DLS Newsletter

What happens after the collector makes and records the tax taking?

By perfecting the real estate tax lien, the collector has created a tax title, which becomes the responsibility of the city or town treasurer. If the treasurer receives full payment of the total amount in tax title as of the payment date, then the treasurer issues a redemption certificate. If full payment is not received, the treasurer can institute a proceeding to foreclose the taxpayer's right to redeem by filing a petition in Land Court. MGL c. 60, sec. 65.

If subsequent years' taxes are unpaid on a parcel in tax title, what happens to these taxes?

There can only be one tax title on a parcel. Therefore, if the taxpayer does not pay the taxes assessed for a subsequent fiscal year, the collector certifies those unpaid taxes to the tax title account. MGL c. 60, sec. 61. The taxpayer has the right to pay the current year's tax without incurring interest. Therefore, the certification cannot be made until after the due date for the last installment payment for the fiscal year.

Should preliminary taxes be certified to a tax title account?

No. The statute, MGL c. 60, sec. 61, speaks of "taxes assessed subsequently." That means the taxes established by an actual assessment and commitment, and not a preliminary or estimated tax. It is the actual commitment that fixes the tax liability of each taxpayer for the year. The commitment of the actual tax supersedes the preliminary or estimated tax commitment, and the actual tax could be lower or higher than the preliminary or estimated tax.

Can the collector make a tax taking if the taxpayer has filed an abatement application with the assessors or appealed an adverse decision of the assessors to the Appellate Tax Board?

The filing of the abatement application with the assessors, or a further appeal to the Appellate Tax Board, does not stay proceedings for the collection of the tax. The collector should make the tax taking to perfect the municipality's lien. However, the treasurer should not petition the Land Court for foreclosure until the abatement issue has been ultimately resolved and the tax for the year determined, as it impacts the amount the taxpayer must pay to redeem.

A Brief Look Back: Motor Vehicle Excise

Tony Rassias - Bureau of Accounts Deputy Director

"A Brief Look Back" reviews issues that affected municipal finance in the early twentieth century as written in the Annual Reports of what is now known as the Massachusetts Department of Revenue. This month, City and Town features "Excise Tax on Registered Motor Vehicles in Lieu of Local Tax."

Introduction

Up until 1929, motor vehicles were taxed as personal property by each municipality and at the tax rate for that municipality. But collection of the tax was awkward because there was no uniformity in value, rate or administration. Issuing a tax bill was dependent upon the owner filing notice with the assessors of his taxable property on the appropriate date or else face "the doom of the assessor." Despite the potential doom, form filing didn't happen often, which was a general problem for personal property.

In 1929, the excise brought in about $10,000,000 or 50% more tax revenue from motor vehicles than in 1928. In 1929, the average motor vehicle value was $389.75; the average tax was $10.36 and the tax rate was $29.65/000.

On January 31st, 1929, Commissioner of Corporations and Taxation Henry F. Long gave his Annual Report for 1928 to the Honorable Massachusetts Senate and House of Representatives. In his report, he explained the new motor vehicle excise law which could pave the way for other states to follow Massachusetts' example "to handle a tax matter almost certain to be unequal and unfair under the general property tax law."

The following are excerpts from his report.

By the Commissioner

Massachusetts, so many times in the forefront in the enactment of beneficial laws and policies on matters affecting the people and their government, has this year by the passage of the law providing an excise tax on registered motor vehicles in lieu of a local tax (Chapter 379 - 1928) shown the way for all states to solve a most vexatious tax problem occasioned by the attempt to lay a tax against motor vehicles under the general property tax law.

The experience of every taxing jurisdiction has been that the assessment and collection of local taxes on motor vehicles is most unsatisfactory and vexatious in administration. This for many reasons.

The ownership of motor vehicles on the taxing day is spread among a larger class of taxpayers than is the rule on any other kind of property. The temptation to evade the tax is ever present and where excessive valuation is indulged in or where the tax rate is constantly increasing it becomes most pronounced. The taxpayer having all too frequently reasonto know that the value of his motor vehicle is nowhere near the cost of it to him, and the taxing officials all too frequently feeling that they are faced with the necessity of obtaining substantial revenue from the motor vehicle, reach a situation where unpleasant and worse situations develop in the laying and collecting of the tax. The Massachusetts local tax law provides, as has been the case for a long period of years, for the filing by each taxpayer with the local assessors of a list of all his personal property. This on the theory that assessors merely act for the municipality as a whole and each person in the municipality for the benefit of all makes complete disclosure of all taxable property held by him on the taxing day. This practice not being observed the assessors are compelled to follow the law and estimate the value of the taxpayer's tangible personal property.

In an effort to approach fairness the local assessors have almost uniformly used the same values in each city and town made possible by having available a book showing current values on all makes of motor vehicles. Despite every effort to overcome the unfair situation it was agreed on all hands that the existing law was not fair to the municipality or to the taxpayer. The effort to obtain a better tax law for the motor vehicle has been going on for some few years.

If the success of the excise on motor vehicles approaches what is hoped of it many other States of the Union are certain to follow this Massachusetts example of a fair and just way to handle a tax matter almost certain to be unequal and unfair under the general property tax law.

If you are interested in reading the Commissioner's entire piece, clickhere.

Employment Opportunity with the DLS Technical Assistance Team

Technical Assistance Bureau

The DLS Technical Assistance Bureau is looking to hire some energetic, innovative professionals to help cities and towns implement best practices as part of a high-profile, grant-funded initiative by the Baker-Polito Administration. As a project manager, you will work collaboratively with Division team members to interview local officials, analyze complex financial and operational conditions, and deliver guidance on forecasting, capital planning, budgeting, and financial policies. This is great opportunity to work with a wide variety of cities and towns while traveling throughout the state to fulfill this critical role. Successful candidates can choose to be based in our Boston, Worcester or Springfield office.

Interested? Click on the link below to learn more.

https://massanf.taleo.net/careersection/ex/jobdetail.ftl?job=160000JO

Save the Date - Assessment Administration: Law, Procedures, and Valuation (Course 101)

The Division of Local Services will offer the basic assessor training course "Assessment Administration: Law, Procedures and Valuation", also known as Course 101, in Barnstable this spring. The course will be held from 9am to 4:30pm on three Wednesdays starting April 6th and ending April 27th. Please note that there will be no class on April 20thdue to school vacation week. If you have any questions regarding this training opportunity, please contact Donna Quinn at (617) 626-3838 or at quinnd@dor.state.ma.us.

New IGRs

The Division of Local Services has posted on its website the following Informational Guideline Releases (IGRs) explaining several local acceptance special funds.

IGR 16-101 - Tax Title Collection Revolving Funds

IGR 16-102 - Cable Television Public, Educational and Governmental Access Special Revenue Funds

IGR 16-103 - Municipal Water Infrastructure Investment Fund

For additional IGRs, please click here.

OSD Announcements

Operational Services Division

New Statewide Contract for Athletic Supplies and Physical Education Equipment

In response to requests from municipal purchasing entities, the Operational Services Division (OSD) has launched new Statewide Contract FAC95 encompassing physical education and athletic supplies, equipment, sports uniforms, and related physical education items. This new contract has been awarded to BSN Sports/U.S. Games with BSN Sports, LLC acting as the primary vendor.

Contract Highlights

• Features the nation's largest manufacturer, marketer, and distributor of sporting goods products offering average savings of 30% off MSRP;

• Top brands for athletic and physical equipment;

• U.S. manufacturer of many products such as bleachers, backstops, and soccer goals;

• Custom weight room and fitness equipment;

• Physical education products designed for primary and physical education programs;

• Products focused on early childhood development, physical activity, and health;

• 1% Prompt-Pay Discount for payments made within 10 days;

• 24-hour quick-ship program for most products (22,000 SKUs);

• Ability to pursue bulk discounts on large orders.

Consult the FAC95 Contract User Guide for product category details and guidance to obtain quotes. Refer additional questions about FAC95 to Steve Lyons.

Find information about all statewide contracts here.

Filing Window Opens for E-Rate Program: Use Statewide Contracts to Streamline the E-Rate Process

The Federal Communications Commission's (FCC) E-Rate Program offers discounts between 20-90 percent of the purchase of eligible telecommunications services and products. Statewide contracts (SWC) facilitate the E-Rate filing process, providing a selection of awarded vendors for buyer consideration. Moreover, OSD has already filed FCC Form 470 (Description of Services Requested and Certification Form) on behalf of buyers for each eligible SWC. Find detailed information about using SWCs for the E-Rate program on OSD's website.

Contact OSD at OSDOutreach@state.ma.us.