MEMORANDUM OF DECISION AND ORDER ON PLAINTIFFS' MOTION FOR JUDGMENT ON THE PLEADINGS AND DEFENDANT'S CROSS MOTION FOR JUDGMENT ON THE PLEADINGS
DENNIS J. CURRAN, Associate Justice.
Northeastern University, the Trustees of Boston University, Wellesley College, and 131 Willow Avenue, LLC, seek judicial review under G.L.c. 30A and G.L.c. 231A, § 1, of the Massachusetts Department of Revenue's rejection of their Brownfields tax credit applications. They now move for judgment on the pleadings, arguing that the state DOR improperly denied their applications based on the unlawful use of a directive (Directive 13-4) issued by the Commissioner of Revenue. The Commissioner of Revenue cross moves for judgment on the pleadings. For the following reasons, the plaintiffs' motions for judgment on the pleadings are ALLOWED and the defendant Commissioner's cross motion for judgment on the pleadings is DENIED.
The Massachusetts Brownfields tax credit program became effective on August 5, 1998. See G.L.c. 62, § (6)(j) and G.L.c. 63, § 38Q(f). In order to receive the tax credit, the statutes require eligible taxpayers or nonprofits to commence and diligently pursue an " environmental response" action, as well as achieve and maintain a " permanent solution" or " remedy operation" status. The program provides successful applicants with a tax credit for costs they incurred, on or after August 1, 1998, to further these projects. The credit originally only applied against a credit holder's Massachusetts personal income and corporate excise tax liabilities; but the legislature has consistently and continuously extended the life of the credit through statutory amendments. The most recent of these amendments occurred in 2013, which extended the period of incurring costs to January 1, 2019, and the achievement of attaining " permanent solution" or " remedy operation" status to August 5, 2018.
In June 2006, the legislature expanded the scope of this credit to include nonprofit organizations and indeed, rendered earned credits transferable. Until 2013, the state DOR had approved applications submitted by nonprofit organizations regardless of whether their " permanent solution" or " remedy operation" statuses had been achieved before the 2006 amendment. The DOR similarly treated transfer applications.
On November 18, 2013, the state DOR formally issued Directive 13-4 to address " recent questions concerning applications for the [credit]." The directive stated that a nonprofit claimant's tax year is the calendar year in which it submitted the required " permanent solution or remedy operation status" documentation to the DOR. It further explained that nonprofit and transfer applicants may not receive or transfer credits based on documentation submitted in a taxable year that commenced before the effective date of the 2006 amendment.
131 Willow Avenue, LLC is a limited liability company that redeveloped property located at that property address in Somerville, Massachusetts in 2005 and 2006. On December 21, 2006, it filed a " response action" outcome statement confirming the completion of its environmental remediation projects on the property. On December 31, 2013, 131 Willow submitted a credit transfer application to the state DOR which rejected it based on the directive. After a conference, the Commissioner issued a letter affirming DOR's denial.
Northeastern University, Boston University and Wellesley College, all nonprofit higher education institutions in the Commonwealth, each incurred remediation costs between August 1998 and January 2006 to further projects for which they documented " permanent solutions" or " remedy operations." They submitted these before June 24, 2006, the date of the 2006 amendment. The DOR issued the directive while the universities' applications were pending. DOR rejected their applications, citing Directive 13-4. All three institutions requested conferences to further discuss the disposition of their applications. After such conferences, the Commissioner affirmed the DOR decision to deny their applications for tax credits.
I. Standard of Review
The effect of a motion for judgment on the pleadings under Mass.R.Civ.P. 12(c) is to challenge the legal sufficiency of a complaint. Welch v. Sudbury Youth Soccer Ass'n, 453 Mass. 352, 353, 901 N.E.2d 1222 (2009). " A motion for judgment on the pleadings is actually a motion to dismiss that argues that the complaint fails to state a claim upon which relief can be granted." Iannacchino v. Ford Motor Co., 451 Mass. 623, 625, n.7, 888 N.E.2d 879 (2008) (internal citations, quotations, and modifications omitted). When considering a motion to dismiss under Rule 12(b)(6), " items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account." Schaer v. Brandeis Univ., 432 Mass. 474, 477, 735 N.E.2d 373 (2000) (internal quotations and citations omitted). " [A]ll facts pleaded by the nonmoving party must be accepted as true." Jarosz v. Palmer, 436 Mass. 526, 529-30, 766 N.E.2d 482 (2002); see also Minaya v. Massachusetts Credit Union Share Ins. Corp., 392 Mass. 904, 905, 467 N.E.2d 874 (1984).
The universities and 131 Willow allege that the directive is unlawful and should not affect their tax credit and transfer applications, because the new restrictions directly contravene the plain language of the statute and indeed, DOR's own seven years' history of its interpretation. The Commissioner asks that this court defer to his interpretation of the statute. He contends that failing to do so would be irreconcilable with the statutory purpose, which is to encourage the implementation of environmentally-friendly programs, and allow taxpayers and nonprofits to benefit from programs created before the tax credit ...