Motion to Dismiss or Affirm — Smith v. Commissioner of Revenue

Office -Supreme Court, U.S

BILED

JUL 27 1981

ALEXANDER L. STEVAS,

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1981

MILTON J. SMITH, TRUSTEE,

Appellant,

Vv.

COMMISSIONER OF REVENUE,

Appellee.

On Appeal From The Supreme Judicial Court

For The Commonwealth of Massachusetts

MOTION TO DISMISS

FRANCIS X. BELLOTTI

Attorney General

MICHAEL BROAD

Assistant Attorney General

Government Bureau

One Ashburton Place

Boston, MA 02108

(617) 727-1034

TABLE OF CONTENTS

TABLE OF AUTHORITIES

QUESTION PRESENTED

STATEMENT OF THE CASE

ARGUMENT

CONCLUS ION

CERTIFICATE OF SERVICE

TABLE OF AUTHORITIES

CASES

Barnes v. State Tax

Commission, 353 Mass. 589 (1973)

Ingraham v. State Tax

Commission, 358 Mass. 242 (1975)

Lake Superior Mines v. Lord,

271 U.S. 577 (1926)

Mahoney v. Board of Assessors,

362 Mass. 210 (1972)

Minnesota v. Clover Leaf

Creamery Co., 66 L.Ed.

24 659 (1981)

New York et rel. Cohn v.

Graves, 300 U.S. 308 (1937)

Smith v. Commissioner of

Revenue, Mass. Adv. Sh.

(1981) 677, ie Be 2a EN ba

United States Railroad

Retirement Board v. Fritz,

66 L.Ed 2d 368 (1980)

Weinstock v. Town of Hull,

367 Mass. 656, appeal dismissed

423 U.S. 805 (1975)

id Spe

w

STATUTES

Mass. Gen. Laws c. 59

c. 59, §5

c. 59, §18

Mass. Gen. Laws c. 62

- iii -

No. 80-2207

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1981

MILTON J. SMITH, TRUSTEE,

Appellant,

Vv.

COMMISSIONER OF REVENUE,

Appellee.

On Appeal From The Supreme Judicial Court

For The Commonwealth of Massachusetts

MOTION TO DISMISS

QUESTION PRESENTED

Whether Massachusetts may impose a

property tax on real property and an

income tax on rents generated by that

property.

STATEMENT OF THE CASE

The Commissioner of Revenue accepts

appellant's statement of the case.

ARGUMENT

Under Massachusetts law, real estate

is subject to local taxation under “.G.L.

c. 59 and the rents and profits, if any,

are included in the owner's gross income

for state income tax purposes pursuant

to M.G.L. c. 62. The 1971 revision of

M.G.L. c. 62 at issue in this case "com-

pletely rewrote the Tncome Tax Law."

Barnes v. State Tax Commission, 353 Mass.

589, 592-93 (1973). "fTlhe Legislature

was fully aware of the fact that rental

income would be taxed under the proposed

revision” of the statute. Ingraham v.

State Tax Commission, 358 Mass. 242, 245

(1975).

There is no impermissible double

taxation here. Ownershipd and use are

distinct, and each may be taxed sepa-

rately. See New York ex rel. Cohn v.

Graves, 300 U.S. 308, 316 (1937); Lake

Superior Mines v. Lord, 271 U.S. 577,

581-82 (1926).

Nor does the tax violate equal pro-

tection as claimed by the Trustee. The

Trustee points to M.G.L. c. 59, §5,

Seventeenth, which exempts from _ local

taxation "Property, other than real

estate, the income from which is taxed

under Chapter sixty-two, or would be tax-

able thereunder if the property yielded

income" (emphasis added).

Despite the general exception under

G.L. c..59, §5, Seventeenth, however, the

Legislature has provided for direct tax

on substantial amounts of property the

income of which is also taxed under

M.G.Le Cc. 62. See, @.9., M.G.L. c. 59,

§18, Second (personal property tax on

unincorporated business); Mahoney v.

Board of Assessors, 342 Mass. 219, 213

n.2 (1972) (citing princival exemotions

to such taxation). Peal estate does not

stand alone.

Moreover, as the Supreme Judicial

Court observed:

There is a rational basis for

the Legislature to subject real

estate to local taxation (subh-

ject to exemptions for certain

real estate), and not to sub-

ject other income-producing

property to local taxation. [It

can be found in the expectancy

that real estate as a class

generally will be the benefi-

ciary of local services in a

far greater degree than other

forms of income producing

property.

Smith v. Commissioner of Revenue, “ass.

Adv. Sh. (1981) 677, 678, NE. 2d °

Any distinction in a tax statute that

has a rational basis will survive an

equal protection challenge. Weinstock

v. Town of Hull, 347 Mass. 65, appv. dis-

missed for want of substantial federal

question, 423 U.S. 8305 (1975). Because

there are “plausible reasons" for the

distinction, no equal protection viola-

tion can be found. United States

Railroad Retirement Board v. Fritz, 66

L. Ed. 2d 368, 378 (1980); see Minnesota

v. Clover Leaf Creamery Co., 66 L.Ed. 2d

659 (1981).

CONCLUS ION

Because no substantial federal ques-

tion is presented, the apneal should he

dismissed.

Respectfully submitted,

FRANCIS X. BELLOTTI

ATTORNEY GENERAL

Assistant Attorney General]

Government 83ureau

One Ashburton Place

Boston, MA 92108

(617) 727-1034

Date: July 24, 1981

CERTIFICATE OF SERVICE

I, Michael Broad, Assistant Attornev

General, hereby swear that I have by July

24, 1981, served the within Motion to

Dismiss by mailing three copies postage

prepaid to: William Gabovitch, 40, Court

Street, Boston, MA 02108.

Wirbed b> -/0

Assistant Attorney General

Department of the Attorney

General

One Ashburton Place

Room 2019

Boston, Massachusetts 92108

(617) 727-1034

ary ’

Dated: July 24, 1981

My Commission "Expires: Wy, Vb 6

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