Massachusetts Mut. Life Ins. Co. v. Commissioner of Corporations and Taxation

• Decision Date: 04 June 1973
• Parties: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY v. COMMISSIONER OF CORPORATIONS AND TAXATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 805

296 N.E.2d 805

363 Mass. 685

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY v. COMMISSIONER OF CORPORATIONS AND TAXATION.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 8, 1973.

Decided June 4, 1973.

Charles M. Furcolo, Asst. Atty. Gen., for the Commissioner of Corporations and Taxation.

Jerome Preston, Jr., Boston, (Peter W. Coogan, Newton Centre, and Michael J. Schubert, Springfield, with him), for Massachusetts Mutual Life Ins. Co.

Before TAURO, C.J., and REARDON, BRAUCHER, HENNESSEY and WILKINS, JJ.

WILKINS, Justice.

The plaintiff, which has undertaken an authorized urban redevelopment project in the city of Springfield (see G.L. c. 121A, § 18), seeks declaratory relief under G.L. c. 231A against the defendant Commissioner concerning the proper method of determining the excises payable by it under G.L. c. 121A, § 10, because of the existence of its project during the calendar years 1968, 1969 and 1970. The basic issue is whether in the circumstances the calculation of the plaintiff's excise for each of those years should employ the local real estate tax rate for the year in which the excise was payable, as the Commissioner asserts, or whether that calculation should employ the local real estate tax rate for the year immediately prior to the year in which the excise was payable, as the plaintiff claims.

The Commissioner appeals from a final decree declaring that the plaintiff's excises were improperly determined by him and ordering the repayment, with interest, of the amount of the excises paid by the plaintiff in excess of the amount which should have been properly assessed. At the request of the Commissioner, supported by the plaintiff, this court granted direct appellate review. G.L. c. 211A, § 10, inserted by St.1972, c. 740, § 1. ¹

The plaintiff is obliged under G.L. c. 121A, § 10, as amended through St.1969, c. 540, § 1, ² to 'pay in each calendar year to the commonwealth with respect to its corporate existence at any time within the preceding calendar year an excise . . .' computed according to a formula 'provided, that the excise payable in any year shall not be less than the amount which the city . . . would receive for taxes' based on the lesser of two alternatives. As applied to the plaintiff, for the taxable years involved, the proviso is applicable and the excise is arrived at by using the lesser of two valuations. Under both the Commissioner's and the plaintiff's theory the lesser valuation in the circumstances is the one which involves the application of a local real estate tax rate to the average of the assessed valuations of the premises on the three assessment dates next prior to acquisition of the premises by the plaintiff. ³ The dispute centers on which year's local real estate tax rate should be used. In all events, the excise must be paid on or before March 15 of the year in which it becomes payable. ⁴ Before March 15, 1969, the plaintiff filed an excise return with respect to its project for the calendar year 1968. That excise, in the amount of.$209,894, was determined on the basis of the 1968 Springfield tax rate ($54,50 per $1,000 of assessed valuation). The defendant recomputed the plaintiff's excise using the 1969 Springfield tax rate ($57.80 per $1,000 of assessed valuation) and notified the plaintiff that he had assessed its excise at $222,857.01 (including interest) and that the plaintiff owed a balance on its 1968 excise. The plaintiff paid the balance (including additional interest) under protest. Similar circumstances took place with respect to the excise payable for each of the next two calendar years (1969 and 1970), but, because the issues are the same for each year, they need not be described here, except to state that the Springfield tax rate continued to rise in 1970 and 1971.

The plaintiff, while pursuing administrative remedies, has brought this bill for declaratory relief to obtain an answer to the controversy, which is presented on facts which have been stipulated.

The Commissioner has raised four procedural objections to the granting of the declaratory relief sought by the plaintiff. None of them has merit. (1) This is an appropriate occasion in which to grant declaratory relief prior to the exhaustion of administrative remedies. The only issue is one of law. It is a novel question. It seems to be a repetitive problem and has public interest beyond the parties. Recognizing that the issue whether to grant declaratory relief, where another remedy may be available, is one of discretion, we think declaratory relief is appropriate here. Meenes v. Goldberg, 331 Mass. 688, 690--691, 122 N.E.2d 356; Madden v. State Tax Commn., 333 Mass. 734, 737, 133 N.E.2d 252; Massachusetts Assn. of Tobacco Distribs. v. State Tax Commn., 354 Mass. 85, 88, 235 N.E.2d 557. (2) There is no requirement that the plaintiff elect between its administrative remedies and this bill for declaratory relief. A taxpayer should not be compelled at its peril to abandon any available administrative remedy in order to qualify for declaratory relief under G.L. c. 231A. (3) There was no abuse of the judge's discretion in allowing the plaintiff to amend its bill to add a request for declaratory relief as to the taxable year 1970. Schertzer v. Somerville, 345 Mass. 747, 750, 189 N.E.2d 555; Alpert v. Commonwealth, 357 Mass. 306, 318, 258 N.E.2d 755. (4) The city of Springfield is not a necessary party to this proceeding for declaratory relief. G.L. c. 231A § 8. Massachusetts Assn. of Tobacco Distribs. v. State Tax Commn. 354 Mass. 85, 88, 235 N.E.2d 557; Trustees of Tufts College v. Volpe Constr. Co., Inc., 358 Mass. 331, 340, 264 N.E.2d 676. Both sides of the issue have been argued before us by the principal antagonists. Although it is financially interested, the city is not a disputant in the controversy over the interpretation of § 10. We, therefore, turn to the substantive issue between the parties.

The third paragraph of G.L. c. 121A, § 10, provides (in part) 'that the excise payable in any year shall not be less than the amount which the city or town would receive for taxes, [ADDED: at the rate for such year,] upon whichever of the following valuations is the lesser . . .' (emphasis supplied). The Commissioner argues that the words 'rate for such year' clearly and unambiguously refer to the rate for the year in which the excise is payable. The plaintiff, however, asserts that the words 'such year' refer to the calendar year with respect to which the excise is paid (i.e., the year prior to the year of payment) and that at the very least the words are ambiguous. The plaintiff argues that the position advanced by the Commissioner creates such an impractical situation that if the words 'at the rate for such year' are ambiguous, they must be read to mean the local tax rate for the year prior to the year in which the excise becomes payable.

The parties have agreed that no relevant Springfield tax rate could have been fixed until notice of the amount of State revenue to be distributed was received from the State Tax Commission (see G.L. c. 59, § 23, as amended by St.1963, c. 160, § 13, and G.L. c. 58, § 25A). ⁵ The parties have further agreed that in the applicable years the Springfield tax rate was not set until June 6, 1968; July 7, 1969; July 8, 1970; and September 8, 1971, respectively. ⁶ The plaintiff argues that the Legislature cannot have intended that on or before March 15 in each year an excise should be paid based on the local tax rate for that year, a tax rate which the plaintiff did not and could not know, because it had not yet been fixed. ⁷

These extraneous but practical considerations may not, of course, be considered by us if the relevant language of § 10 is 'clear and unambiguous' and requires the result urged by the Commissioner, '(e)ven if an injustice or a hardship were to result.' Milton v. Metropolitan Dist. Commn.,342 Mass. 222, 227, 172 N.E.2d 696, 700. Various aids to which courts turn for assistance in construing statutes become available only when the language of a statute is ambiguous. Chouinard, petitioner, 358 Mass. 780, 782, 267 N.E.2d 497. ⁸ It is our duty, however, to interpret a statute, if possible, so 'as to make it an effectual piece of legislation in harmony with common sense and sound reason.' Morrison v. Selectmen of Weymouth, 279 Mass. 486, 492, 181 N.E. 786, 789. Atlas Distrib. Co. v. Alcoholic Beverages Control Commn., 354 Mass. 408, 414, 237 N.E.2d 669.

If the applicable language of § 10 had been adopted in its present form as an integrated whole, we might conclude that the words 'at the rate for such year'- clearly and unambiguously refer to the year next previously referred to in § 10, that is, the year in which the excise is payable. We note, however, that § 10 was amended in 1956. See St.1956, c. 640, § 4. Both parties correctly agree that prior to the 1956 amendment the words 'at the rate for such year' referred to the local tax rate of the taxable year (i.e., the rate for the year prior to the year in which the excise was payable). In the 1956 amendment the words 'at the rate for such year' were not changed. The reference to a year which now appears in § 10 next before the words 'at the rate for such year' was inserted by the 1956 amendment.

We do not attribute to the Legislature an intention in the 1956 amendment to change the previous meaning of the words 'at the rate for such year.' When statutory language is reenacted, it is a principle of statutory construction that no change was intended in its meaning or scope. Commonwealth v. Welosky, 276 Mass. 398, 409, 177 N.E. 656. Although careful changes were made in references to particular years in the 1956 amendment, none was made in the words 'at the rate for such year.' ⁹

We note that the 1956 amendment changed certain assessed valuations to be used from those of the prior year (i.e., the calendar year with respect to which the...