WB&T Mortgage Company, Inc. v. Board of Assessors of the City of Boston (June 7, 2006)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



WB&T MORTGAGE COMPANY, INC.	v.	BOARD OF ASSESSORS OF 
THE CITY OF BOSTON

Docket No. F264697				Promulgated:
							June 7, 2006


	This is an appeal under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate a "pro forma" tax computed under G.L. c. 59, § 2C for that part of fiscal year 2000 beginning on December 17, 1999, the date of appellant's purchase of certain real estate in the City of Boston, and ending on June 30, 2000.  
	Commissioner Rose allowed the parties' request to submit this appeal to the Board for decision on an Agreed Statement of Facts and Briefs.  Chair Foley and Commissioner Egan joined Commissioner Rose in a decision for the appellee.  Commissioners Scharaffa and Gorton dissented.
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.  

	M. Robert Dushman, Esq. for the appellant.
	Laura A. Caltenco, Esq. for the appellee.  

FINDINGS OF FACT AND REPORT
The parties submitted this appeal to the Appellate Tax Board ("Board") for decision on an Agreed Statement of Facts with attached exhibits ("Agreed Statement") and Briefs.  On the basis of the Agreed Statement, the Board finds the following facts.
On December 17, 1999, appellant WB&T Mortgage Company, Inc. ("WB&T") purchased two parcels of real estate at 49-57 Franklin Street, Boston ("subject parcels").  The subject parcels are adjacent to WB&T's place of business at 63 Franklin Street.  The seller was the Roman Catholic Archdiocese of Boston, which was not subject to real estate tax on the parcels.  The total sale price for the parcels was $4,500,000.
Nearly two years later, on November 21, 2001, the appellee Board of Assessors of the City of Boston ("assessors") issued to WB&T a tax bill pursuant to G.L. c. 59, § 2C in the amount of $82,861.11 (the "§ 2C tax").  The § 2C tax was based on the sale price of $4,500,000, a tax rate of $34.21 per thousand and, according to the "pro forma" tax bill attached to the Agreed Statement, a total of 197 days in the fiscal year during which WB&T owned the property.  The tax was computed by applying the rate to the sale price and multiplying the result by the ratio of total days that WB&T owned the real estate in fiscal year 2000 (197) to total days in the fiscal year (366).  
WB&T paid the tax on December 20, 2001 with no interest.  On December 21, 2001, WB&T applied for an abatement, which was deemed denied on March 21, 2002.  The present appeal was filed with the Board on June 21, 2002.  Accordingly, the Board has jurisdiction to hear and decide this appeal.
WB&T's sole argument in support of its claim for an abatement is that the § 2C tax imposes a disproportionate, discriminatory, and therefore, unconstitutional tax on purchasers of property from tax-exempt entities.  WB&T maintains that the § 2C tax imposed on purchasers of real estate from tax-exempt entities differs from the general property tax assessed on all other property owners in two respects.  First, the § 2C tax is based on purchase price, unlike the general property tax, which is based on the property's fair cash value.  Second, real estate is valued for general property tax purposes as of January 1 of the year preceding the relevant fiscal year, while the date of purchase is the relevant date for purposes of the § 2C tax.  WB&T argues that the disparate treatment of purchasers of property from tax-exempt entities results in unconstitutional disproportionate taxation, necessitating a full abatement of the § 2C tax it paid.
In response, the assessors maintain that using the purchase price as a basis for the § 2C tax is a reasonable method to tax property which was, prior to its sale, exempt from real estate tax.  Because exempt property is not part of the triennial revaluation process or the subject of pre-assessment information requests pursuant to G.L. c. 59, § 38D, the assessors argue that they lack current and reliable information on which to base valuation determinations for property transferred from tax-exempt entities.  Accordingly, the assessors argue that using the purchase price as the basis for the § 2C tax is a rational and reasonable, and therefore constitutional, method for the Legislature to use for taxing property owned for part of a fiscal year by non-exempt entities that would otherwise escape taxation entirely because the property was owned by a tax-exempt entity on the January 1 assessment date.
In its resolution of the contested issue raised in this appeal, the Board is limited to the evidence before it.  WB&T notes that for the fiscal year following the year at issue, the assessors valued the subject parcels as of January 1, 2000 at a total of $3,281,600.  Accordingly, the fiscal year 2001 real estate tax was based on a value for the parcels of $3,281,600, compared to the $4,500,000 purchase price on which the assessors based the § 2C tax for fiscal year 2000.  WB&T therefore maintains that the disparity between the purchase price and the fiscal year 2001 assessed value means that the purchase price is "presumably likewise substantially higher than the fair cash value on the preceding January 1, 1999."  (appellant's Trial Memorandum, p. 6).  
However, WB&T offered no evidence and made no attempt to establish the fair cash value of the subject parcels as of January 1, 1999.  The only facts bearing on the fair cash value of the parcels as of January 1, 1999 that have been proven in this appeal are: 1) the parcels were purchased within a year of the relevant valuation date; 2) by an abutter; 3) for $4,500,000; and 4) the purchase price exceeded the assessed value for the following year.  For the following reasons, this evidence does not constitute substantial evidence upon which the Board could make a determination of the subject parcels' fair cash value as of January 1, 1999.
WB&T offered no meaningful evidence concerning the subject parcels' description or whether any buildings or improvements on the parcels remained unchanged between January 1, 1999 and January 1, 2000.  It also offered no evidence of market conditions at any time during the relevant period for purposes of adjusting either the purchase price or the fiscal year 2001 assessed value to determine the fair cash value of the parcels as of January 1, 1999.  
Further, WB&T offered no evidence concerning the circumstances of its purchase of the subject parcels.  There was no evidence of whether the parcels were marketed to other potential purchasers or whether WB&T paid in excess of fair market value because the parcels had a unique value to it as the owner of abutting property.  Accordingly, the Board can make no finding of fact either that the purchase price was a meaningful indicator of the parcels' fair cash value for the fiscal year at issue or that it was not.  
Given the minimal and contradictory evidence of record, the Board found and ruled that there was no substantial evidence of the subject parcels' fair cash value as of January 1, 1999.  Accordingly, the Board ruled that WB&T failed to prove a necessary factual predicate to its constitutional argument: because WB&T failed to prove that the purchase price upon which the § 2C tax was based exceeded the parcels' fair cash value as of January 1, 1999, it did not establish that the § 2C tax imposed on it was disproportionate.
On the basis of the foregoing, and for the reasons detailed in the following Opinion, the Board found and ruled that § 2C is not unconstitutional on its face but that it would be unconstitutional as applied if the purchase price on which the § 2C tax is based exceeded the fair cash value of the property as of the relevant assessment date. However, the Board ruled that WB&T failed to meet its burden of proving that § 2C is unconstitutional as applied to it because it failed to produce substantial evidence of fair cash value for the property as of January 1, 1999.  Accordingly, the Board issued a decision for the appellee in this appeal.

OPINION
I.	STATUTORY LANGUAGE 
Under G.L. c. 59, § 2C, when an entity whose real estate is exempt from property tax sells such real estate after January 1 in any year, the purchaser must pay:
a pro rata amount or amounts . . . in lieu of taxes that would have been due for the applicable fiscal year under this chapter if the real estate had been so owned on January first of the year of sale and, with respect to a sale between January first and June thirtieth, if the real estate had been so owned on January first of the year of sale and the preceding year.

	In the present appeal, the sale took place on December 17, 1999.  Accordingly, the § 2C tax was imposed on WB&T in lieu of the tax that would have been due if it were the owner of the property on January 1 of the year of sale, 1999.  The January 1 ownership date is significant because: "Taxes on real estate shall be assessed, in the town where it lies, to the person who is the owner on January first."  G.L. c. 59, § 11.  By virtue of § 2C, WB&T is treated as the assessed owner of the property for the fiscal year following January 1, 1999, fiscal year 2000, which begins July 1, 1999 and ends June 30, 2000.  See G.L. c. 44, § 56 ("[t]he fiscal year of all towns of the commonwealth shall begin with July first and end with the following June thirtieth.").
	Because the sale did not take place between January 1 and June 30, WB&T's § 2C tax was calculated under § 2C(a) which provides:  
The pro rata amounts payable to the city or town shall be determined as follows:

(a) A portion of a pro forma tax for the fiscal year in which such sale occurred allocable on a pro rata basis to the days remaining in such fiscal year from the date of sale to the end of the fiscal year.

WB&T does not challenge the assessors' use of 197 days as the number of days remaining in the fiscal year after the date of sale, or the overall computation of the § 2C tax, which was "computed by applying the tax rate . . . to the sale price."  G.L. c. 59, § 2C.  Rather, WB&T argues that the § 2C tax violates the Massachusetts Constitution because it bases the tax on sale price, and not fair cash value, and because the "relevant assessment" date is the date of sale rather than the January 1 preceding the relevant fiscal year.
STANDARD APPLICABLE TO BOARD'S CONSIDERATION OF CONSTITUTIONAL CLAIMS

	In numerous cases, the Supreme Judicial Court has affirmed the Board's authority to rule on constitutional claims in determining the legality of tax assessments.  See, e.g. Mullins v. Commissioner of Revenue, ATB Findings of Fact and Reports 1997-973, aff'd, 428 Mass. 406 (1998); Gillette Co. v. Commissioner of Revenue,  ATB Findings of Fact and Reports 1996-362, aff'd, 425 Mass. 670 (1997); Lonstein v. Commissioner of Revenue, ATB Findings of Fact and Reports 1988-355, aff'd, 406 Mass. 92 (1989); Tregor v. Assessors of Boston, ATB Findings of Fact and Reports 1978-203, aff'd, 377 Mass. 602 (1979) ("Tregor").
	In fact, a taxpayer must raise a constitutional claim with the Board to preserve the right to appellate consideration of the issue.  New Bedford Gas & Electric Light Co. v. Assessors of Dartmouth, 368 Mass. 745, 752 (1975) ("To raise a constitutional question on appeal to this court from the board, the taxpayer must present the question to the board and, in so doing, make a proper record on appeal.  Otherwise, the taxpayer waives the right to press the constitutional argument.").  Further, a denial of the right of a taxpayer to challenge a disproportionate assessment at the Board "would present a serious constitutional question because the Massachusetts Constitution requires that property be taxed proportionately."  Assessors of Danvers v. Tenneco, Inc. 388 Mass. 739, 741 (1983).  Accordingly, the Board has jurisdiction to determine whether the § 2C tax assessed to WB&T is unconstitutional and, if so, to provide a remedy by granting an appropriate abatement.  See, e.g., Shoppers' World, Inc. v. Assessors of Framingham, 348 Mass. 366 (1965) ("Shoppers' World").
In determining whether the § 2C tax is unconstitutional, the Board's analysis must be guided by the principle that: "A tax measure is presumed valid and is entitled to the benefit of any constitutional doubt, and the burden of proving its invalidity falls on those who challenge the measure." Opinion of the Justices, 425 Mass. 1201, 1203-1204 (1997) (quoting Daley v. State Tax Commission, 376 Mass. 861, 865-66 (1978)); see also Andover Savings Bank v. Commissioner of Revenue, 387 Mass. 229, 235 (1982).  Accordingly, the following analysis proceeds from the presumption that § 2C is valid and that any doubts concerning its interpretation must be resolved in favor of an interpretation that renders it constitutional.
III.	SECTION 2C IMPOSES A TAX
The parties agree that § 2C imposes a property tax, as opposed to an excise or other governmental exaction, and their constitutional analyses proceed from that premise.  However, the Board is not bound by that agreement and must determine whether the payment under § 2C is a tax, which, as will be detailed in Section IV(A) below, must be "proportional" under Massachusetts Constitution, Part II, c. 1, § 1, art. 4.  
A "tax" is a "revenue-raising exaction imposed through generally applicable rates to defray public expense."  Opinion of the Justices, 393 Mass. 1209, 1216 (1984), citing P. Nichols, Taxation in Massachusetts 3-4, 15 (3rd ed. 1938).  The cited sections of Nichols analyze late nineteenth and early twentieth century case law, which provides that in order to be a "tax," an exaction must consist of:
1.	an enforced contribution of money or other property;
2.	assessed in accordance with some reasonable rule of apportionment;
3.	by authority of a sovereign state;
4.	on persons or property within its jurisdiction;
5.	for the purpose of defraying the public expense.

Section 2C uses the phrases "a pro rata amount . . . in lieu of taxes" and also a "pro forma tax" to describe the required payment by a purchaser of previously tax-exempt property.  To determine whether the § 2C exaction is a tax, "we look to the proposed operation of the exaction."  German v. Commonwealth, 410 Mass. 445, 448 (1991). When the characterization of a monetary exaction by the government is in doubt, "the intention of the Legislature, as it may be expressed in part through its characterization . . . deserves judicial respect, and especially so where the constitutionality of the exaction depends on its proper characterization."  Associated Industries of Massachusetts, Inc. v. Commissioner of Revenue, 378 Mass. 657, 667-68 (1979).  "Ultimately, however, the nature of a monetary exaction 'must be determined by its operation rather than its specially descriptive phrase.'"  Emerson College v. Boston, 391 Mass. 415, 424 (1984) ("Emerson College") (quoting Thomson Elec. Welding Co. v. Commonwealth, 275 Mass. 426, 429 (1931)).
For example, although the exaction at issue in Emerson College was described in the statute as a "fee," the court held that the charge was a tax and, because the tax was not proportional, it violated Part II, c. 1, § 1, art. 4 of the Massachusetts Constitution. Id. at 418, 428.  The court noted in particular that, unlike a fee which is generally used to meet expenses incurred for a particular service, amounts collected under the statute were added to the general fund, and unlike an excise, which is based on a voluntary act of the person taxed in enjoying a privilege, the exaction constituted an "absolute and unavoidable demand" on certain property owners.  Id. 427-28.   
Accordingly, in analyzing whether § 2C imposes a tax, which must be proportional to be constitutional, or some other charge which need not be proportional, the Board must give respect to the legislative characterization of the exaction as "in lieu of tax" and a "pro forma tax," but ultimately must look to the operation of § 2C to determine the nature of the charge.  
First, under § 2C, "sums received under this section . . . shall be credited to the general fund of the city or town."  The fact that revenue obtained from a government charge is not used for a particular purpose but is destined for the general fund "while not decisive, is of weight in indicating that the charge is a tax."  Id. at 427.  Also, under § 2C, there appears to be no "voluntary act" or "privilege" for which an excise could be charged.  See Emerson College, 391 Mass. at 428 ("The mere right to hold and own . . . property cannot be made the subject of an excise."). 
Rather, the amount charged under § 2C is in substantially all respects identical to the general property tax:  § 2C refers to the amount charged to the purchaser as "in lieu of taxes that would have been due" if the real estate had been owned by the taxable purchaser on January 1; the tax rate is the same as the rate charged for similarly classified real estate in the municipality; any exemptions from the general property tax to which the grantee would otherwise be entitled are allowed in computing the § 2C tax; the due date of the § 2C tax is the later of thirty days from the bill or the due date of the general real estate tax bills in the municipality; interest is due on late payments of the § 2C tax pursuant to G.L. c. 59, § 57, the same provision under which interest is incurred for late payment of real estate tax bills; and the collector of taxes of the municipality in which the real estate is located has the same collection mechanisms under G.L. c. 60 that are available for collecting unpaid real estate tax.  Accordingly, the Board rules that the amounts charged under § 2C are meant to replicate the general property tax for non-exempt purchasers who owned property for part of a fiscal year but who would otherwise escape tax for that year because exempt entities owned the property as of the January 1 assessment date.  
Further, although § 2C uses the phrase "in lieu of taxes," the § 2C exaction is not the typical contractual "in lieu of tax" payment which an entity voluntarily agrees to pay in exchange for some benefit from the municipality.  For example, in Anderson Street Associates v. City of Boston, 442 Mass. 812 (2004), plaintiff argued that its payments in lieu of taxes under a contract with the city under G.L. c. 121A exceeded the amount of real estate tax which it would have to pay under G.L. c. 59 and that, therefore, its payments in lieu of tax were disproportional and unconstitutional.  The court rejected this claim because:
the money owed under G.L. c. 121A, § 6A is not a tax; rather it is a contractually agreed upon amount in lieu of taxes.  Moreover . . . because plaintiffs voluntarily contracted to make additional payments under § 6A, they have no basis for arguing that the clear contractual terms of the § 6A contracts cannot be enforced. 

Id. at 820.  See also Town of Saugus v. Refuse Energy Systems Company, 388 Mass. 822, 829 n. 9 ("If the town wished to ensure a minimum payment from the company, it could have made an arrangement with the company for a contribution in lieu of taxes to defray some of the expense its facility might impose on the town").  
	There is nothing voluntary or contractual about the exaction due under § 2C.  It is imposed on all purchasers of tax-exempt property and is in operation and effect a property tax on non-exempt owners for that part of a fiscal year during which they owned the property.  Accordingly, for all of the foregoing reasons, the Board ruled that § 2C imposes a tax.  
IV.	CONSTITUTIONAL ANALYSIS
A.	PROPERTY TAX MUST BE PROPORTIONAL
The significance of the distinction between a property "tax" and other governmental exactions is that the Massachusetts Constitution requires that property taxes must be "proportional."  See Massachusetts Constitution, Part II, c. 1, § 1, art. 4, which provides, in pertinent part:
full power and authority are hereby given and granted to said general court . . . to impose and levy proportional and reasonable assessments, rates, and taxes, upon all the inhabitants of, and persons resident, and estates lying, within said commonwealth. [emphasis added].

See also Opinion of the Justices, 220 Mass. 613 (1915) ("A general property tax, in order to be proportional, must be divided so that the amount to be raised shall be shared by the taxpayers according to the taxable real and personal estate of each . . . On the other hand an excise . . . is of a different character.  It need not be based on any rule of proportion.  It must only be 'reasonable.'")
	Further, Article 10 of the Massachusetts Declaration of Rights provides that:
Each individual of the society has a right to be protected by it in the enjoyment of his life, liberty, and property according to standing laws.  He is obliged, consequently, to contribute his share to the expense of this protection. [emphasis added].

	"It is well settled that the words 'his share' in art. 10 of the Declaration of Rights 'forbid the imposition upon one taxpayer of a burden relatively greater or relatively less than that imposed upon other taxpayers."  Bettigole v. Assessors of Springfield, 343 Mass. 223, 230 (1961) ("Bettigole") (quoting Opinion of Justices, 332 Mass. 769, 777 (1955)).  The "rule of proportionality" embodied in the above-cited constitutional provisions "was designed so that 'each tax-payer should be obliged to bear only such part of the general burden as the property owned by him bore to the whole sum to be raised.'"  Keniston v. Assessors of Boston, 380 Mass 888, 895 (1980) ("Keniston") (quoting Brookline v. County Comm'rs of the County of Norfolk, 367 Mass. 345, 350 (1975)).  In mathematical terms, 
The precise fractions which must be equivalent to satisfy the constitutional proportionality requirement were set forth in Opinion of the Justices, 220 Mass. 613, 621 (1915):  "[A] tax is proportional, within the meaning of the Constitution, only when it bears the same ratio to the whole sum raised by taxation as the taxpayer's taxable estate bears to the whole taxable estate of the Commonwealth.

Keniston, 380 Mass. at 896-97.  
	It has long been recognized, however, that "practically it is impossible to secure exact equality or proportion in the imposition of taxes."  Cheshire v. County Commissioners of Berkshire, 118 Mass. 386, 389 (1875) ("Cheshire").  Rather, the Constitution requires "equality by approximation."  Keniston, 380 Mass. at 896-97.  Equality of approximation in assessing property tax is achieved by assessing all taxable property at its "fair cash valuation" pursuant to G.L. c. 59, § 38.  See Bettigole, 343 Mass. at 231.  Where, however, 
"one or a few of a class of taxpayers are assessed at 100 per cent of the value of their property, in accord with a constitutional or statutory requirement, and the rest of the class are intentionally assessed at a much lower percentage . . . the right of the taxpayer whose property alone is taxed at 100 per cent of its true value is to have his assessment reduced to the percentage of that value at which others are taxed even though this is a departure from the requirement of statute.  The conclusion is based on the principle that where it is impossible to secure both the standard of true value, and the uniformity and equality required by law, the latter requirement is to be preferred as the just and ultimate purpose of the law."

Shoppers' World, 348 Mass. at 372-73 (quoting Sioux City Bridge Co. v. Dakota County, Nebraska, 260 U.S. 441, 446 (1922)).
	Shoppers' World established the right of a taxpayer to an abatement remedy for a disproportionate tax assessment if the taxpayer could prove "an intentional policy or scheme . . . of valuing properties or classes of property at a lower percentage of fair cash value than that percentage in fact applied to the taxpayer's own property."  Id. at 377.  Accordingly, most of the cases "applying the rule of the Shoppers' World case have focused on the issue whether there was a sufficient showing of disproportionate assessment."  Tregor, 377 Mass. at 608.  Taxpayers seeking to establish disproportionate assessment bear the burden of proving that the assessors employed a "deliberate scheme" of disproportionate and discriminatory assessment whereby they "systematically" assessed properties or a class of properties at a lower percentage of fair cash value than the percentage applied to the taxpayer's property.  Stilson v. Assessors of Gloucester, 385 Mass. 724, 727-28 (1982).  
	Shoppers' World and the cases which followed it "represented the Supreme Judicial Court's attempt to fashion an appropriate remedy for a problem with which it and numerous courts in other jurisdictions had confronted for many years: the deliberate practice by assessors of a city or town of assessing different classes of real estate at widely differing percentages of fair cash value."  Brown v. Assessors of Brookline, Mass. A.T.B. Findings of Fact and Reports 1996-1, 15, aff'd, 43 Mass.App.Ct. 327 (1997).  The problem has largely disappeared with the ratification of Article 112 of the Amendments to the Massachusetts Constitution allowing municipalities to classify real property according to use and to assess different classes of property at different rates, together with ensuing statutes which attempted to establish an "orderly transition to revaluation at full and fair cash value" throughout the Commonwealth.  Id. at 15-18; Keniston, 380 Mass. at 899.
	The issue of disproportion raised in the present appeal is not dependant on any "deliberate" or "intentional scheme" by the assessors to illegally assess property in a disproportionate manner.  There is no allegation that the assessors improperly or illegally applied the statutory formula set out in § 2C or that they valued the property for fiscal year 2001, the year following the fiscal year for which the § 2C tax was imposed, at anything other than full and fair cash value.  Rather, the issue raised in this appeal is whether the § 2C tax assessed to WB&T for fiscal year 2000 is a disproportionate tax because it, unlike the property tax assessed to all owners other than purchasers from tax-exempt entities, is measured by the purchase price of the property and not by its fair cash value.  Accordingly, it is not necessary to determine whether the assessors engaged in an intentional or deliberate scheme of illegal assessment if the assessors' imposition of the § 2C tax according to its terms results in a disproportionate tax.
	Statutes which imposed a property tax on owners of certain property based on a measure other than fair cash value, while all other property owners are assessed a tax based on their property's fair cash value, have been declared unconstitutional as violating the "proportional" requirement of c. 1, § 1, art. 4 of the Massachusetts Constitution.  In Cheshire v. County Commissioners of Berkshire, 118 Mass. 386 (1875) ("Cheshire"), the statute at issue required that reservoirs, dams, and underlying land used to maintain a water supply for mill power be assessed "at a valuation not exceeding a fair valuation of land of like quality in the immediate vicinity," rather than at its fair cash value.  Id. at 388.  Noting that the statute required a valuation of land used for a mill's water power "which excludes all increase of value by reason of the improvements or additions made thereon for the construction and maintenance of the reservoir, however valuable or costly," the court held that "the practical operation of this statute . . . is directly and necessarily to produce disproportion."  Id. at 389.  See also Opinion of the Justices, 220 Mass. 613 (1915) (statute which imposed a tax on certain property based on a multiple of its net income, rather than on its fair cash value, violated the constitutional proportional requirement);  Opinion of the Justices, 208 Mass. 616 (1911) (statute requiring uniform rate of tax for all personal property in the Commonwealth, while real estate remained taxable at rates varying by municipalities, unconstitutional as disproportionate tax); Opinion of the Justices, 195 Mass. 607 (1908) (statute imposing uniform rate of tax for money, debts, bonds and stocks unconstitutional as disproportionate tax).
	Under § 2C, a certain class of property, real estate purchased from a tax-exempt entity, is subjected to a tax based on purchase price, not on fair cash value.  Although the purchase price of property sold at a time proximate to the relevant valuation date is generally the best evidence of fair cash value, it is not always determinative of fair cash value. See, e.g., Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 449-50 (1986) (Board entitled to disregard sale price negatively affected by below-market lease); Donlon v. Assessors of Holliston, 389 Mass. 848, 857 (1983) (foreclosure sale of little relevance because not voluntary or at arm's length); Foxboro Associates v. Assessors of Foxborough, 385 Mass. 679, 682 (1982) (Board need not consider price stated on deed where it was decided solely by seller and no agreement between buyer and seller as to portion of sale price allocated to subject property).  In particular, a sale to an abutter may not represent fair cash value because the property may not have been exposed to the market for a sufficient period or the price may have been influenced by considerations unique to the purchaser.  See Bainbridge Realty Trust v. Assessors of Chilmark, ATB Findings of Fact and Report 2003-93, 101.  
The facts that WB&T owned adjacent property at the time that it purchased the subject parcels, and that the assessors' valuation of the property, as of just two weeks after the sale, at over $1.2 million less than the purchase price, suggest that the purchase price may not represent fair cash value as of the preceding January 1.  The City does not argue otherwise; rather, it maintains that the Legislature used purchase price, rather than fair cash value, as the measure of the § 2C tax because it recognized that assessors would not have current information, from the triennial valuation process or G.L. c. 59, § 38D information requests, with which to determine fair cash value.  Therefore, the City maintains, it was "rational and reasonable" for the Legislature to use sale price as the measure of the § 2C tax.  
	The Supreme Judicial Court has recognized that "administrative convenience" and "practicality" may limit an abatement remedy for disproportionate assessment.  In rejecting a taxpayer's constitutional challenge to the "interim" abatement remedy for disproportionate assessments provided by G.L. c. 58A, § 14, which required the Board to calculate an "equalized tax rate" for each fiscal year based on Department of Revenue biennial calculations of each municipality's total fair cash value, the court stated:
We recognize that in order to ensure precise proportionality the Legislature would have to have provided for a determination of the fair cash value of the town on the assessment date for the fiscal year in question, in this case January 1, 1979.  But the Legislature has provided for such determinations only in even-numbered years. . . . In light of the difficulty of making a determination of the fair cash value of a town, see Keniston v. Assessors of Boston, supra at 901, the Legislature could rationally determine that administrative convenience requires that the Department of Revenue make such determinations only in alternate years, and that practicality does not permit burdening the Appellate Tax Board with making fair cash value determinations for years in which the Department of Revenue does not.

Axelrod v. Assessors of Boxborough, 392 Mass. 460, 463-64 (1984).  
	However, the assessors' "administrative convenience" argument in the present appeal is undercut by the absence of any time limit within which the assessors must assess the § 2C tax and the fact that there has been no showing of undue burden on the assessors to determine the fair cash value of property.  For example, if the § 2C tax had to be assessed within a certain time of the sale or by a date which would make it impractical or burdensome for the assessors to gather information on which to base a fair cash value determination, the assessors' argument might have force.  As it is, however, there is no time limit for assessment of the § 2C tax and the City's Tax Collector waited nearly two years, from the December 17, 1999 sale to the November 21, 2001 § 2C tax bill, to issue a bill for the § 2C tax.  In fact, the § 2C tax bill was sent after the assessors determined the fair cash value of the subject property, and WB&T was assessed and billed, for the subsequent fiscal year's general real estate tax.  Given the lack of urgency in billing the § 2C tax, the disproportion which would result from the imposition of a tax based on a purchase price which exceeds fair cash value, and the assessors' familiarity with their role of determining the fair cash values of property on a yearly basis, substituting purchase price for fair cash value is not justified by "administrative convenience." 
When purchase price exceeds fair cash value as of the relevant assessment date, applying the formula for determining whether a tax is proportional compels the conclusion that the § 2C tax is disproportionate.  See Keniston, 380 Mass. at 896-97 (a tax is proportional, within the meaning of the Constitution, only when it bears the same ratio to the whole sum raised by taxation as the taxpayer's taxable estate bears to the whole taxable estate of the Commonwealth).  Where the purchase price of the property exceeds its fair cash value and the total taxes raised in any municipality is based on fair cash value, the ratio of the purchaser's tax to the "whole sum raised by taxation" will exceed the ratio of its taxable estate to the whole taxable estate.  Accordingly, where the purchase price of property purchased from a tax-exempt entity during a fiscal year exceeds its fair cash value as of the January 1 preceding the fiscal year for which the § 2C tax is assessed, the § 2C tax is disproportionate and unconstitutional.  The issue remains, however, whether WB&T has met its burden of proving that the § 2C tax is unconstitutional. See, e.g., Opinion of the Justices, 425 Mass. at 1203-04.
B.	FACIAL OR AS-APPLIED CONSTITUTIONAL CHALLENGE

	WB&T does not characterize its constitutional challenge to § 2C as either a "facial" or an "as-applied" challenge.  However, given its choice to proceed in this appeal without introducing evidence of the subject parcels' fair cash value and its generalized assertions concerning the effect of a § 2C tax in circumstances not present in this appeal, WB&T's argument most closely resembles a facial constitutional challenge to § 2C.  However, as the following sections detail, WB&T's constitutional challenge fails, regardless of how it is characterized.
	1.	FACIAL CHALLENGE
A facial challenge to the constitutional validity of a statute is the "weakest form of challenge, and the one that is the least likely to succeed."  Blixt v. Blixt, 437 Mass. 649, 652 (2002), citing United States v. Salerno, 481 U.S. 739 (1987) ("Salerno").  In Salerno, the Court ruled that:

A facial challenge to a legislative Act is, of course, the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid.  The fact that the . . .  Act might operate unconstitutionally under some conceivable set of circumstances is insufficient to render it wholly invalid.

Id. at 745 (emphasis added).  
	
	In deciding a claim that a statute is facially unconstitutional, courts "'grant all rational presumptions in favor of the constitutionality of a legislative enactment'" and the "positing of theoretically possible unreasonable scenarios are insufficient to make the Act" unconstitutional.  Route One Liquors, Inc. v. Secretary of Administration and Finance, 439 Mass. 111, 118 (2003) ("Route One Liquors"), quoting Kienzler v. Dalkon Shield Claimants Trust, 426 Mass. 87, 89 (1997).  If the statute in question "may reasonably be applied in ways that do not violate constitutional safeguards, then we must indulge that presumption and find that the . . . provisions escape a facial constitutional challenge."  Route One Liquors, 439 Mass. at  117-18.  
	Similarly, courts apply this same standard to determine whether a regulation is facially invalid. See Purity Supreme, Inc. v. Attorney General, 380 Mass. 762, 776 (1980)(court "bound to test" regulations by same standard applicable to statutes and "must apply all rational presumptions in favor" of validity). Under this standard, "plaintiffs must show not that the regulation is [unlawful in some circumstances], but rather that the regulation could never be applied" in a lawful manner.  Dowell v. Commissioner of Transitional Assistance, 424 Mass. 610, 615 (1997).
	In contrast to a facially unconstitutional act, where "no set of circumstances exist under which the Act would be valid," (Salerno, 481 U.S. at 745), courts have long recognized that a "statute may be constitutional as applied to some states of facts and violative of rights secured by fundamental law as applied to other states of facts."  Magee v. Commissioner of Corporations & Taxation, 256 Mass. 512, 518 (1926); see also, Bowe v. Secretary of the Commonwealth, 320 Mass. 230, 246 (1946).  Where a statute is unconstitutional "as applied" to certain facts, the statute itself is not invalid; rather, it is "left for full force as to all subjects which it may constitutionally govern."  Thurman v. Chicago, M. & St. P. Ry. Co.,  254 Mass. 569, 575 (1926).  
	In Macioci v. Commissioner of Revenue, 386 Mass. 752 (1982) ("Macioci"), taxpayers challenged guidelines used by the Commissioner to determine whether the City of Fitchburg should be certified as valuing property at full and fair cash value.  The lower court found that "the guidelines, 'on their face, permit an unconstitutional degree of undervaluation of specific classes of property.'"  Id. at 762.   The lower court ruled, however, that:
since the guidelines do not prescribe improper assessment, [the court] would have to turn to what the Commissioner actually did pursuant to her guidelines . . . if she required full and fair cash valuation pursuant to a rational scheme before certifying Fitchburg, the "plaintiffs cannot be heard to complain that the guidelines, as written, could conceivably allow improper assessment practices."  

Id. at 763 (quoting lower court's decision).  The Supreme Judicial Court upheld the lower court's ruling that the guidelines, although permitting an unconstitutional undervaluation of specific classes of property, were not void on their face:
The Commissioner, through her guidelines, informed the city of assessment limits which were acceptable to her.  These limits were illegal as to the land classification.  This declaration is not, however, dispositive of this case.  Since the disputed guidelines were merely an aid to cities and to the Commissioner to facilitate assessment at full and fair cash value, that they may have allowed for illegal results does not end the matter.  Rather, we must turn to the validity of the Commissioner's certification procedures, as applied, to determine whether the plaintiffs in this case were injured.


Id. at 763.  

In the present case, the § 2C tax is based on a measure other than fair cash value.  Although § 2C "on its face" permits a disproportionate tax when purchase price exceeds fair cash value, there are also circumstances where the § 2C tax will be constitutional, i.e. when purchase price represents the fair cash value of the property on the assessment date preceding the date of purchase.  In fact, the purchase price of the property at issue is generally the most persuasive evidence of value: "Actual sales are, of course, very strong evidence of fair market value, for they represent what a buyer has been willing to pay to a seller for a particular property."  New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 469 (1981) ("New Boston Garden") (quoting First National Store, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971)).  
Further, WB&T's argument that the § 2C tax is unconstitutional because it is based on the date of sale, not the January 1 assessment date applicable to the general property tax, is of no moment because the sale price is evidence of the value as of the January 1 assessment date, not merely as of the date of sale.  Even in cases where the sale is significantly more remote from the valuation date than the ten months present in this appeal, the Board, as the trier of fact, is given wide latitude in determining whether purchase price is the best evidence of value as of the relevant valuation date. See Ramacorti v. Boston Redevelopment Authority, 341 Mass. 377, 380 (within trial court's discretion to rely on sale of subject two years and seven months prior to valuation date); Brush Hill Development, Inc. v. Commonwealth, 338 Mass. 359, 367 (1959)(no abuse of discretion to rely on sale of subject five years prior to the valuation date).
Given that purchase price is generally the best evidence of fair cash value as of the relevant valuation date, and that § 2C is constitutional where purchase price
represents fair cash value, the "practical operation" of § 2C does not "directly and necessarily [] produce disproportion."  Compare Cheshire, 118 Mass. at 389.  Accordingly, because § 2C "may reasonably be applied in ways that do not violate constitutional safeguards," the Board ruled that it "must indulge [the presumption of constitutionality] and find that the . . . provisions escape a facial constitutional challenge."  Route One Liquors, 439 Mass. at 117-18.  
	2.	AS-APPLIED CHALLENGE
	Regarding an as-applied challenge, WB&T is entitled to relief if it proved that the § 2C tax imposed on it was in fact disproportionate.  See, e.g., Macioci, 368 Mass. at 763.  The § 2C tax imposed on WB&T is disproportionate, and therefore unconstitutional, if the ratio of WB&T's § 2C tax to the whole sum raised by taxation in Boston exceeds the ratio of the value of the subject parcels to the value of all taxable property in Boston.  See Keniston, 380 Mass. at 896-97.  Those ratios are equal if the subject parcels, like parcels subject to the general property tax, are valued at fair cash value.  See Bettigole, 343 Mass. at 231.  Accordingly, WB&T would have met its burden of proving that its § 2C tax was disproportional if it
established that the purchase price on which its § 2C tax was based exceeded the fair cash value of the parcels as of the January 1, 1999. 
However, the only facts of record in this appeal that bear on the fair cash value of the subject parcels as of January 1, 1999 are: 1) the parcels were purchased within a year of the relevant valuation date; 2) by an abutter; 3) for $4,500,000; and 4) the purchase price exceeded the parcels' assessed value for the following year.  Neither party attempted to derive a fair cash value for the subject parcels nor offered any further evidence of the parcels' value. 
It is beyond question that the taxpayer bears the burden of proof "to make out its right as [a] matter of law to [an] abatement of the tax." Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974).  That burden encompasses a requirement that the taxpayer prove "every material fact necessary to prove" its entitlement to an abatement.  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 599 (1984) 
The valuation evidence of record cuts in two contradictory directions.  The $4,500,000 purchase price paid less than a year after the relevant valuation date suggests that the purchase price represented the subject parcels' fair cash value as of the assessment date. However, the assessors' valuation of the parcels at $3,281,600, as of a date just weeks after the sale to the owner of abutting property, suggests a fair cash value as of January 1, 1999 significantly less than the purchase price.  In the absence of further evidence either reconciling the contrary evidence or supporting one or the other of these proposition, a Board finding of fair cash value would not be supported by substantial evidence.  See, e.g., New Boston Garden, 383 Mass. at 465-67 (Decisions of the Board must be based on substantial evidence; substantiality of evidence must "take into account whatever in the record fairly detracts from its weight," particularly evidence that is "robbed of persuasive substance" by other evidence).
On the present state of the evidence, the Board simply cannot reach a fair cash value determination that is supported by substantial evidence.  The record is devoid of even a description of the subject property, a fundamentally necessary consideration in reaching a fair cash value determination.  See Valkyrie Company v. Assessors of Worcester, ATB Findings of Fact and Report 2005-407, 412 ("The dearth of descriptive information left the Board without the evidence needed to make findings relevant to the value of the subject property."). 
Further, the bare fact that the property was sold to an abutter establishes neither that the price represented fair market value nor that it did not.  In order to be a reliable indicator of value, a sale price paid by an abutter requires evidence concerning the circumstances surrounding the sale to ensure that the purchase price was neither artificially inflated by "considerations unique to the purchaser" nor reduced below fair market value because the property was not sufficiently "exposed to the market." See Bainbridge v. Assessors of Chilmark, ATB Findings of Fact and Report 2003-93, 101; Cove v. Assessors of Uxbridge, ATB Findings of Fact and Report 1998-1001, 1008.  However, the absence of such evidence does not provide substantial evidence that the purchase price in fact exceeded fair cash value.  See New Boston Garden, 383 Mass. at 456 ("disbelief of any particular evidence does not constitute substantial evidence of the contrary").  
Moreover, the assessed value of the subject parcels for the subsequent year provides inconclusive evidence of their fair cash value as of January 1, 1999.  There is no evidence concerning the method or underlying factual considerations by which the assessors valued the subject parcel as of January 1, 2000 or that they considered, or were even necessarily aware of, the sale price of the parcels at the time it valued the parcels for fiscal year 2001.  Although the issuance of the fiscal year 2001 real estate tax bills to WB&T for the subject parcels indicates that the assessors clearly knew that WB&T was the record owner of the parcels as of the January 1, 2000 assessment date, there is no indication on the record that the assessors, even assuming that they were aware of the sale price, used it to value the subject parcels rather than a capitalization of income or a depreciated cost methodology.  See, e.g., Correia v. New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978) (sales, income-capitalization, and depreciated reproduction cost are the three generally approved methods of real estate valuation).  
Moreover, no evidence was offered concerning market conditions between January 1, 1999 and January 1, 2000 or whether the type or condition of any buildings on the properties remained unchanged between those dates, including whether any such buildings were razed, rehabilitated, converted to a new use, or constructed during that period.  Accordingly, the assessed value of the subject parcels for purposes of fiscal year 2001 is not
reliable evidence of what the fair cash value of the parcels were on January 1, 1999.
For all of the foregoing reasons, there is no substantial evidence of record upon which the Board could find the fair cash value of the subject parcels as of January 1, 1999.  In the absence of such a finding, the Board cannot determine whether the purchase price upon which the §2C tax was based exceeded the property's fair cash value as of January 1, 1999.  Because § 2C is "presumed valid and is entitled to the benefit of any constitutional doubt" (Opinion of the Justices, 425 Mass. at 1203-4) and WB&T had the burden of proving that § 2C is unconstitutional (id.), including all facts necessary to support its abatement claim (General Electric Co, 393 Mass. at 599), the Board ruled that WB&T failed to meet its burden of proving that the § 2C tax imposed on it was an unconstitutional disproportionate tax.  
Accordingly, for all of the foregoing reasons, the Board ruled that WB&T's failure to prove the fair cash value of the parcels as of January 1, 1999 is fatal to its claim that § 2C is unconstitutional.  The Board, therefore, ruled that WB&T failed to meet its burden of
proving its entitlement to an abatement and issued a decision for the appellee in this appeal.  

						APPELLATE TAX BOARD

				By:	___________________________________
					Anne T. Foley, Chair


					___________________________________
					Nancy T. Egan, Commissioner


					___________________________________
					James D. Rose, Commissioner



Commissioner Gorton and Commissioner Scharaffa join in the following Dissent:

     We concur with the majority insofar as they conclude that the monetary exaction provided for by G.L. c. 59, § 2C constitutes a tax. The appellant has neither availed itself of the privilege of pursuing some voluntary activity, so as to fall subject to an excise, nor received any special benefit for which a service fee may be charged. See Emerson College v. City of Boston, 391 Mass. 415, 424-425 (1984). The incidence of the tax is on the ownership of property, after purchase from an exempt owner during the course of a Fiscal Year. Cf. Riesman v. Commissioner of Corporations and Taxation, 326 Mass. 574 (1950). The imposition must accordingly conform to the standards of proportionality the Massachusetts constitution requires of property taxes. See Mass. Const., Part II, c. 1, § 1, art. 4; Mass. Declaration of Rights, art. 10. 
     At the threshold, however, we believe the majority gives short shrift to an issue that might have averted any necessity of reaching the constitutional question. The tax bill which apprised appellant of the subject liability was issued nearly two years after the December 17, 1999 purchase of the parcels at 49-57 Franklin Street, Boston from an exempt seller, which gave rise to the tax. The tax bill was not forthcoming until November 21, 2001. Thus a liability arising in Fiscal Year 2000 was not billed until Fiscal Year 2002. The clear untimeliness of the bill should be sufficient to void the liability and warrant a decision for the appellant, without regard to constitutional proportionality analysis. 
Given our conclusion that the G.L. c. 59, § 2C exaction constitutes a property tax; the statutory provision governing the timing of sending out tax bills applies by its plain terms. G.L. c. 59, § 57 states that "[e]xcept as otherwise provided, bills for real estate and personal property taxes shall be sent out seasonably upon commitment in every city, town, and district in which the same are assessed." (Emphasis added.) The legislature's choice of the criterion of "seasonabl[eness]" allows more latitude in the time frame for the billing of municipal taxes than would have pertained had a date certain been prescribed as a deadline. We assume that in qualifying circumstances a tax bill which went out somewhat late could nevertheless be termed "seasonable" and thus valid under the flexible timeliness standard § 57 adopts. 
However, the stipulated record before us is devoid of any factual circumstances suggesting the two-year delayed tax bill could be found to have been mailed "seasonably." Cf. Tambrands, Inc. v. Commissioner of Revenue, 46 Mass. App. Ct. 522, 523-24 (1999) (Notice of Assessment timely where G.L. c. 62C, § 31 prescribes notice "as soon as may be" and delay was occasioned by transition to a problem-ridden computer system). If the requirement of seasonable billing means anything, it must entail the sending out of the relevant tax bill within the applicable Fiscal Year. The City of Boston has offered no explanation of the two-year time lapse in the sending out of the tax bill for the subject parcels. Accordingly, given the absence of any basis for finding the timing to be "seasonable" as required, the tax bill was late under G.L. c. 59, § 57.
     Our conclusion that the tax bill was fatally late is strengthened by the provision governing omitted assessments at G.L. c. 59, § 75. This statute gives municipalities express authority to assess properties "unintentionally omitted from the annual assessment of taxes due to clerical or data processing error or other good faith reason...." Id. The statute addressing omitted assessments permits action to be taken as late as June 20th of the given fiscal year, or ninety days "after the date on which the tax bills are mailed, whichever is later…." Id. Yet no special provision for omitted assessments would be needed if the "seasonableness" standard of § 57 were so elastic as to stretch out beyond the relevant fiscal year regardless of circumstances. General Laws c. 59, § 75 sets up what is in effect an outside timetable for billing taxes, even then applicable only in specified instances. To allow the "seasonableness" timetable of G.L. c. 59, § 57 to sweep past the explicit time limitations applicable to omitted assessments would render §75 null; an omitted bill might just as easily be sent out "seasonably" without regard to the time parameters and restricted circumstances laid down in G.L. c. 59, § 75. See, e.g., Wolfe v. Gormally, 440 Mass. 699, 704 (2004) ("A basic tenet of statutory construction requires that a statute 'be construed 'so that effect is given to all its provisions, so that no part will be inoperative or superfluous.'")(Citations omitted.) 
     The majority elides the question of whether the liability was billed seasonably. We believe the majority errs in so doing, because a more careful reading of G.L. c. 59, § 57 could have mooted the constitutional issue.
     We accordingly turn to the validity of G.L. c. 59, § 2C. It is a given that, while this statute imposes a tax on property, the imposition is measured on a basis other than the full and fair cash value, determined using a uniform methodology and valuation date applicable to all properties alike. Because the statute, on its face, departs from the constitutional command that exactions on account of the ownership of property be proportional, our "'duty is to apply the higher law of the Constitution, and disregard the statute.'" Mullins v. Commissioner of Revenue, ATB Findings of Fact and Reports 1997-973, aff'd, 428 Mass. 406 (1998), quoting Bowe v. Secretary of the Commonwealth, 320 Mass. 230, 245 (1946).
     We perceive no disagreement that "full and fair cash value" is the constitutional lodestar which must guide all assessments of real property in the Commonwealth. See Coomey v. Board of Assessors of Sandwich, 367 Mass. 836, 837 (1975) ("Coomey"). Accord Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956) ("Boston Gas"). Indeed, two bedrock principles inform the proportionality jurisprudence of the Supreme Judicial Court: First, property must be assessed based on its "market value." See Opinion of the Justices, 220 Mass. 613, 620 (1915). Second, all properties must be "assessed on the same basis." Id. See also Shoppers' World, Inc. v. Board of Assessors of Framingham, 348 Mass. 366, 373 (1965) (articulating "the standard of the true value, and [the requirement of] uniformity and equality …." If there is conflict between these two principles, the "latter requirement is to be preferred as the just and ultimate purpose of the law.'") ("Shoppers' World")
The uniform assessment of all properties based on their market value is the foundation of a system of taxation designed to ensure that each property owner pays his proportional share of the costs of maintaining the government, no more and no less. See Opinion of the Justices, 324 Mass. 724, 727-729 (1949). Through "periodic valuations" on a standardized timetable taxing authorities adhere to the requirement that "assessments …' be made with equality.'" See Id. at 728 (Citation omitted). 
Of course, it is well-understood that "[d]etermining the value of real estate is not a science …." National Railroad Passenger Corp. v. Certain Temporary Easements, 357 F.3d 36, 39 (1st Cir. 2004). Accordingly, the Supreme Judicial Court has allowed that "'[p]ractically it is impossible to secure exact equality or proportion in the imposition of taxes'." Bettigole v. Assessors of Springfield, 343 Mass. 223, 231 (1961), quoting Cheshire v. County Commrs. of Berkshire, 118 Mass. 386, 389 (1875)("Cheshire"). "[F]ull and fair cash values can only be approximated." Macioci v. Commissioner of Revenue, 386 Mass. 752, 761 (1982) ("Macioci"). 
While the Court has necessarily accorded latitude to municipal assessors, it has insisted that practices and procedures be calculated toward achieving the end of "assessment at full and fair cash value…." See id. at 763. In the early leading case of Cheshire, 118 Mass. at 389, the Court stressed that "[t]he test, in all legislative enactments affecting taxation, is that their aim be towards [equality or proportion], by approximation at least." The constitution will not tolerate encroachment on the principle of proportionality "'whether that discrimination is effected directly in the assessment or indirectly through arbitrary and unequal methods of valuation.'" Tregor v. Board of Assessors of Boston, 377 Mass. 602, 604 (1979), quoting Cheshire, 118 Mass. at 389. Accordingly, the Court held in Cheshire, 118 Mass. at 389, that "[n]o enactment respecting taxation under [the proportionality] clause conforms to its provisions if it directly and necessarily tends to disproportion in the assessment." 
The rule of Cheshire was reaffirmed in Brookline v. County Commissioners of Norfolk, 367 Mass. 345, 350 (1975). Accord Opinion of the Justices, 324 Mass. 724, 733-34 (1949) (rejecting law which "would have 'a direct tendency to produce unreasonable or disproportional taxation' contrary to c. 1, § 1, art. 4, of the Constitution.")(Cite omitted.) The result in Macioci is consistent with Cheshire: the Court upheld the administrative guidelines being challenged only after concluding that they "were merely an aid to cities and to the Commissioner to facilitate assessment at full and fair cash value…." 386 Mass. at 763.
Applying these principles, the Court upheld the local option afforded municipalities under G.L. c. 59,  § 2A(a) to tax improvements to real property completed by July 1, as though they had existed on the January 1 valuation date for the applicable fiscal year. See C&S Wholesale Grocers, Inc. v. City of Westfield, 436 Mass. 459 (2002) ("C&S Wholesale Grocers"). The Court emphasized that this statutory provision comported with the requirement of proportionate taxation because "all properties [within a municipality] are treated uniformly with respect to the inclusion of improvements added or destroyed after the January 1 tax date and by June 30." Id. at 463. The Court went on to say that "all properties are treated equally and identically with respect to changes in value resulting from other market forces. Such changes are not accounted for after the tax date of January 1." Id.
In Opinion of the Justices, 324 Mass. 724 (1949), the Court rejected a proposed measure which would have exempted new construction from property taxation for a five year period. The Court noted that property owners within a municipality would face disparate tax treatment, with some owners paying no tax at all, while others were subjected to tax at the prescribed rate on their full and fair cash value. Id. at 729. The Court found "a direct tendency to produce unreasonable or disproportional taxation contrary to c. 1, § 1, art. 4, of the Constitution. Such exemptions would, we think, constitute in themselves a serious inroad upon the proportional principle and could readily serve as stepping stones toward still further encroachments." Id. at 733-34.
The majority fails to analyze G.L. c. 59, § 2C under the test thus laid down for squaring enactments with the constitution's requirement of proportionality. Instead, the majority reads the Macioci case broadly to say that, if on any conceivable set of facts, the enactment would operate to assess tax on the basis of full and fair cash value, the presumption of constitutionality attendant to any statute would save it. Only on proof of a divergence between the "sales price" criterion of G.L. c. 59, § 2C and the constitutional norm of full and fair cash value with respect to a subject property, the reasoning continues, would the statute fail, only as applied.
General Laws c. 59, § 2C is indeed entitled to a presumption of constitutionality, but the majority takes this precept to such an extreme as would vitiate the rule of proportionality. In the context of reviewing statutes under the rational basis prong of the equal protection clause, the test is indeed as the majority suggests. "Where taxation is concerned and no specific federal right, apart from equal protection, is imperiled, the States have large leeway in making classifications and drawing lines which in their judgment produce reasonable systems of taxation." Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S. 356, 359 (1973).
Proportionality analysis under Cheshire, by contrast, follows principles less deferential than rational basis review.  The proportionality clause offers relatively bright-line criteria with its twin requirements of assessment according to "true value" and with "uniformity and equality" in method. See Shoppers' World, 348 Mass. at 373.  See also Opinion of the Justices, 220 Mass. 613, 620 (1915) (Enactments must provide that "all property is … assessed on the same basis … [and] assessed on market value.") No statute which "directly and necessarily tends to disproportion in the assessment" passes muster. Cheshire, 118 Mass. at 389.
Once the correct constitutional analysis is applied, it becomes clear that G.L. c. 59, § 2C impermissibly tends to disproportionate assessment outcomes. First, the statute entails that the subject property is not assessed on the same basis as other properties of the same class within the City of Boston. Properties generally are assessed on the basis of their fair cash value as of the January 1 immediately preceding the beginning of the relevant fiscal year. G.L. c. 59, § 11. Properties purchased from exempt owners, by contrast, are assessed as of whatever point during the fiscal year a sale happens to be consummated. In the instant case, the subject property sold on December 17, 1999, almost twelve months after the date as of which other properties were valued for purposes of Fiscal Year 2000, or January 1, 1999. The date of sale is nearly six months after the 2000 Fiscal Year commenced. The disparity is manifest; assessing the same property as of two divergent points in time, nearly a year apart, will typically yield different values even under a uniform assessment methodology. See generally Sudbury v. Commissioner of Corporations and Taxation, 366 Mass. 558, 560 (1974) ("Sudbury")(Assessed values are "soon out-of-date" given fluctuations in the property market.) Such inconsistency in the timing of valuation upsets the proportionality which can only be achieved by gauging values as of a single fixed date, as is done with virtually all other properties within the subject's class and municipality. See generally Boston Gas, 334 Mass. at 549. 

Second, the statute conclusively adopts sale price as the measure of the tax, without providing any filter to screen out prices resulting from suspect transactions with dubious reliability as barometers of value. Nor are there mechanisms to adjust sale price to bring it into correspondence with the statutory valuation date, or fair market value as determined according to a fuller consideration of facts and circumstances. While sale price is certainly "competent evidence bearing upon fair cash value of the property on the taxing date," it is not "as a matter of law a decisive index of fair cash value…" Tremont & Suffolk Mills v. Lowell, 271 Mass.  1, 15 (1930). The Supreme Judicial Court and this Board have recognized that, in many circumstances, sale price has but a "limited relevance to establishing the fair market value of … property …." Donlon v. Board of Assessors of Holliston, 389 Mass. 848, 857 (1983). See also American House, LLC v. Board of Assessors of Greenfield, ATB Findings of Fact and Reports 2005-39 (related party sales not conclusive of fair market value); Northshore Mall Limited Partnership v. Board of Assessors of Peabody, ATB Findings of Fact and Reports 2004-195, 249 ("little weight" accorded to allocated price set by the buyer following "the August 1999 portfolio sale of the Mall"). See also Amory v. Commonwealth, 321 Mass. 240, 257 (1947) ("Our decisions uniformly hold that a sale not freely and voluntarily made must be rejected as evidence of market value….") To tax a property inflexibly on the purchase price notwithstanding abundant cautions that price is sometimes unreliable in predicting value is to engage in discriminatory "spot" assessing of the subject parcels. See C&S Wholesale Grocers, 436 Mass. at 463, n.2.
In the instant case, there is strong inferential evidence that sale price as of December 19, 1999 is not a valid measure of the fair market value of the subject parcels as of any relevant point in time. It is undisputed that the Assessors valued the subject parcels as of January 1, 2000, or two weeks after the sale, at $3,281,600, for purposes of the Fiscal Year 2001 real estate tax assessment. A marker of fair market value as gauged by the City relatively cotemporaneous with the date of sale thus reveals a substantial divergence between sale price and fair market value. See generally G.L. c. 58A, § 12B (assessed valuations admissible as evidence of fair cash value). Given the Fiscal Year 2001 assessed value, it is inconceivable that fair market value as of January 1, 1999 could somehow have equaled the December 19, 1999 $4,500,000 purchase price. At the very least, the window on value represented by the Fiscal Year 2001 assessment precludes an assumption that the property market was static in calendar year 1999.
The majority declines, however, to grasp the obvious import of the undisputed facts and postulates the theoretical possibility that the $4,500,000 sale price might correspond to the fair market value of the subject parcels as of January 1, 1999. The hope that a law might avoid disproportionality in one imagined circumstance will not cure the constitutional defect where there is a direct or necessary tendency to disproportion. Cf. Solem v. Helm, 463 U.S. 277, 303 (1983) (proportionality analysis of criminal sentence under the Eighth Amendment; possibility that commutation of sentence might avert disproportionality, insufficient to save statute.) A stopped clock will be right twice a day, but nevertheless cannot be relied upon to tell time. 
Here, inequality between sale price and fair market value for purposes of the 2000 Fiscal Year is an inescapable inference, one the Board can scarcely avoid making on the given facts.  See General Mills, Inc. v. Commissioner of Revenue, 440 Mass. 154, 161 (2004) (Findings of Board not binding where "'contrary conclusion is not merely a possible but a necessary inference from the'" facts as found.) (Citation omitted.) Thus, the G.L. c. 59, § 2C tax on properties acquired from an exempt seller during a Fiscal Year fails the requirement of proportionality that limits the imposition of property taxes. We would grant the appellant a full abatement, and must therefore respectfully dissent from the decision of the Board.


					___________________________________
					Frank J. Scharaffa, Commissioner


					___________________________________
					Donald E. Gorton, III, Commissioner





A true copy,



Attest:	____________________________
		Assistant Clerk of the Board

 Rule 31 of the Rules of Practice and Procedure of the Appellate Tax Board, 831 CMR 1.31, provides that "[a]n appeal in which no issue of fact is raised, or in which the parties file an agreed statement of facts . . . may be submitted to the Board for decision by either or both parties, on briefs without oral argument".  
  The fiscal year at issue, 2000, ran from July 1, 1999 through June 30, 2000.  Because calendar year 2000 was a leap year, February had 29 days in 2000, and fiscal year 2000 had 366 days.
  The assessors valued the individual parcels at $1,694,000 and $1,587,600, for a total assessed value of $3,281,600 for the subject parcels. 
  The deed for the subject parcels identifies the first parcel as the "land with the buildings thereon … now numbered 49-51 Franklin Street" and the second parcel as the "land with the buildings and improvements thereon, now known and numbered 53 and 55 on Franklin Street."  No description of the buildings or, in the case of the second parcel, the improvements, is given in the deed.  The § 2C tax bill contains no information concerning the parcels other than their parcel number and "51 49 Franklin Street" for the location.  The tax bills for fiscal year 2001 reference "LAND" and "BLDG" but no separate values for each.  The tax bills also appear to reflect a land area for each parcel of "3050."
 When a sale takes place between January 1 and June 30, the § 2C tax is imposed on the purchaser in lieu of the tax that would have been due if the purchaser were the owner of the property on January 1 of the year of sale and the January 1 of the year preceding the sale.  For example, if the sale at issue in this appeal occurred on January 2, 2000, the tax imposed on WB&T would be in lieu of the tax that would be due if WB&T owned the parcels as of January 1, 1999 and January 1, 2000, the relevant assessment dates for fiscal years 2000 and 2001.  It would then owe the § 2C tax for the period January 2, 2000 through June 30, 2000 for fiscal year 2000 and for all of fiscal year 2001.  
 Reaching an issue not raised by the parties, the dissent concludes that the "untimeliness" of the § 2C tax bill renders the § 2C tax void.  Such a conclusion is contrary to the established principle that a failure to send a tax bill does not affect the validity of the underlying tax.  See G.L. c. 60, § 3 ("An omission to send a notice under this section shall not affect the validity either of a tax or of the proceedings for its collection"); see also City of Boston v. DuWors, 340 Mass. 402, 404 (1960) (holding that language in G.L. c. 59, § 57 concerning sending of tax bills constituted a direction to tax collector that did not affect validity of tax); Canron v. Assessors of Everett, 366 Mass. 634, 639 (recognizing the principle that an "irregularity does not invalidate a tax notice if the taxpayer's rights were not prejudiced by the irregularity."); cf. McManus v. City of Boston, 320 Mass. 585, 587 (1963) ("The assessment of taxes is not strictissimi juris.  It has always been held that a non-compliance by the assessors with the strict requirements of the statutes, if it does not affect the rights of the tax-paying citizen, does not render the tax invalid.")  There was no allegation or evidence that WB&T was hindered in its ability to contest the § 2C tax or was otherwise prejudiced by the delay in billing the tax, and no interest appears to have been charged to WB&T.  Further, even if the timeliness of the § 2C tax bill were relevant to the validity of the § 2C tax, the Board could make no finding of fact concerning whether the § 2C bill was mailed "seasonably upon commitment" under § 57 because no evidence was offered concerning the date that the assessors committed the § 2C tax to the tax collector, the amount of time between the commitment and the sending of the bill, and the reasons for any delay between the commitment and the sending of the bill.  Cf. Tambrands, Inc. v. Commissioner of Revenue, ATB Findings of Fact and Report 1996-482, 498 (Board rejected appellant's claim that notices of assessment issued fifteen and eighteen months after assessment violated G.L. c. 62C, § 31 as a matter of law where statutory standard of "as soon as may be," in contrast to general rule of strict statutory tax deadlines, required determination "based on facts and circumstances of a particular case.").  Finally, contrary to the dissent's assertion, G.L. c. 59, § 75 cannot be read to provide an "outside timetable for billing taxes," because § 75 sets a deadline for "assessing" property unintentionally omitted from the annual assessment, not for the mailing of tax bills. See Commissioner of Revenue's Informational Guideline Release 90-215(I)(B) (§ 75 deadline is the date by which assessors "must commit the omitted or revised assessment" to the tax collector) (emphasis in original).

 Both in its initial and reply briefs, WB&T makes extended arguments concerning the imposition of a § 2C tax on purchasers who acquire property between January 1 and June 30.  WB&T acquired the subject parcels on December 17, 1999.  Accordingly, whether the constitutional rights of a purchaser who acquires property between January 1 and June 30 are somehow infringed by the imposition of a § 2C tax is not before the Board and it makes no ruling on that hypothetical proposition.  See generally, Amory v. Assessors of Boston, 310 Mass. 199, 203 (1941) (recognizing "general rule of law that one cannot attack the validity of a tax that affects only others").
 The majority argues that delay in the mailing of the instant tax bill, no matter how long, "does not affect the validity of the underlying tax". See n. 6, supra. This sweeping conclusion would all but eviscerate the requirement of "seasonab[leness]" in the billing of property taxes. See G.L. c. 59, § 57.  The word would be consigned to a merely precatory effect. If the requirement is to mean anything, billing must occur during the relevant yearly taxing cycle.  The majority's approach also renders the provision for omitted assessments at G.L. c. 59, § 75 meaningless.

ATB 2006-379