I read the First Main Street Corporation case when it was decided in 2000 (49 Mass. App. Ct. 25 (2000)).
Recently, I reread the First Main case. The reason I did so in February of 2017 is that the City of Boston has adopted a policy to tax parking spaces in condominium buildings.
I had thought that First Main had put this issue to rest seventeen (17) years ago in the year 2000. In First Main, the Town of Acton sought to tax development rights which were retained by the developer to build subsequent phases of a condominium. The assessors treated the development rights as present interests in real estate that are taxable under M.G.L. Chapter 59, Section 11. The Court strongly disagreed. Rather, the Court affirmed the decision of the Appellate Tax Board holding that “the limited scope of that taxing statute and the unambiguous prescription and proscription of M.G.L. Chapter 183A, Section 14, regarding the taxation of common areas of a condominium do not authorize the tax the assessors have sought to impose.”
The decision of the Appeals Court was authored by Judge Rudolph Kass. The Court noted that “the right to tax must be plainly conferred by statute. It is not to be implied. Doubts are resolved in favor of the taxpayer.” The Court cited for this Cabot v. Commissioner of Corp. and Taxation, 267 Mass. 338, 346 (1929). The Court stated in First Main that there often is value in the common areas but that “Everything of value, however, is not necessarily subject to taxation, unless the Legislature makes it so.”
The Court stated that the land is common area of the condominium and as such is taxed pro-rata to current unit owners in the condominium. Common areas may not under Section 14 be taxed other than proportionately to the unit owners. The Court went on to quote the statute:
“Each unit and its interest in the common areas and facilities shall be considered an individual parcel of real estate for the assessment and collection of real estate taxes, but the common areas and facilities, the building and the condominium shall not be deemed to be a taxable parcel.”
The Court concluded that the only way there could be a real estate tax on a part of the common areas would be if our legislature enacted a statute to that effect.
To sum up, in the event a Condo Lawyer walks into a Boston bar, you should ask him about the First Main case. In the event he says he is not familiar with that case or the attempt by the City of Boston to tax parking spaces, you should suggest that he “better call Saul.”