WB&T Mortgage Co. v. Board of Assessors

Summary

The Massachusetts Supreme Judicial Court considered the constitutionality of Massachusetts General Laws chapter 59, § 2C, which imposes a pro forma, prorated property tax when previously tax-exempt real estate is sold to a nonexempt purchaser. The court held that the statute is facially constitutional and that its use of purchase price as a temporary valuation method is reasonable and proportional. The court affirmed the Appellate Tax Board’s decision because the taxpayer failed to prove that the assessment was disproportionate as applied.

Holdings

1. G. L. c. 59, § 2C, imposes a tax, not an excise or other governmental exaction, because it is a generally applicable revenue-raising charge credited to the municipality's general fund and is not imposed in exchange for a voluntary privilege or act.
2. G. L. c. 59, § 2C (a), is facially constitutional. The Legislature may impose a proportionate interim tax when property loses its tax-exempt status after a midyear transfer to a nonexempt purchaser.
3. In the circumstances presented, G. L. c. 59, § 2C (a), may constitutionally calculate the temporary tax using the property's purchase price and the date of sale rather than fair cash value as of January 1.
4. WB&T failed to prove that the tax imposed under G. L. c. 59, § 2C, was disproportionate or unconstitutional as applied because it offered no substantial evidence that the purchase price differed from the property's fair cash value as of January 1, 1999.

Questions Presented

1. Whether G. L. c. 59, § 2C, imposes a tax rather than an excise or other governmental exaction and therefore must comply with the Massachusetts Constitution's proportionality requirement.
2. Whether G. L. c. 59, § 2C (a), is facially unconstitutional because it imposes a temporary pro forma tax on property purchased from a tax-exempt entity using the purchase price and date of sale rather than fair cash value as of January 1.
3. Whether G. L. c. 59, § 2C (a), was unconstitutional as applied to WB&T because the purchase price allegedly exceeded the property's fair cash value as of the applicable valuation date.

Disposition

affirmed