 Mass. 397, 401, 420 N.E.2d 293 (1981), quoting Xtra, Inc. v. Commissioner of Revenue, 380 Mass. 277, 283, 402 N.E.2d 1324 (1980).

The board made extensive findings of fact, based on substantial evidence, regarding the development and operation of wireless cellular telecommunications technology. Cellular "telephones" use radio frequencies licensed by the Federal Communications Commission (FCC) to transmit voice and data over a network of radio antennae mounted on towers and buildings. When a subscriber to "cell phone" service presses the "send" button on a handset, a radio signal is transmitted to a nearby cellular base station. The signal transmits information identifying the subscriber, the originating handset, and the number the subscriber is trying to reach. The handset must continually monitor and transmit its location so as to maintain a connection as the handset's location changes. The base station receiving the transmission sends the signal to a mobile telephone switching office (MTSO), which then transmits the call either to another cellular base station (if the recipient is also a "cell phone" subscriber) or to the copper or fiber-optic lines owned by the local telephone company or a long-distance carrier (if the recipient is a wired telephone, or "land-line," user).

The handset is powered by an internal battery; the electricity generated by the battery, however, does not leave the handset. The signal sent and received by the handset is radio frequency, not electricity. Therefore, Bell Atlantic Mobile's wireless cellular telecommunications network is classified as a commercial mobile radio service (CMRS) and regulated under G.L. c. 159, the common carrier statute. The board found that wireless cellular telecommunications technology and telephone technology developed on "parallel but distinct tracks," and that the two technologies are both conceptually and historically separate.

Neither the relevant tax statutes — G. L. c. 59, § 39 (central valuation); G.L. c 59, § 5, Sixteenth (1) (d.) (corporate utility exemption); and G.L. c. 63, § 52A (definition of "utility") — nor G.L. c. 166, which regulates "telephone and telegraph companies," provides a specific definition of "telephone company."⁹ The Legislature has, however, created a comprehensive regulatory framework governing "telephone companies" in G.L. c. 166. We therefore look to that chapter for guidance in determining whether a CMRS provider such as Bell Atlantic Mobile qualifies as a "telephone company." See FMR Corp. v. Commissioner of Revenue, 441 Mass. 810, 819, 809 N.E.2d 498 (2004), quoting Board of Educ. v. Assessor of Worcester, 368 Mass. 511, 513-514, 333 N.E.2d 450 (1975) (where "two or more statutes relate to the same subject matter, they should be construed together so as to constitute a harmonious whole consistent with the legislative purpose"). As the board concluded, most of the provisions of G.L. c. 166 are simply inapplicable to CMRS providers. For example, G.L. c. 166, §§ 1-10, concern various stock subscription and filing requirements that must be satisfied before a telephone company may "commence the construction of its line." G.L. c. 166, § 1. Section 15D concerns safety measures for telephone company employees working in areas where telephone cables are located in common trenches with energized electrical cables; §§ 21 through 42B relate to poles and wires. Sections 16 through 20 govern telegraph companies. Bell Atlantic Mobile does not own or need poles, wires, pipes, or underground conduits; it has not argued that it is a telegraph company. Although in the past Bell Atlantic Mobile and other CMRS providers filed annual returns pursuant to G.L. c. 166, § 11, Bell Atlantic Mobile has apparently not filed such a return since 1993, and there is no evidence that the Department of Public Utilities or the Department of Telecommunications and Energy¹⁰ has taken any enforcement action against Bell Atlantic Mobile, or any other CMRS, for failure to so file.

In contrast, as a CMRS provider, Bell Atlantic Mobile is regulated under G.L. c. 159, which governs common carriers. Bell Atlantic Mobile notes, correctly, that land-line telephone companies are also considered common carriers and...