South Street Nominee v. Bd. of Assessors

• Decision Date: 19 December 2007
• Docket Number: No. 06-P-1586.,06-P-1586.
• Parties: SOUTH STREET NOMINEE TRUST v. BOARD OF ASSESSORS OF CARLISLE.
• Court: Appeals Court of Massachusetts

878 N.E.2d 931

70 Mass. App. Ct. 853

SOUTH STREET NOMINEE TRUST v. BOARD OF ASSESSORS OF CARLISLE.

No. 06-P-1586.

Appeals Court of Massachusetts, Suffolk.

Argued October 16, 2007.

Decided December 19, 2007.

Rosemary Crowley, Springfield (David J. Martel with her) for the taxpayer.

John Richard Hucksam, Jr., Boston, for board of assessors of Carlisle.

Present: COWIN, KATZMANN, & MEADE, JJ.

MEADE, J.

South Street Nominee Trust (taxpayer) appeals from a decision of the Appellate Tax Board (board) upholding the refusal of the board of assessors of the town of Carlisle (town) to abate a withdrawal tax assessed on its land pursuant to G.L. c. 61, § 7. On appeal, the taxpayer argues that St.1981, c. 768, § 2, effective January 2, 1982 (section 2), which addresses the applicability of the amendments to G.L. c. 61 set forth in St.1981, c. 768, § 1, exempts its property from imposition of the withdrawal tax. We agree and reverse.

1. Background. The taxpayer owns four parcels of real estate (subject property) within the town. The town's assessment of a withdrawal tax on the subject property gave rise to this appeal. From January 1, 1978, until December 31, 2002, the subject property had been continuously classified as "forest land" pursuant to G.L. c. 61. During that time, the subject property was governed by three successive forest management plans, spanning the following dates: January 1, 1978, to December 31, 1982; January 1, 1983, to December 31, 1992; and January 1, 1993, to December 31, 2002.¹ By letter dated June 25, 2002, the taxpayer informed the town of its intention to withdraw the subject property from forest land classification effective January 1, 2003.² In response, the town assessed a withdrawal tax of $216,300.06 upon the subject property pursuant to G.L. c. 61, § 7. Based on its claim that section 2 exempts its property from the withdrawal tax, the taxpayer applied to the town for an abatement of the tax, which it paid under protest. Following the town's failure to act on its application, the taxpayer filed a petition with the board seeking relief from the town's refusal to abate the tax.³ The board's decision upholding the imposition of the withdrawal tax entered on December 13, 2004. The taxpayer appeals from that decision.

2. Discussion. a. Statutory scheme and history. The classification and taxation of forest land has been governed by statute for over ninety years. St.1914, c. 598. From its inception, the statute, now codified as G.L. c. 61, has enabled landowners to voluntarily apply for and receive a forest land classification for eligible property devoted to the growth of forest products, thus making land so classified subject to lower property tax rates. Since the 1969 amendments to G.L. c. 61, St.1969, c. 873, § 1, land so classified is subject to the oversight of the State forester, who monitors the use of the land to ensure the maintenance of the woodland vegetation in accordance with the forest land classification. G.L. c. 61, § 2, as amended by St.1981, c. 768, § 1. As part of this oversight, the property must be certified as being in compliance with all forest land classification requirements at the beginning of each new forest management plan. Ibid. Failure to obtain such certification results in the loss of the property's forest land classification. Ibid.

Effective January 2, 1982, G. L. c. 61 was substantially amended by chapter 768 of the Acts and Resolves of 1981. Relevant to our discussion, the 1981 amendment significantly increased the withdrawal tax. G.L. c. 61, § 7, as amended by St.1981, c. 768, § 1.⁴ The 1981 amendment also included certain provisions regarding land then currently classified under G.L. c. 61. Section 2 of chapter 768 of the Acts and Resolves of 1981 provides in relevant part:

"Section one of this act shall not apply to land classified prior to the effective date of this act until the expiration of the term of the forest management plan governing such land or until one year after the withdrawal of such land from classification, whichever period is longer. Notwithstanding the provisions of any laws to the contrary, the owner of such land, prior to the end of said period, may elect to remove such land from classification without imposition of a withdrawal tax or may elect to apply for classification of such land under the provisions of section one...."

The precise meaning of this rather enigmatic language is the crux of the parties' dispute.

b. Standard of review and rules of construction. We will leave undisturbed the board's construction of section 2 "unless it is `not supported by substantial evidence or is based on an error of law.'" Lowney v. Commissioner of Rev., 67 Mass App.Ct. 718 720, 856 N.E.2d 879 (2006), quoting from M & T Charters, Inc. v. Commissioner of Rev., 404 Mass. 137, 140, 533 N.E.2d 1359 (1989). See Lasell Village, Inc. v. Assessors of Newton, 67 Mass. App.Ct. 414, 420, 854 N.E.2d 119 (2006) (the Appellate Tax Board's decision on whether property is exempt from taxation will not be reversed if it is based on substantial evidence and a correct application of the law). We also recognize the board's expertise in tax matters, which prompts us to give its decision "some deference." Koch v. Commissioner of Rev., 416 Mass. 540, 555, 624 N.E.2d 91 (1993), quoting from McCarthy v. Commissioner of Rev., 391 Mass. 630, 632, 462 N.E.2d 1357 (1984).

"Where the language of a statute is clear and unambiguous, it is conclusive as to legislative intent." Commonwealth v. Mandell, 61 Mass.App.Ct. 526, 528, 811 N.E.2d 1045 (2004), quoting from Pyle v. School Comm. of S. Hadley, 423 Mass. 283, 285, 667 N.E.2d 869 (1996). See Okerman v. VA Software Corp., 69 Mass.App.Ct. 771, 776, 871 N.E.2d 1117 (2007). However, where, as here, the statutory language is not free of ambiguity, courts are bound to apply the "well-established principle that tax laws are to be strictly construed, and ambiguities in tax statutes are to be resolved in favor of the taxpayer." Commissioner of Rev. v. Molesworth, 408 Mass. 580, 581, 562 N.E.2d 478 (1990). See Assessors of Brookline v. Prudential Ins. Co., 310 Mass. 300, 313, 38 N.E.2d 145 (1941), quoting from Hemenway v. Milton, 217 Mass. 230, 233, 104 N.E. 362 (1914) ("Tax laws `should be construed and interpreted as far as possible so as to be susceptible of easy comprehension and not likely to become pitfalls for the unwary'"); Lowney v. Commissioner of Rev., supra at 722, 856 N.E.2d 879. In fact, "all doubts [are to be] resolved in favor of the taxpayer." Commissioner of Rev. v. AMIWoodbroke, Inc., 418 Mass. 92, 94, 634 N.E.2d 114 (1994), quoting from Dennis v. Commissioner of Corps. & Taxn., 340 Mass. 629, 631, 165 N.E.2d 893 (1960). Significantly, this court has indicated that "[t]hat principle has particular applicability, we think, to a penalty assessment." Chirillo v. Commissioner of Rev., 25 Mass.App.Ct. 98, 103, 515 N.E.2d 601 (1987). In light of these important tenets, we differ with the board's construction of section 2.

c. The statutory language. Section 2 does not readily lend itself to certain construction. Indeed, it is susceptible to multiple interpretations, each of which is not wholly unreasonable, but none of which perfectly harmonizes all of the statutory language.⁵ The key area of uncertainty is the duration of the period during which the statute allows a taxpayer to exercise a tax-exempt withdrawal of pre-1982 classified forest land. As defined by the first sentence of § 2, this period extends until the later of two possible closing dates: the expiration of the term of the forest management plan existing at the time that the 1981 amendment became effective, or one year after the withdrawal of such land from classification. The parties agree that the first of these two possible closing dates occurred on December 31, 1982. However, with respect to the second, there is considerable dispute.

The taxpayer argues that the language "until one year after the withdrawal of such land from classification" creates a right to a tax-exempt withdrawal of pre-1982 classified forest land which does not expire until exercised. The board disagreed, and interpreted the statute as permitting the taxpayer to exercise a tax-exempt withdrawal of its pre-1982 classified forest land no later than December 31, 1982, the expiration date of the taxpayer's forest management plan in existence when the 1981 amendment became effective. It held that the second sentence of section 2 required the taxpayer to choose between exercising its right of tax-exempt withdrawal prior to or at the expiration of its existing forest management plan, or waiving that right by recertifying its forest land under a new forest management plan.⁶

To reach this conclusion, the board took the actual statutory language giving the taxpayer until "one year after the withdrawal of such land from classification" and added to it the condition that such withdrawal must occur prior to the expiration of the term of the forest management plan existing at the time that the 1981 amendment became effective. The board did so on the purported basis that this implied condition reconciled the two sentences of the statute with one another and with the assumed Legislative intent. As a result, the board effectively rewrote the first sentence of section 2 to provide: "Section one of this act shall not apply to land classified prior to the effective date of this act until the expiration of the term of the forest management plan governing such land or until one year after the withdrawal of such land from classification, [provided such withdrawal occurs prior to the expiration of the term of such forest management plan], whichever is longer." We, however, are required to resist the urge to add language "to a statute that the Legislature did not put there." Commonwealth v. Clerk-Magistrate of the W. Roxbury Div. of the Dist. Ct. Dept., 439 Mass. 352, 355, 787 N.E.2d 1032 ...