This case, recently decided by the Massachusetts Supreme Judicial Court, raised the question whether providers of wireless telephone services qualify as “telephone companies” entitled to uniform, statewide valuation of personal property for purposes of Massachusetts property taxes. The alternative is to consider mobile phones more like radios such that mobile carriers are subject to local property tax valuations everywhere their taxable personal property is located.
The issue arose because the relevant statutory provisions do not define “telephone company.” Concerned that a contrary view could chill the development and availability of new telecommunications technologies in the state, NELF and AIM argued in support of the taxpayer that it should be the nature of the service provided rather than the technology employed that determines a company’s entitlement to centralized, uniform valuation. The SJC disagreed, however, adopting statutory construction arguments of the Appellate Tax Board, which focused on the technology in use when the statutes were originally passed in the early 20th century. The Court’s decision thus gives favorable tax treatment to old, land-line technology over newer technologies, concluding that the entitlement to central valuation is a function of the physical interconnectedness of the land-line telephone system infrastructure. While acknowledging that its decision may chill technological innovation, the Court considered that a policy matter to be addressed to the Legislature.