VERIZON NEW ENGLAND INC.
BOARD OF ASSESSORS OF BOSTON (and a consolidated case).
Heard: April 7, 2016.
from a decision of the Appellate Tax Board. The Supreme
Judicial Court on its own initiative transferred the case
from the Appeals Court.
William Hazel for the taxpayers.
Anthony M. Ambriano for board of assessors of Boston.
Healey, Attorney General, & Daniel J. Hammond, Assistant
Attorney General, for Attorney General & another, amici
curiae, submitted a brief.
Kenneth W. Gurge, for Massachusetts Municipal Association
& others, amici curiae, submitted a brief.
Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, &
Hines, JJ. 
telephone companies appeal from a decision of the Appellate
Tax Board (board) upholding the property tax assessments by
the board of assessors of Boston (assessors) for fiscal year
(FY) 2012 on certain personal property each company owns. At
issue is whether the tax assessments, which were based on a
"split" tax rate structure determined in accordance
with G. L. c. 40, § 56 (§ 56), constituted a
disproportionate tax that, as such, violated the Constitution
of the Commonwealth. More particularly, the question is
whether the split tax rate structure authorized by § 56
-- a rate structure that provides for taxable personal
property to be taxed at a rate identical to the rate applied
to commercial and industrial real property but higher than
the rate that would apply if all taxable property, real and
personal, were taxed at a single, uniform rate -- violates
the proportionality requirement of Part II, c. 1, § 1,
art. 4, of the Constitution of the Commonwealth, as amended
by art. 112 of the Amendments to the Constitution, as well as
art. 10 of the Massachusetts Declaration of Rights. We
conclude that the split tax structure authorized by § 56
and related statutes does not violate the Massachusetts
Constitution. We affirm the board's decision.
New England Inc. (Verizon) and RCN BecoCom LLC (RCN)
(collectively, taxpayers) are subject to property tax in the
city of Boston on personal property consisting primarily of
machinery, poles, underground conduits, wires, and pipes
(§ 39 property) that they own and use for business
purposes. Pursuant to G. L. c. 59, § 39, the
Commissioner of Revenue (commissioner) is required on an
annual basis to centrally determine and certify the valuation
of this type of property owned by telephone and telegraph
companies, including the taxpayers; the commissioner's
certified central valuations then become the basis for tax
assessments by the assessors in each city and town where such
property is located and subject to taxation, including
Boston. For purposes of property tax assessments for fiscal
year 2012, the commissioner centrally valued the § 39
property owned by Verizon in Boston at $215, 846, 800, and
the § 39 property owned by RCN in Boston at $48, 444,
assessors thereafter assessed a property tax for FY 2012 on
Verizon's § 39 property at the tax rate of $31.92
per thousand dollars of value for a total assessment of $6,
889, 829.86; they assessed a FY 2012 tax on RCN's §
39 property at the same rate of $31.92 per thousand for a
total assessment of $1, 546, 361.21. The taxpayers timely
paid the personal property taxes thus assessed, and then
timely filed abatement applications with the
The requested abatements were denied, and both taxpayers
filed timely appeals with the board. On April 24, 2013, the
board consolidated the taxpayers' petitions for hearing.
On October 24, 2014, the board issued its decision denying
the taxpayers' appeals, and thereafter issued findings of
fact and a report. The taxpayers timely appealed to the
Appeals Court, and we transferred the case on our own motion.
Constitutional and statutory background.
II, c. 1, § 1, art. 4 (art. 4), of the Constitution of
the Commonwealth, as amended in 1978 by art. 112 of the
Amendments (art. 112) authorizes the Legislature
"to impose and levy proportional and reasonable
assessments, rates, and taxes, upon all the inhabitants of,
and persons resident, and estates lying, within the said
commonwealth, except that, in addition to the powers
conferred under Articles XLI and XCIX of the Amendments,
court may classify real property according to its use in no
more than four classes and to assess, rate and tax such
property differently in the classes so established, but
proportionately in the same class, and except that reasonable
exemptions may be granted" (emphasis supplied).
it was amended by art. 112, art. 4 had been consistently
interpreted by this court to require that
"all taxes levied under [the taxing authority of art. 4]
be 'proportional and reasonable, ' and [art. 4]
forbids their imposition upon one class of persons or
property at a different rate from that which is applied to
other classes, whether that discrimination is effected
directly in the assessment or indirectly through arbitrary
and unequal methods of valuation."
Cheshire v. County Comm'rs of Berkshire, 118
Mass. 386, 389 (1875). See, e.g., President, Directors,
& Co. of the Portland Bank v. Apthorp, 12
Mass. 252, 255 (1815); Oliver v. Washington
Mills, 11 Allen 268, 275 (1865); Opinion of the
Justices, 220 Mass. 613, 618-619, 621 (1915);
Opinion of the Justices, 332 Mass. 769, 778-779
(1955); Bettigole v. Assessors of Springfield, 343
Mass. 223, 230-231 (1961) .
practice, however, local municipal assessors -- to whom the
Legislature has delegated for over two centuries the power to
assess local property taxes, see Opinion of the
Justices, 378 Mass. 802, 810 & n.ll (1979) - did not
follow this constitutional mandate of strict proportionality,
or the statutory requirement that local assessment of
property taxes be based on "a fair cash valuation of all
the estate, real and personal, subject to taxation
therein." G. L. c. 59, § 38. See
Bettigole, 343 Mass. at 231-232. See also
Sudbury v. Commissioner of Corps. & Taxation,
366 Mass. 558, 563 (1974); Shoppers' World, Inc.
v. Assessors of Framingham, 348 Mass. 366, 371-372
(1965). Rather, there was a widespread practice of employing
varying percentages of fair cash values that favored
residential properties at the expense of commercial and
industrial properties. See Keniston v. Assessors of
Boston, 380 Mass. 888, 890-891 (1980);
Bettigole, supra at 227-228. Particularly
beginning in the 1960s this court more insistently declared
disproportionate assessments of property illegal and also
broadened remedies available to taxpayers bringing claims of
disproportionate taxation. See Sudbury,
supra at 568-569; Shoppers' World,
Inc., supra at 372-373 (1965);
Bettigole, supra at 236-237; Stone v.
Springfield, 341 Mass. 246, 248 (1960) . However, in the
midst of the "accelerated judicial enforcement of the
[proportionate taxation and] fair cash valuation requirement,
. . . there was public challenge to the concept of 100%
valuation" (citation omitted), Keniston, 380
Mass. at 891, and in response to this public sentiment, the
General Court approved in 1975 and again in 1977 the
constitutional amendment embodied in art. 112; the amendment
was ratified by the voters on November 7, 1978 -- by a
two-to-one margin. See Associated Indus, of Mass.,
Inc. v. Commissioner of Revenue, 378 Mass. 657,
659 (1979); Opinion of the Justices, supra
at 804. Accord Keniston, supra. Article 112
empowered the Legislature to establish a property tax system
that would impose "different rates of taxation on
different classes of real property, " Opinion of the
Justices, supra, and that in practical effect
would resemble and legitimize the long-time local practice of
establishing relatively lower property tax assessments for
residential property and vacant land or open space as
compared to other classes of property. See J_d. at 804-805.
112 permits the Legislature to establish different classes of
real property and to tax the different classes at different
rates, so long as all real property within a class is taxed
at the same rate. In anticipation of the ratification of art.
112, the Legislature enacted legislation, St. 1978, c. 580,
that, pursuant to the authority contained in the proposed
amendment, created a property tax system based on classifying
real property in four classes. In 1979, following the
amendment's ratification, the Legislature considered a
somewhat different classification system and submitted two
questions to this court concerning the constitutionality of
certain of its features. See Opinion of the
Justices, 378 Mass. at 802, 806-815. Following receipt
of our affirmative answers to its questions, the Legislature
enacted new legislation, St. 1979, c. 797, to implement art.
112, establishing a property tax structure almost identical
to that proposed. At the same time, the Legislature also
repealed the classification provisions of St. 1978, c. 580.
See St. 1979, c. 797, § 23. See also St. 1980, c. 261,
implementing legislation set out in St. 1979, c. 797, is
codified as G. L. c. 40, § 56; G. L. c. 58, § 1A;
and G. L. c. 59, § 2A, and remains in effect; the assessors
here implemented the split tax structure in place in Boston
for FY 2012 pursuant to these statutes. Under them, the commissioner
is required every three years to determine, within each city
and town in the Commonwealth, whether the locally assessed
values represent the full and fair cash valuation for each
class of real property, defined in c. 59, § 2A,  and for all
personal property not exempt from local taxation. See G. L.
c. 40, § 56; G. L. c. 58, § 1A. For every municipality that