Massachusetts Justices Parse Urban Renewal Tax Exemption Law

Bloomberg Law
December 8, 2022

Richard Jones is quoted in the article, "Massachusetts Justices Parse Urban Renewal Tax Exemption Law," published by Bloomberg Law [sub. req.].

The article discusses Rich's oral argument in Reagan v. Commissioner of Revenue before the Massachusetts Supreme Judicial Court on behalf of his client's appeal of a Massachusetts Appellate Tax Board ruling, which upholds the taxation of capital gains earned from the sale of urban redevelopment properties in Boston. 

Summary of the Case
The primary issue in the case is whether owners of certain urban redevelopment projects, who by clear Massachusetts statute (c. 121A) are exempt from all state and local tax and subject instead only to a special excise, are nonetheless taxable on the capital gain when they sell the project. We appeal the ATB determination that the c. 121A exemption does not apply to such capital gains and argue that the Commissioner’s narrow reading of the statutory exemption is not consistent with the legislative intent. 

A second issue in the case involves a Massachusetts tax statute (c. 62, § 6F) designed to protect taxpayers from being taxed unfairly when federal basis tax adjustments (for depreciation in this case) are not applicable for Massachusetts purposes. We argue that the statute requires that Massachusetts basis in a c. 121A project must exclude any federal basis adjustment for depreciation deductions, because such deductions  are clearly inapplicable.

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