Bill would close property tax loopholes
With the local property tax burden becoming a growing issue in cities and towns across the state, the MMA is giving priority to a bill filed for the new legislative session that would eliminate loopholes in property tax law currently being exploited by a few businesses and causing extra increases in local tax bills.
The legislation would create a uniform set of rules for assessing poles, wires, machinery and other telecommunications company property and eliminate obsolete provisions in the law that enable companies to escape local property taxes.
It is estimated that the legislation would restore and add more than $2.8 billion in valuation to local tax rolls throughout Massachusetts, thereby adding $100 million or more to local property tax levies statewide. Expanding the property tax base would allow municipal officials to slow the growth in tax bills for homeowners and small businesses.
Property tax law has been slow to change in response to rapid and dramatic changes in the telecommunications industry over the past two decades, including the development of new technologies and services and an increase in the number and types of companies providing electric, telephone, cable, Internet and other related services.
The laws governing taxation of property owned by telecommunications companies fail to recognize the various forms of company ownership that exist today. Under current rules, some telecommunications companies can take taxable property off local tax rolls simply by making changes to the legal structure of the company.
This issue was cited as a vital priority for all cities and towns by Boston Mayor Thomas Menino when he addressed the opening session of the MMA’s Annual Meeting on Jan. 7, and has been embraced by the MMA as a top initiative. Without corrective legislation, it is expected that telecommunications firms will seek to stretch their use of the tax law loophole, and localities will see an even greater erosion in their property tax base over time.
A public hearing on the bill before the Legislature’s Taxation Committee is expected some time this spring.
Written by MMA Deputy Legislative Director John Robertson
