December 18, 1979

You inquire whether excise tax must be paid under Massachusetts General Laws Chapter 64D on leases and assignments of leases.

Section 1 of Chapter 64D provides:

There shall be levied, collected and paid, for and in respect of the deeds, instruments and writings hereinafter mentioned and described, or for or in respect of the vellum, parchment or paper upon which such deeds, instruments or writings, or any of them, are written or printed, the excise taxes herein specified:-Deed, instrument or writing, whereby any lands, tenements or other realty sold shall be granted, assigned, transferred or otherwise conveyed to, or vested in, the purchaser or purchasers…

It is ruled that "deeds, instruments and writings" subject to the excise imposed by Chapter 64D are those documents by which the following interests are conveyed to, or vested in, the purchaser or purchasers -

(a) those interests in real property which endure for a period of time, the termination of which is not fixed or ascertained by a specific number of years, including but not limited to estates in fee simple, life estates, and perpetual easements; and

(b) those interests enduring for a fixed period of years but which, either by reason of the length of the term, or the grant of a right to extend the term by renewal or otherwise, consist of a bundle of rights approximating those associated with the class of interests set forth in subparagraph (a) above.

Thus, ordinary leases of real property and assignments of such leases do not constitute taxable conveyances; however, leases or assignments thereof which are for very extended terms or are renewable indefinitely are taxable. To illustrate, a lease for ten years, renewable for an additional ten years, is not taxable; a lease for 99 years is taxable.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH/JXD/jmcd

LR 79-52