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Survey of Railroad and Utility Taxation Practices Among the States: 2005 Update


1. Basis for taxation:

Full and fair cash value. Property is assessed at full value.

2. Property subject to taxation:

Taxable:     Railroad realty and tangible personalty outside the location of a railroad more than five rods (82.50 feet) in width; realty acquired by any corporation by eminent domain or purchased by any corporation when property could have been acquired by eminent domain; realty and tangible personalty (including underground conduits, wires, pipes, and poles) of telegraph, telecommunications, electric, and pipeline companies. Utility companies are subject to gross receipts taxation as well.

Exempt:     Property within railroad location not exceeding five rods in width; pollution abatement equipment; poles, wires and fiber optic cable situated in the public way; intangible personalty.

3. Classification (if applicable):


Class 1 - Residential
Class 2 - Open (Agricultural, Forest)
Class 3 - Commercial
Class 4 - Industrial

Railroads and utilities are taxed at class three or four rates (they are both the same). Proposition 2 1/2 limits tax levies to 2 1/2% of full and fair cash value, and also limits annual tax levy increases by that same percentage.

4. Level of government which determines basis for tax liability - ad valorem property tax:

The Division of Revenue centrally assesses certain telephone, and telegraph properties (conduits, plus poles, wires and fiber optic cable on privately owned land), plus pipelines of 25 miles or more transmitting petroleum and gas products. Local town and city assessors value all other utility property.

5. Report filing and valuation method(s) required by statute for ad valorem taxation:

entrally valued utilities are annually required to file a state return that the Commissioner of Revenue sees fit for purposes of valuation. Utilities and municipalities have the right to appeal values determined by the Commissioner before values are certified for entry onto local assessment rolls. There are no statutory methods required for valuation. Valuation procedures as in other states have developed by internal rules and regulations, as well as from case law.

6. Practical application of valuation method(s):

Centrally valued telephone and telegraph companies are valued using reproduction cost less depreciation.

7. Valuation treatment of large facilities such as power plants, dams, or rail yards:

These facilities are valued by the respective municipalities using two of the three approaches to value (as per rules and regulations).

8. Apportionment method(s) required by statute:


9. Practical application or apportionment requirements:

None, other than that centrally valued property is allocated situs.

10. Apportionment treatment of large facilities such as power plants, dams, or rail yards:

None. Such property is valued by situs.

11. Description of assessment appeals system:

Property owners can file an abatement application to the local board of assessors, with further appeal to the state appellate tax board.

12. Status of deregulation/restructuring of electric generating and impact on valuation and apportionment methods used:

Electric generating plants, which have been divested from utility companies, are valued locally according to at least two of the three major approaches to value. Transmissions and distribution equipment are still considered regulated properties.

13. State Government Staffing:

Staff consists of one employee (full-time equivalent basis).

Law Source(s):     General Laws of Massachusetts Chapter 59, especially Sections 38-42.

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