Buildings and property owned and partially occupied by the Bridgewater State University Foundation will remain tax-exempt after a Supreme Judicial Court (SJC) ruling reversed an earlier decision that initially cast doubt on charitable foundations’ ability to maintain certain tax-exempt properties.
In its decision — released today — in Bridgewater State University Foundation vs Board of Assessors of Bridgewater, the SJC sided with an initial Appellate Tax Board ruling that would have allowed three buildings and three undeveloped parcels in Bridgewater to remain tax free.
At stake in the decision was more than $40,000 in assessed taxes on the properties from 2007 and 2008, when the case was first filed.
On appeal, the initial ruling was overturned, on grounds that if the properties were not fully occupied by the foundation, their use by the university did not satisfy the requirements for tax exemption. The Bridgewater Board of Assessors argued that the properties in question were only partially occupied by the foundation’s administrative offices, and therefore weren’t eligible for tax exemption. The remaining space houses the university’s political science department offices, space for fundraising events, and open ground used by student groups, according to the decision issued today.
The Appeals Court ruled in favor of the assessors.
"[The tax exemption law] requires occupancy by the charitable organization claiming exemption … coupled with use for a purpose consistent with the charitable purpose of the occupying charitable organization," the Appeals Court wrote.
But on further review, the SJC determined that because the charitable foundation’s mission is to serve the needs of the university, and hosting university activities on the properties fulfilled that mission, the question of tax exemption was moot.
"The foundation is organized and operates for the exclusive benefit of the university, and is certified by the university to be operating consistently with the university’s goals and policies," the judges wrote in their decision. "Moreover, there is no question that the uses to which the six properties were put during the taxable years conform to these requirements, because use of these properties by the university to carry out its mission and goals is by definition fully congruent with the purpose for which the foundation was organized. In view of this… a literal construction of [Mass. General Laws] to mean that the properties owned by the foundation yet occupied by the university do not qualify for the exemption would lead to consequences that are ‘absurd or unreasonable.’"
The SJC also acknowledged amicus briefs in support of the properties’ continued tax exemption from the University of Massachusetts; the University of Massachusetts Foundation, Inc.; the Massachusetts Community College System; and the Massachusetts Charter Public School Association.
