Unquity House Corp. v. Bd. of Assessors of Milton
| Decision Date | 02 February 2023 |
| Docket Number | 21-P-883,21-P-884 |
| Parties | UNQUITY HOUSE CORPORATION v. BOARD OF ASSESSORS OF MILTON (and a companion case[1]). |
| Court | Appeals Court of Massachusetts |
Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass.App.Ct. 1017 (2020) (), are primarily directed to the parties and therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass.App.Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The taxpayers, Unquity House Corporation and Winter Valley Residences, Inc., appeal from decisions of the Appellate Tax Board (board) finding that the taxpayers were not entitled to real estate tax exemptions for fiscal year 2019 under G. L c. 59, § 5, Third (Clause Third), for property owned and occupied for charitable purposes. We affirm.
Discussion.
The taxpayers assert that, contrary to the board's determination, they are entitled to claim the Clause Third exemption because they operate as traditional public charities and their occupancy of the properties advances the public good, lessens the burden on government, and benefits a sufficiently large and fluid segment of the population.
A decision of the board "will not be modified or reversed if the decision 'is based on both substantial evidence and a correct application of the law.'" New Cingular Wireless PCS LLC v. Commissioner of Revenue, 98 Mass.App.Ct. 346, 353 (2020), quoting Genentech, Inc. v. Commissioner of Revenue, 476 Mass. 258, 261 (2017). The taxpayer carries the burden of demonstrating entitlement to an exemption. See Global Cos., LLC v. Commissioner of Revenue, 459 Mass. 492, 494 (2011); Jewish Geriatric Servs., Inc. v. Assessors of Longmeadow, 61 Mass.App.Ct. 73, 77 (2004) . Given the board's responsibility for administering the tax law and its expertise, "[w]here the board's construction of a tax statute is reasonable, we will defer to its interpretation." Oracle USA, Inc. v. Commissioner of Revenue, 487 Mass. 518, 522 (2021).
We accept the board's factual findings if they are supported by substantial evidence. West Beit Olam Cemetery Corp. v. Assessors of Wayland, 89 Mass.App.Ct. 677, 680 (2016). "Substantial evidence is 'such evidence as a reasonable mind might accept as adequate to support a conclusion.'" Id., quoting Boston Gas Co. v. Assessors of Boston, 458 Mass. 715, 721 (2011). Our application of the substantial evidence test "must take into account whatever in the record fairly detracts from its weight" (citation omitted). Cohen v. Board of Registration in Pharmacy, 350 Mass. 246, 253 (1966). "[W]e deem the evidence insufficient only where 'a contrary conclusion is not merely a possible but a necessary inference from the findings.'" Jewish Geriatric Servs., Inc., 61 Mass.App.Ct. at 76, quoting Erving Paper Mills Corp. v. Commissioner of Revenue, 49 Mass.App.Ct. 14, 17 (2000). See New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 465 (1981) ().
A taxpayer claiming exemption from property taxes under Clause Third must demonstrate that it qualifies as a charitable organization and that it occupies the property in furtherance of its charitable purpose. See New England Forestry Found., Inc. v. Assessors of Hawley, 468 Mass. 138, 150 (2014). For the purposes of Clause Third, the term "charity" is not limited to "almsgiving and assistance to the needy." New England Legal Found. v. Boston, 423 Mass. 602, 609 (1996). Charity is defined as a gift "for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government." New England Forestry Found., Inc., supra at 149-150, quoting Jackson v. Phillips, 14 Allen 539, 556 (1867).
Factors considered in determining whether an organization qualifies as a charity include, without limitation, "whether the organization provides low-cost or free services to those unable to pay, whether it charges fees for its services and how much those fees are, whether it offers its services to a large or 'fluid' group of beneficiaries and how large or fluid that group is, whether the organization provides its services to those from all segments of society and from all walks of life, and whether the organization limits its services to those who fulfil certain qualifications and how those limitations help advance the organization's charitable purposes" (citations omitted). New Habitat, Inc. v. Tax Collector of Cambridge, 451 Mass. 729, 732733 (2008). The less the organization performs traditional charitable functions, the more heavily the New Habitat factors weigh in the analysis. See New England Forestry Found., Inc., 468 Mass. at 150; New Habitat, Inc., supra at 733.
It is undisputed that the taxpayers are nonprofit corporations that rent apartments at below market rates to low income, elderly individuals, and in the case of Winter Valley, low income, elderly individuals with disabilities. The residents are all eligible for, and receive, rental subsidies from the United States Department of Housing and Urban Development (HUD). The taxpayers, however, also receive direct payments from HUD and from several municipal housing authorities.[2] All residents are required to enter into a lease agreement and to provide a security deposit. Under the leases, the taxpayers are responsible for cleaning, maintenance, and trash removal, but are not required to perform any services not typically provided by a commercial landlord. The board concluded that the taxpayers' relationship with their residents was "essentially that of landlord to tenant."
The board correctly cited Charlesbank Homes v. Boston, 218 Mass. 14, 15 (1914), for the proposition that a charitable corporation whose "object is to provide wholesome and sanitary homes for . . . people of small means at moderate cost," without more, is not exempt from property tax. In M.I.T. Student House, Inc. v. Assessors of Boston, 350 Mass. 539, 541 (1966), however, the court observed that "to provide living quarters for needy persons is a charitable purpose." More recently, this court held that "providing living space and residential assistance to individuals who are unable to manage on their own" is a traditional charitable purpose. Mary Ann Morse Healthcare Corp. v. Assessors of Framingham, 74 Mass.App.Ct. 701, 706 (2009).
The board reasoned, and we agree, that the taxpayers' entitlement to the Clause Third exemption depended on the extent to which they carried their burden of showing that they provided services to the residents beyond those typically provided by landlords. In this regard, the board found that the taxpayers had failed to show the extent to which they were present to assist with the daily living or medical needs of the residents, or the extent to which they, as opposed to government agencies or other nonprofit organizations, provided additional services and assistance.[3] Thus, the board concluded that the taxpayers "did not demonstrate that [they] regularly perform[ed] charitable services for the benefit of its residents." The board also emphasized that the residents received rental assistance not from the taxpayers, but rather from government programs.
The taxpayers contend that the board's findings are not supported by substantial evidence because the record shows that the taxpayers provided daily educational and social activities; transportation for grocery shopping, lunches, and medical...
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