I. Introduction

This Technical Information Release ("TIR") is being issued in response to the April 28, 2008 decision of the Supreme Judicial Court ("SJC") in Bell Atlantic Mobile of Massachusetts Corporation, Ltd. d/b/a Verizon Wireless v. Commissioner of Revenue & others [1] (and a companion case) [2], 451 Mass. 280 (2008), hereinafter referred to as " BAMM."

II. SJC's Decision

BAMM came before the SJC from an appeal of a 2006 ruling of the Appellate Tax Board ("ATB").

See Bell Atlantic Mobile of Massachusetts Corporation, Ltd. d/b/a Verizon Wireless v. Commissioner of Revenue et al., A.T.B. Nos. C267959-C268176, C269027-028 (2006) and Board of Assessors of City of Newton v. Commissioner of Revenue and Bell Atlantic Mobile, LLC, A.T.B. No. C269569 (2006). See also TIR 06-19.

The SJC affirmed the rulings of the ATB, holding that a provider of wireless cellular telecommunications service is not considered a telephone company under G. L. c. 59, § 39 and is not subject to central valuation of its taxable telephone personal property by the Commissioner of Revenue ("Commissioner"). The SJC decision is premised on the conclusion that wireless cellular communications are radio communications that do not require the interconnected pole and wire infrastructure that was the basis for historical telephone utilities and the central valuation system for telephone and telegraph companies in place since the statutory enactment in 1915. The SJC also adopted the ATB's conclusion that a wireless carrier is not regulated under the statutory scheme in place for telephone companies under G.L. c. 166, but rather as a Commercial Mobile Radio Service that is regulated under G.L. c. 159 as a common carrier.

The SJC considered the correlation between G.L. c. 63, § 52A (which imposes a corporate utility excise), G.L. c. 166 (which regulates telephone and telegraph companies), and G.L. c. 59, § 5, cl. 16(1) (which grants a corporate utility property tax exemption). The SJC noted that "the language of the corporate utility exemption statutes [G.L. c. 59, § 5 cl. 16(1) and G.L. c. 63, § 52A] reinforces the conclusion that Bell Atlantic Mobile is not a telephone company." BAMM, 451 Mass. 286-287 (2008).

III. Effect of Decision on the Personal Property Tax

The Commissioner will no longer issue certified centralized valuations of a wireless cellular telecommunications carrier's taxable telephone personal property under G.L. c. 59, § 39. For valuations of property for fiscal years 2009 and after, all valuations for such property will be made by the local board of assessors in the locality where the property is located.

In addition, based on the rulings of the ATB and the analysis of the SJC, the exemption from local property tax for certain machinery under G.L. c. 59, § 5, cl. 16(1) appears to be unavailable to incorporated wireless cellular telecommunications carriers.

IV. Effect of Decision on the Corporate Excise and the Income Tax

The Commissioner will treat a wireless cellular telecommunications carrier that is a corporation within the definitions in G.L. c. 63, § 30 as subject to the business corporation excise pursuant to the provisions of G.L. c. 63, §§ 32, 39. [3] In the case of a wireless cellular telecommunications carrier that is not a corporation within the definitions in G.L. c. 63, § 30 but, rather, is treated as a partnership or a disregarded entity, the direct or indirect members of such entity shall be subject to tax in accordance with their appropriate taxpayer classification under G.L. c. 62 and/or G.L. c. 63.

Consistent with such treatment as described in the preceding paragraph, the Commissioner will assess additional taxes as may be owed by a wireless cellular telecommunications carrier or by its direct or indirect members, and will take such further actions as appropriate to implement the final decision of the SJC and the related rulings of the ATB. Also, taxpayers must file returns and amended returns in a manner consistent with such treatment.

Among other actions, within 90 days of the issuance of the final version of this TIR 08-20, the Commissioner may proceed to assessment of additional taxes, as applicable, against those taxpayers who submitted signed Forms A-37IWTC (Consents Extending the Time for Assessment of Taxes) to the Commissioner in accordance with the provisions of TIR 06-19. TIR 06-19 had provided, among other things, for the deferral of assessment activity upon receipt of such signed consents, pending resolution of judicial appeals from the earlier ATB rulings. [4] In addition, the Commissioner may assess additional taxes in cases where taxable years of these or other taxpayers are otherwise open for assessment, including pursuant to other types of consent forms extending the time for assessment.

This TIR supersedes and replaces all prior Department of Revenue public or private written statements, advice, forms, and instructions, to the extent they may be inconsistent with this TIR.

/s/Navjeet K. Bal
Navjeet K. Bal
Commissioner of Revenue

NKB:MTF:rmh

October 10, 2008

TIR 08-20



[1] Boards of Assessors of 220 cities and towns.

[2] Board of Assessors of Newton v. Commissioner of Revenue & another.

[3] Effective for tax years beginning on or after January 1, 2009, both foreign and domestic corporations will be treated as "business corporations" and taxed under G.L. c. 63, § 39. See G.L. c. 63, s. 30, as amended by St. 2008, c. 173 and TIR 08-11. In addition, for tax years beginning on or after January 1, 2009, the entity classification and filing status for business entities in Massachusetts must conform to their classification for federal tax purposes, applying the so-called "check-the-box" rules. See St. 2008, c. 173 and TIR 08-11.

[4] Form A-37IWTC references a TIR to be issued by the Commissioner, addressing a final court decision in Bell Atlantic Mobile of Massachusetts Corporation, Ltd. d/b/a Verizon Wireless v. Commissioner of Revenue et. Al.; Board of Assessors of City of Newton v. Commissioner of Revenue and Bell Atlantic Mobile, LLC. This TIR 08-20 constitutes the TIR referenced in Form A-37IWTC.