[G. L. c. 58 § 10A respect to the apportionment of the state tax, and gave him power to make the apportionment without regard to the valuation of the local assessors, without notice to them and without any obligation to state the reasons for his decision. This power he exercised in a number of instances in the apportionment of 1913, summarily increasing the valuation of certain towns without notice to the town, and in many instances his apportionment was accepted by the legislature and enacted into law before the townspeople were aware of what had happened. The power of the tax commissioner in this direction was somewhat curtailed in 1914 by the enactment of the statute which now appears as the last sentence of section 10 and which provides that when the tax commissioner bases his apportionment on information other than the assessors' valuation, he shall notify the assessors and, upon request, give his reasons therefor." The statutes do not in terms give a town whose valuation has been raised a right to a hearing and an opportunity to contest in a judicial tribunal the correctness of the "other information" upon which the increase in valuation was based. It may however be assumed that in case of an arbitrary and unwarranted increase in the valuation of the town the constitutional rights of the taxpayers of the town would be protected by the courts at some stage of the proceedings even after the apportionment has been actually made by the legislature. The method of collecting from a town its proportion of the state tax provided by the annual tax acts is a warrant of distress; but this warrant can be issued only after the filing of an information in the supreme judicial court against the town, notice to the town and a hearing, so that the town has an opportunity to be heard in case of an arbitrary and unwarranted increase in its valuation or the imposition upon it of a disproportionate share of the state tax in any other manner.9 8 Disputed Corporation Taxes as Offset to State Tax SECTION 10 A (St. 1921, chap. 375, § 2). The state treasurer shall allow, as an offset to any amount due the commonwealth from any town on November fifteenth in any year by way of the state tax, a 7 St. 1914, c. 689. 8 See 8 4 of the annual tax acts. 9 Chelsea v. Treasurer & Receiver General, 237 Mass. 422 (1921). G. L. c. 58 §§ 11-17] sum equal to eighty per cent of the amount of any taxes to be distributed to such town under sections twenty to twenty-four A, inclusive, that have been paid to the commonwealth on or before November first of that year, but which by reason of pending questions of abatement or otherwise cannot be immediately distributed. Adjustment of Veterans' Exemptions Sections 11 and 12 contain provisions for equalizing the burden upon towns in the commonwealth arising from statutes which exempt from taxation certain limited amounts of property owned by veterans of certain designated wars. Section 11 provides that one-third of the total amount of taxes so exempted shall be charged against the towns of the commonwealth in the same proportions as the state tax, and that one-third of the amount so exempted in each town shall be a credit to the town against the other requirements of the state. This section. also provides for notice to the respective towns of the charges and credits and affords an opportunity of appeal to the board of appeal. Section 12 directs the commissioner of corporations and taxation to certify the charges and credits under section 11 to the state treasurer, and provides that he shall withhold them out of sums payable to the towns by the commonwealth, or pay them over, as the case may be. Reimbursement for Loss of Taxes on Land Used Sections 13 to 17 inclusive contain elaborate provisions which were first enacted in 1910 for the annual payment by the commonwealth to the towns in which the land is situated of certain amounts in lieu of taxes on land owned by the commonwealth and used for a public institution,' or for a fish hatchery, game preserve, state military camp ground or state forest. The object. of these statutes is the equitable one of not throwing the burden of the exemption upon the towns in which institutions estab 1 G. L. c. 63, § 58, infra page 582. Under G. L. c. 58, § 13, this provision was limited to public institutions under the department of mental diseases, the department of public welfare or the department of correction; but by St. 1921 c. 486 § 15 this limitation was stricken out. 2 By St. 1921 c. 282 provision was made that with respect to land used for a state forest there should be deducted from the valuation used for purposes of reimbursement the value of all forest products removed from the land since the first day of April on which it was last assessed. [G. L. c. 58 § 18 lished for the benefit of the whole state are located. It is to be noted that these provisions apply only to land and do not include buildings. The statutes provide that the valuation of this land shall be made in every fifth year by the commissioner of corporations and taxation, with a right of appeal to the board of appeal; land acquired during one of the five year periods retains its assessed valuation until the next valuation under these statutes is made. The amount of reimbursement is determined by multiplying each thousand dollars of valuation or fraction thereof by the average tax rate throughout the commonwealth as determined for the purposes of the corporate franchise tax.3 Distribution of the Income Tax SECTION 18. From the taxes collected by the commonwealth on incomes under chapter sixty-two, the state treasurer shall annually on or before November fifteenth distribute to each city, town and district the percentages hereinafter specified of an amount obtained by subtracting, from the average amount of the tax levied upon personal property in such city, town or district in the years nineteen hundred and fifteen and nineteen hundred and sixteen, the average amount, computed by the commissioner, that would be produced by a tax upon the personal property actually assessed in each city, town or district for the years nineteen hundred and seventeen and nineteen hundred and eighteen at an average of the same rates of taxation as prevailed therein in the years nineteen hundred and fifteen and nineteen hundred and sixteen, to wit: Seventy per cent for nineteen hundred and twenty-one, sixty per cent for nineteen hundred and twenty-two, fifty per cent for nineteen hundred and twenty-three, forty per cent for nineteen hundred and twentyfour, thirty per cent for nineteen hundred and twenty-five, twenty per cent for nineteen hundred and twenty-six, ten per cent for nineteen hundred and twenty-seven. The amount so collected in any of said years in excess of the sum necessary to make said payments shall be distributed in proportion to the amount of the state tax imposed upon each town in that year, after deducting a sum sufficient to reimburse the commonwealth for the expenses incurred in the collection and distribution of said tax and for abated taxes repaid under said chapter during said year, 3 G. L. c. 63, § 58, infra page 582. G. L. c. 58 § 19] which shall be retained by the commonwealth, and a sufficient sum to be distributed for school purposes under Part I of chapter seventy. In nineteen hundred and twenty-eight and thereafter all the taxes so collected shall, after making said deduction, be distributed and paid to the several towns in proportion to the amount of the state tax imposed upon each of them in each year. SECTION 19. Annually on or before August first the commissioner shall, upon the basis of the information then in his possession, notify the assessors of each town of the amount such town is to receive in any distribution of the tax upon incomes. Said assessors, in determining the rate of taxation to be levied upon taxable property for the year, shall include in the estimated receipts lawfully applicable to the payment of expenditures the aforesaid amount. It was provided in the original Income Tax Act, by the establishment of a formula designed to bring about such a result as nearly as practicable, that each town should receive a share of the proceeds of the income tax equal to the sum which it would have received if the statutes authorizing the taxation of intangible personal property by the towns had remained in force. The balance, if any, was to be distributed in proportion to the contribution of the various cities and towns to the state tax. It was specifically provided that this measure of distribution should remain in force but a single year, and thereafter the distribution among the cities and towns should be as the legislature might determine. This sufficed for the distribution during the year 1917, the first year of the tax, when the act was more or less in the nature of an experiment. In the following year, a similar provision was made for the distribution of the income tax, which was in terms applicable only to the tax collected in the year 1918. In 1919, however, as the result of a report of a special recess committee, the statute was enacted* which is now in force providing for the permanent distribution of the proceeds of the income tax, which, in substance, after first establishing a formula for determining the amount which the towns would have received if the old method of taxing 1 St. 1916, c. 269, § 23. 2 St. 1917, c. 317. A similar provision for 1919 was made by St. 1918, c. 219, but was repealed by the permanent statute (St. 1919, c. 314) before it went into effect. 3 1919 Senate Document, No. 313. 4 St. 1919, c. 314. [G. L. c. 58 19 intangible personal property had remained in force, provided for the gradual change of the method of distribution, extending through a ten-year period, from a distribution based primarily on what the towns would have received if the old method had remained in force, with the excess distributed in proportion to each town's share of the state tax, to a distribution based wholly upon each town's proportion of the state tax. At the end of the ten-year period, in 1928, and thereafter, the entire proceeds of the income tax, unless in the meantime diverted for other purposes, will be distributed in proportion to the share of each city and town in the state tax. As since 1919 the state tax has been apportioned without regard to intangible personal property," the result of this legislation has been to provide that the proceeds of the income tax, which is primarily a tax on intangible personal property, shall be distributed to the various cities and towns in proportion to their wealth in real estate and tangible personal property, and as some towns contain much wealth of the latter class and little intangible personal property of the classes subject to the income tax, and other towns contain little wealth in real estate and tangible personal property and much taxable intangible property, the effect of the law is to give to some towns a much larger share in the proceeds of the income tax than their inhabitants contribute, and to other towns much less, and thus in effect to tax the inhabitants of the latter class of towns for the use and benefit of the former. The supreme judicial court however held that although the law went to the verge of the limits of constitutional power it did not exceed them and sustained the act." It is to be noted that the provisions for distribution in the act now under consideration are subject to another act passed in the same year providing for the use of approximately four million dollars from the proceeds of the income tax as a school fund to be used for reimbursing cities and towns for amounts paid by them as salaries to school teachers when such salaries were in accordance with a certain scale established by the statute." 5 See supra page 167. 6 Duffy v. Treasurer & Receiver General, 234 Mass. 42 (1919). See also Dane v. Treasurer & Receiver General, 236 Mass. 280 (1920); Dane v. Treasurer & Receiver General, 237 Mass. 50 (1921), sustained, Dane v. Jackson, U. S. (1921). See G. L. c. 70, §§ 1-4 inc., infra page 664. |