Argued
June 3, 2019.
Corrected
October 4, 2019.
[132
N.E.3d 1041] APPEALS from decisions of the Appellate Tax
Board.
Donald-Bruce
Abrams (John S. Brown also present) Boston, for the taxpayer.
Kirk G.
Hanson, Assistant Attorney General, & Pierce O. Cray,
Assistant Attorney General, for Commissioner of Revenue.
Present:
Green, C.J., Vuono, & Lemire, JJ.
OPINION
GREEN,
C.J.
[132
N.E.3d 1042] These two related appeals raise questions
concerning the timeliness and scope of applications for
abatement of excise taxes filed by the Raytheon Company for
the years 2007 and 2012, respectively. In both cases,
Raytheon timely filed its return, but thereafter received
notice of a deficiency assessment
Page 73
from the Commissioner of Revenue (commissioner), and filed an
application for abatement challenging the deficiency
assessment. Raytheon timely appealed the commissioner’s
denials of the abatement applications, and, while the appeals
were pending before the Appellate Tax Board (board),
subsequent events revealed in each instance that Raytheon had
in fact overpaid the taxes owed when it filed its original
returns. Although the commissioner abated the deficiency
assessments in full while the appeals to the board were still
pending, Raytheon argued that it was due further abatements
on the theories that (a) it had overstated its income for
2007, and (b) it was entitled to recoup at once (in the form
of a tax refund) certain investment tax credits, rather than
carrying forward any credits remaining after the full
abatement of the 2012 deficiency assessment. After abating
the deficiency assessments, the commissioner moved to dismiss
Raytheon’s appeals to the board, arguing that the appeals
were untimely as to any matter other than the deficiency
assessments. The board agreed and dismissed Raytheon’s
appeals for want of jurisdiction over any amounts other than
the deficiency assessments. On appeal to this court, Raytheon
contends that the board’s dismissal was incorrect because the
deficiency assessments necessarily encompassed not only the
amounts stated in the notices of deficiency assessment but
also the amounts by which Raytheon had overpaid its taxes in
its original returns. In its appeal concerning its 2012
return, Raytheon makes an additional argument: that its
application for abatement, which referenced only the
deficiency assessment for that return, was sufficient to
preserve its rights to claim an abatement of taxes reported
in its filed return because the application for abatement was
filed within three years after Raytheon had filed its
return.[1] See G. L. c. 62C, � 37. We affirm the
decisions of the board in both cases.
1.
Factual Background .
a.
2007 return .
Raytheon
filed a corporate excise tax return for the 2007 tax year,
reporting an excise tax liability of
$7,333,762.[2] On November 15, 2011, following an
Page 74
audit, the [132 N.E.3d 1043] commissioner issued a notice of
assessment, notifying Raytheon that he had assessed it an
additional $650,752 of corporate excise tax, plus interest
and penalties, for the 2007 tax year.[3]
On
January 12, 2012, Raytheon filed an application for abatement
of the deficiency assessment. Raytheon did not, however, file
any application for abatement directed to its original 2007
tax return. The commissioner denied Raytheon’s abatement
application in full on July 31, 2013. On September 20, 2013,
Raytheon filed with the board a timely appeal from the
commissioner’s denial.
In
addition to challenging the nonincome measure of the excise
upon which the $650,752 deficiency assessment for the 2007
tax year was based, Raytheon also raised for the first time
in its appeal to the board a claim that it had overstated its
sales factor in its original 2007 return, resulting in an
overstatement of the income component of its corporate excise
for that tax year on that return. As a result of the alleged
sales factor overstatement in its 2007 tax return, Raytheon
claimed it was entitled to an additional abatement of
$5,746,575 for the 2007 tax year, to be refunded from the
taxes paid when it originally filed its return.
On
December 14, 2015, the commissioner filed a partial motion to
dismiss, moving to dismiss so much of Raytheon’s appeal to
the board as sought an abatement of portions of the tax paid
when it filed its 2007 return. The commissioner agreed that
Raytheon could use the sales factor adjustment argument as a
new legal theory to dispute the commissioner’s tangible
property deficiency assessment of $650,752 for the 2007 tax
year. However, he argued that, because Raytheon had never
applied for an abatement of the tax originally reported on
the 2007 return, any challenge to the original
self-assessment for 2007 was time barred. After the board
denied the commissioner’s motion, the commissioner abated the
deficiency assessment in full, and filed a second motion to
dismiss what remained of Raytheon’s appeal -- in other ...