G. L. c. 59, § 5, Cl. 31-33] Thirty-first, Stock in domestic business corporations, as defined in section thirty of chapter sixty-three.

Thirty-second, Stock in other corporations, domestic or foreign, subject to taxation under section fifty-eight of said chapter, in those years for which the corporations pay their corporate franchise taxes.

It has never been the intent of the legislature to authorize the continuance of local taxation upon a class of intangible property which is reached by taxation in some other way, and, by reason of the inherent difficulties in subjecting intangible property to local taxation, gradually all classes of intangible property which are taxed at all have been reached by some other form of tax than the local direct tax and have been withdrawn from the sphere of local taxation.

The exemptions established by clauses twenty-seven and twenty-nine were established in 1916 as one of the necessary incidents of the income tax act.1 Deposits in savings banks have been exempted from taxation since 1862, because the deposits are indirectly taxed by the excise tax on the bank which is graded in proportion to the deposits. Co-operative banks are exempt with respect to capital stock and personal property doubtless because their capital is invested almost entirely in mortgages on real estate which itself is taxed. Stock in domestic corporations and in foreign public service corporations paying a franchise tax to this commonwealth has been exempt since 1864, as the tax on the franchise is indirectly a tax on the stock.3

Exemptions Continued. - Intangible Property Held by a Fiduciary

Thirty-third (as amended by St. 1921, chap. 202), Intangible property held by any fiduciary in this commonwealth, except shares of stock taxable under section one of chapter sixty-three.

In addition to the exemptions from taxation established by the General Laws, the legislature has sometimes by special act exempted a designated corporation from taxation upon the whole

1 G. L. c. 62, infra page 428.

2 G. L. c. 63, § § 11-16 inc., infra pages 515 to 520 inc.

3 G. L. c. 63, infra pages 531 to 533 inc.

[G. L. c. 59, § 5 or a part of its property. It is not unusual in such a case for the legislature to limit the value of the property which it thus exempts from taxation and questions have arisen when a particular piece of property which was within the limit when acquired by the corporation has subsequently increased in value. until it has risen above it. When the exemption applies to the lands and tenements of which a given amount of property may be composed it follows them no matter how much they may increase in value;1 but when the exemption is a general one, of property to a certain value, all above that amount however and whenever acquired is liable to taxation. The distinction is a narrow one and may possibly have been drawn with a view to avoiding the effect of an unsatisfactory decision without directly overruling it.

An exemption granted to a particular institution is applicable to property in towns other than that in which the institution is located. When the amount of property which a corporation to which a special exemption has been granted may lawfully hold is limited by charter, the exemption extends to property held by virtue of a subsequent statute increasing the amount of property which the corporation may acquire. An exemption applicable to all of the property of a corporation while it maintains a certain building for the public use is not lost with respect to other property used for commercial purposes if the original use of the building is maintained. When the charter of a charitable corporation provides that no part of its funds shall be exempted from taxation, property which would be exempt if in the hands of an individual would not be taxable in the hands of the corporation." An agreement between two towns relating to the exemption of the property of one of the 1 towns or its inhabitants is not valid,' unless sanctioned by the legislature.

8

1 Hardy v. Waltham, 7 Pick. 108 (1828); Harvard College v. Aldermen of Boston, 104 Mass. 470 (1870).

2 Evangelical Baptist etc. Society v. Boston, 192 Mass. 412 (1906).

3 Harvard College v. Kettell, 16 Mass. 204 (1819).

4 Rural Cemetery v. Worcester County Commissioners, 152 Mass. 408

(1890).

5 Old South Association v. Boston, 212 Mass. 299 (1912).

6 Greenfield v. Franklin County Commissioners, 135 Mass. 566 (1863).

7 Dillingham v. Snow, 5 Mass. 547 (1809).

8 Capen v. Glover, 4 Mass. 305 (1808).

G. L. c. 59, §5]

An exemption from taxation contained in a special charter does not in itself carry exemption from special assessments for local improvements; but an exemption from "all civil impositions, taxes and rates" does include such an exemption. 10 An exemption "from all public taxes" will include special assessments when the land assessed is irrevocably devoted to a use which will necessarily preclude it from ever deriving any benefit from the improvement for which the assessment was made.11

Exemptions Continued.

Property Devoted to Public Use

There is another large class of exempt property, namely, property devoted to the public use, which, although not specifically exempted by statute, is not taxed because it is believed by the courts that the legislature did not intend to subject it to taxation. This exemption is based upon the uniform practice since the earliest establishment of the colony,' and upon the inapplicability to such property of the statutes relating to the collection of taxes, since in almost every case the discontinuance of public works is carefully restricted by statute and it is not to be supposed that the legislature intended such statutes to be rendered nugatory by the sale of such works for non-payment of taxes. In the absence of express provisions it has not been thought that the legislature intended to overturn the practice which had received general acquiescence for such a long period.

The exemption applies whether the property is owned by a county, city or town, or by a private corporation, but the property of a private corporation is not exempt unless the corporation is under legal obligation to serve the public and the property is such as has been or could have been acquired by eminent domain, or is irrevocably dedicated to the public use.* 9 Boston Asylum v. Street Commissioners of Boston, 180 Mass. 485 (1902). 10 Harvard College v. Aldermen of Boston, 104 Mass. 470 (1870). 11 Mount Auburn Cemetery v. Cambridge, 150 Mass. 12 (1889).

1 Worcester v. Western Railroad Corporation, 4 Met. 564, 566 (1842). 2 Wayland v. Middlesex County Commissioners, 4 Gray 500 (1855) (reservoir); Somerville v. Waltham, 170 Mass. 160 (1898) (gravel-pit); Miller v. Fitchburg, 180 Mass. 32 (1901); Chelsea v. Treasurer & Receiver General 237 Mass. 422 (1921).

3 Worcester v. Western Railroad Corporation, 4 Met. 564 (1842) (railroad); Milford Water Co. v. Hopkinton, 192 Mass. 491 (1906) (waterworks; see however G. L. c. 59, § 6, supra page 218).

4 Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866) (gas works); Connecticut Valley St. Ry. Co. v. Northampton, 213 Mass. 54 (1912) (street railway bridge); Collector of Boston v. Rising Sun Street Lighting Co., 229 Mass. 494 (1918) (street lights).

[G. L. c. 59, § 6 It is doubtful if a municipal corporation can ever tax property owned by itself, whatever use the land may be put to; and it certainly cannot tax such property when the property itself or the income therefrom is devoted to a particular public use;" but one municipal corporation may tax the property of another within its jurisdiction leased or used for profit; unless the income therefrom is devoted to a particular public use, in which case it may be that such property is exempt.8

It was held in an early case that a railroad corporation was not taxable for the land within its location devoted to railroad purposes which it was authorized to take by eminent domain." This decision was ratified by implication by the legislature in a statute providing that land taken or purchased for railroad, depot or station purposes outside the limits of the route of the railroad fixed in accordance with law should not be exempt from taxation.10

When an easement only is taken for the public use and the easement is not such as to exclude the owner of the fee from substantial enjoyment of the land, his interest in the land is taxable; but when the easement taken is substantially exclusive and leaves the owner of the fee no rights of any real value, the land itself is exempt from taxation.12

The exemption arising from the devotion of land to the public use extends to special assessments for local improvements 13 as well as to general taxation.

Payment in Lieu of Tax on Property Held for Certain Municipal Purposes

SECTION 6. Property held by a city, town or district, including the metropolitan water district, in another city or town for the purpose

5 Rossire v. Boston, 4 Allen 57 (1862).

6 Burr v. Boston, 208 Mass. 537 (1911); Massachusetts General Hospital v. Boston, 212 Mass. 20 (1912); Collector of Norton v. Oldfield, 219 Mass. 374 (1914).

7 Essex County v. Salem, 153 Mass. 141 (1891). See also Wayland v. Middlesex County Commissioners, 4 Gray 500, 502 (1855).

8 Burr v. Boston, 208 Mass. 537 (1911) semble.

9 Worcester v. Western Railroad Corporation, 4 Met. 564 (1842); Boston

& Maine R. R. v. Cambridge, 8 Cush. 237 (1851).

10 St. 1853, c. 351, § 3. now G. L. c. 160, § 87, infra page 740.

11 Hunt v. Boston, 183 Mass. 303 (1903).

12 Lancy v. Boston, 186 Mass. 128 (1904).

13 Worcester County v. Worcester, 116 Mass. 193 (1874); Boston v. Boston

& Albany R. R. Co., 170 Mass. 95 (1898).

G. L. c. 59, §§ 6, 7]

of a water supply, the protection of its sources, or of sewage disposal, if yielding no rent, shall not be liable to taxation therein; but the city, town or district so holding it shall, annually in September, pay to the city or town where it lies an amount equal to that which such city or town would receive for taxes upon the average of the assessed values of the land, which shall not include buildings or other structures except in the case of land taken for the purpose of protecting the sources of an existing water supply, for the three years last preceding the acquisition thereof, the valuation for each year being reduced by all abatements thereon. Any part of such land or buildings from which any revenue in the nature of rent is received shall be subject to taxation.

If such land is part of a larger tract which has been assessed as a whole, its assessed valuation in any year shall be taken to be that proportional part of the valuation of the whole tract which the value. of the land so acquired, exclusive of buildings, bore in that year to the value of the entire estate.

SECTION 7. The assessors of a city or town where land is acquired by such other city, town or district for water supply or sewage disposal shall, within one year after such acquisition, determine the average valuation of such land under the preceding section, and certify the amount so determined to such other city, town or district. The mayor or selectmen, the commissioners or prudential committee of a district, or the metropolitan district commission, within six months after receipt of said certificate; may appeal from such determination to the superior court for the county where the land lies; and the court shall determine the valuation in the manner provided in the preceding section, and sections sixty-five and sixty-six, so far as applicable, shall govern such appeal.

If land within any city or town shall have been taken from it for said purposes, and for any one of the three years prior to the taking shall have been used for any public purpose, and for that reason no taxes shall have been collected thereon, the city or town and the. board or officer having charge of the land so taken may within six years after the taking agree as to the value of the land upon which the annual payment is to be made as aforesaid from the time of the taking, and if they cannot agree the board or officer shall notify. the city or town thereof, and thereupon the value shall be determined by the superior court under said sections sixty-five and sixty-six, and said notice shall be deemed to be the notice referred to in said