Case Title: Outfront Media LLC v. Board of Assessors of Boston

Citation: 

Docket Number: SJC-13489

State: massachusetts

Court: Massachusetts Supreme Court

Date: 2024-04-22T00:00:00Z

Document:
NOTICE:  All slip opinions and orders are subject to formal 
revision and are superseded by the advance sheets and bound 
volumes of the Official Reports.  If you find a typographical 
error or other formal error, please notify the Reporter of 
Decisions, Supreme Judicial Court, John Adams Courthouse, 1 
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us 
 
SJC-13489 
 
OUTFRONT MEDIA LLC  vs.  BOARD OF ASSESSORS OF BOSTON. 
 
 
 
Suffolk.     January 8, 2024. - April 22, 2024. 
 
Present:  Budd, C.J., Gaziano, Kafker, Wendlandt, & Georges, JJ. 
 
 
Taxation, Real estate tax:  abatement, Real estate tax:  
exemption.  Real Property, Tax.  Massachusetts Bay 
Transportation Authority, Contract.  Advertising.  Sign.  
Practice, Civil, Burden of proof.  Statute, Construction.  
Words, "Used," "In connection with." 
 
 
 
 
Appeal from a decision of the Appellate Tax Board. 
 
 
The Supreme Judicial Court on its own initiative 
transferred the case from the Appeals Court. 
 
 
 
Kelly L. Frey (Edmund P. Daley also present) for the 
taxpayer. 
 
Anthony M. Ambriano for board of assessors of Boston. 
 
Thomas R. Kiley & Meredith G. Fierro, for Out of Home 
Advertising Association of America, amicus curiae, submitted a 
brief. 
 
Dustin F. Hecker & Daniel B. Winslow, for New England Legal 
Foundation, amicus curiae, submitted a brief. 
 
 
 
KAFKER, J.  The real and personal property of the 
Massachusetts Bay Transportation Authority (MBTA) is generally 
2 
 
exempt from tax.  G. L. c. 161A, § 24 (§ 24).  However, any MBTA 
real estate that is "leased, used, or occupied in connection 
with a business conducted for profit" is taxed as if the lessee, 
user, or occupant were the owner in full of the real estate.  
Id.  At issue here is the use of MBTA outdoor advertising signs.  
Outfront Media LLC (Outfront) entered into a contract with the 
MBTA that, among other things, gave Outfront the exclusive right 
to advertise on outdoor advertising signs owned by the MBTA.  
Under the contract, Outfront was required to pay a minimum 
guaranteed amount to the MBTA and a set percentage of any 
advertising revenue earned above the minimum guaranteed amount.  
However, Outfront was entitled to the rest of any advertising 
revenue and was not capped on the amount of revenue it could 
potentially earn from the signs. 
The city of Boston (city) assessed real estate tax for 
fiscal year 2021 on Outfront for the signs.  Outfront sought an 
abatement of the tax, arguing that the signs were exempt from 
taxation under § 24.  The city denied Outfront's claim for 
abatement, and Outfront appealed to the Appellate Tax Board 
(board), which upheld the tax assessment. 
 
The main issue in this case is whether Outfront's 
employment of the signs to post advertisements and generate 
advertising revenue, among other activities, is a "use" of the 
MBTA's property "in connection with a business conducted for 
3 
 
profit" under § 24.  We conclude that such a use includes the 
advertising business conducted for profit by Outfront here, and 
we distinguish such businesses from those merely providing a 
service for the MBTA such as a janitorial service.  We thus hold 
that Outfront used the signs within the meaning of § 24 and 
uphold the decision of the board.1 
1.  Background.  a.  Facts.  The following facts are 
undisputed.2  The MBTA owns many outdoor advertising signs (MBTA 
signs), which are managed by outside contractors and provide a 
reliable revenue stream to support the MBTA's transit 
operations.  In April 2019, the MBTA issued a request for 
responses, seeking bidders for a long-term contract to operate 
and maintain existing signs, as well as to implement new signs.  
Pursuant to the request, in October 2019, Outfront entered into 
 
1 We acknowledge the amicus briefs submitted by the Out of 
Home Advertising Association of America and the New England 
Legal Foundation. 
 
2 On appeal, Outfront argues that there is a material 
question of fact whether the assessed property taxes negatively 
affect the MBTA's income.  However, Outfront did not raise this 
factual dispute before the board.  Rather, Outfront made a legal 
argument regarding the taxes interfering with the MBTA's 
essential government function, but it did not dispute any 
specific facts in the record.  Having failed to raise this 
argument below, Outfront has waived it.  See Carey v. New 
England Organ Bank, 446 Mass. 270, 285 (2006).  Moreover, as 
discussed infra, we conclude that the taxation of the MBTA 
pursuant to § 24 does not interfere with the MBTA's essential 
government function. 
4 
 
a contract with the MBTA (contract) to manage the MBTA signs 
through June 2034. 
Specifically, under the contract, the MBTA granted Outfront 
the exclusive right to advertise on 121 existing signs and seven 
new signs to be designed and installed by Outfront on MBTA 
property.  Outfront also received "the exclusive right to 
install, license, operate and maintain telecommunications 
equipment" on the MBTA signs as an ancillary use.3 
The contract gave Outfront the power to set rates and 
charges for the sale of advertising space on the MBTA signs, 
subject to the prior review and approval of the MBTA.4  The MBTA 
also reserved the right to use, at no cost, up to twenty-five 
percent of the digital display time on the MBTA signs to market 
the image and services of the MBTA and its municipal partners.  
Moreover, Outfront was required, again at no cost, to make sign 
display time available to the MBTA and other government agencies 
 
3 It appears that the telecommunications arrangement was 
generally similar to the advertising arrangement.  Outfront 
could contract with third parties that wanted to install 
equipment for purposes of providing telecommunications services 
(such as wireless Internet), and the MBTA was entitled to a 
share of any revenue from these contracts.  Outfront received 
the remainder of the revenue, which was not capped. 
 
4 The MBTA also reserved the right to review the content of 
the advertising.  Outfront could select advertisers, but in 
doing so was required to evaluate all advertising content to be 
posted for compliance with the MBTA's advertising guidelines.  
Prior to posting any advertisements, Outfront submitted the 
content to the MBTA for its review and approval. 
5 
 
to post emergency messages involving public safety or major 
service disruptions. 
Outfront was also required to compensate the MBTA in 
several ways.  First, regardless of revenue earned, Outfront 
paid the MBTA a minimum annual guaranteed amount of $3,366,000.  
Second, Outfront paid the MBTA each month a share of the gross 
revenue it earned from the MBTA signs.  The MBTA's gross revenue 
share was a set percentage of advertising and telecommunications 
revenue from the MBTA signs that exceeded the monthly guaranteed 
amount.  Outfront was entitled to the remaining revenue it 
earned above these amounts and was not capped on the amount of 
revenue it could earn from the MBTA signs or the 
telecommunications equipment. 
The contract generally required Outfront to bear the costs 
of installing, maintaining, and operating the MBTA signs.  For 
example, Outfront was required to obtain all government permits 
at its own cost and expense, bear the risk of any loss from 
damage to the MBTA signs, and cover the costs of repairs to the 
MBTA signs.  Similarly, the contract required that the MBTA 
signs be powered and metered in Outfront's name and that 
Outfront pay all related utility costs and fees.  Outfront was 
also required to carry a range of insurance policies, such as 
general liability, automobile liability, and workers' 
compensation.  Finally, Outfront was responsible for paying all 
6 
 
taxes applicable to services it performed and the rights and 
interests granted to it under the contract, but the MBTA agreed 
"[t]o the extent allowed by law" to pass on to Outfront any tax 
exemptions applicable to the MBTA. 
Upon the contract's expiration or termination, Outfront was 
required to "hand back" the MBTA signs to the MBTA in a state of 
good repair and to assign all existing revenue-generating 
contracts to the MBTA; Outfront was entitled to fifteen percent 
of all advertising revenue collected after the date of 
assignment. 
 
The city assessed $198,257.49 in real estate taxes on 
Outfront for the MBTA signs located in the city for fiscal year 
2021.  Outfront paid the taxes and applied for an abatement of 
all such taxes assessed by the city.  The city denied the 
abatement applications, and Outfront timely appealed to the 
board, which upheld the tax assessment. 
b.  Procedural history.  In January 2022, Outfront moved for 
summary judgment before the board.  The city subsequently moved 
for partial summary judgment.5  The board found that Outfront 
"used" the MBTA signs within the meaning of § 24 and thus was 
not exempt from property tax and denied Outfront's request for 
 
5 Outfront elected to withdraw its secondary and alternative 
challenge to the valuation of the MBTA signs that are the 
subject of this appeal. 
7 
 
an abatement.  Outfront appealed, and we transferred the case on 
our own motion from the Appeals Court. 
2.  Discussion.  a.  Standard of review.  In our review of 
board decisions, "[w]e uphold findings of fact of the board that 
are supported by substantial evidence" and "review conclusions 
of law, including questions of statutory construction, de novo."  
Shrine of Our Lady of La Salette Inc. v. Assessors of Attleboro, 
476 Mass. 690, 696 (2017) (Our Lady of La Salette).  Because 
this case was submitted to the board on a statement of agreed 
facts, "the inferences drawn by the board from the facts stated 
are not binding upon us" (alterations and citation omitted).  
Middlesex Retirement Sys., LLC v. Assessors of Billerica, 453 
Mass. 495, 499 (2009).  Although we review questions of law de 
novo, "because the board is an agency charged with administering 
the tax law and has expertise in tax matters, we give weight to 
its interpretation of tax statutes, and will affirm its 
statutory interpretation if that interpretation is reasonable" 
(quotation and citations omitted).  AA Transp. Co. v. 
Commissioner of Revenue, 454 Mass. 114, 118 (2009).  But 
"principles of deference are not principles of abdication," and 
ultimately, "the interpretation of a statute is a matter for the 
courts" (citations omitted).  Our Lady of La Salette, supra. 
b.  Burden of proof.  At the threshold, we must determine 
who carries the burden of proof.  Outfront argues that the city 
8 
 
should carry the burden of proving that Outfront is subject to 
taxation by establishing that it uses public property in 
connection with a business conducted for profit.  The city 
maintains that Outfront is seeking a tax exemption and thus the 
burden of proof properly lies with Outfront.  We conclude that 
Outfront is seeking a tax exemption, and therefore, it must 
shoulder the burden of proof. 
As a general rule, "[a]ll property, real and personal, 
situated within the commonwealth . . . , unless expressly 
exempt, shall be subject to taxation."  G. L. c. 59, § 2.  
General Laws c. 161A, § 24, states that "[n]otwithstanding any 
general or special law to the contrary, the [MBTA] and all its 
real and personal property shall be exempt from taxation and 
from betterments and special assessments."  However, the 
exemption does not apply to any MBTA real property if it is 
"leased, used, or occupied in connection with a business 
conducted for profit."  G. L. c. 161A, § 24.  Such property is 
taxable to the lessee, user, or occupant as if they were the 
owner in full of the real property.  Id. 
When construing a tax exemption, we are "guided by the 
principle that 'an exemption from taxation is a matter of 
special favor or grace, and . . . statutes granting exemptions 
from taxation are therefore to be strictly construed.'"  Reagan 
v. Commissioner of Revenue, 491 Mass. 446, 451 (2023), quoting 
9 
 
South Boston Sav. Bank  v. Commissioner of Revenue, 418 Mass. 
695, 698 (1994).  See Beacon S. Station Assocs. v. Assessors of 
Boston, 85 Mass. App. Ct. 301, 305 (2014).  "An exemption is 'to 
be recognized only where the property falls clearly and 
unmistakably within the express words of a legislative 
command.'"  Reagan, supra, quoting State Tax Comm'n v. Blinder, 
336 Mass. 698, 703 (1958).  "The burden is on the taxpayer to 
demonstrate entitlement to an exemption claimed."  Reagan, 
supra, quoting South Boston Sav. Bank, supra. 
Outfront nonetheless argues that because the applicability 
of the exception to § 24's general rule of tax exemption is at 
issue, the city is effectively seeking to tax Outfront and, 
thus, we should apply the canon of construction that "tax laws 
are to be strictly construed" and "[t]he right to tax must be 
plainly conferred by the statute"; it cannot be implied 
(citation omitted).  Squantum Gardens, Inc. v. Assessors of 
Quincy, 335 Mass. 440, 447-448 (1957).  We disagree.  Although 
Outfront is correct that tax statutes are strictly construed in 
favor of the taxpayer, this standard is applied when determining 
whether a statute imposes a tax, rather than where, as here, the 
issue is whether the taxpayer is entitled to an exemption.  See 
AA Transp. Co., 454 Mass. at 121 (finding taxpayer incorrectly 
applied standard for construing statute imposing tax to claim of 
exemption).  Contrast Citrix Sys., Inc. v. Commissioner of 
10 
 
Revenue, 484 Mass. 87, 91-92 (2020) (noting that tax statutes 
are strictly construed with ambiguity resolved in favor of 
taxpayer where issue was whether sales tax applied to software 
subscription fees). 
The issue here is whether Outfront may benefit from the 
MBTA's tax exemption.  Absent such exemption, there is no 
question that the real property would be subject to taxation.  
Indeed, neither party contests the fact that, but for the § 24 
exemption, and in the absence of any other applicable 
exemptions, the signs would generally be taxable as real 
property.  See G. L. c. 59, § 2.  Rather, the parties dispute 
whether a tax exemption applies.  Consequently, as this case 
involves the scope of a tax exemption, and not the power to 
impose the tax, the burden of proof falls on the party seeking 
the exemption, Outfront. 
The fact that § 24 contains an exception to the tax 
exemption does not shift the burden to the city.  This court has 
applied the same burden of proof on the taxpayer for exemptions 
that contain exceptions.  In Our Lady of La Salette, 476 Mass. 
at 695-696, we interpreted a property tax exemption, G. L. 
c. 59, § 5, Eleventh, which applies to "[h]ouses of religious 
worship owned by, or held in trust for the use of, any religious 
organization, and the pews and furniture and each parsonage so 
owned . . . for the exclusive benefit of the religious 
11 
 
organizations."  This exemption also contains an exception -- 
the exemption does not "extend to any portion of any such house 
of religious worship appropriated for purposes other than 
religious worship or instruction."  Id., quoting G. L. c. 59, 
§ 5, Eleventh.  Among the issues on appeal was whether certain 
uses of the religious organization's property were for purposes 
other than religious worship or instruction.  Our Lady of La 
Salette, supra at 691.  In interpreting the statute, we applied 
the typical canon of construction for tax exemptions and placed 
the burden of proof on the taxpayer.  Id. at 696. 
Similarly, in New England Legal Found. v. Boston, 423 Mass. 
602, 609 (1996), this court interpreted another property tax 
exemption containing an exception.  General Laws c. 59, § 5, 
Third, exempts real estate owned by or held in trust for a 
charitable organization and occupied by the organization or its 
officers for the purposes for which it was organized, but it 
includes an express exception for any income or profits of the 
charitable organization used for other than "literary, 
benevolent, charitable, scientific or temperance purposes."  Id. 
at 603 n.2, quoting G. L. c. 59, § 5, Third (a).  The city taxed 
the New England Legal Foundation's (NELF's) office units, taking 
the position that NELF was not a charitable organization or, 
even if NELF was a charitable organization, it was not exempt 
because the express exception applied.  New England Legal 
12 
 
Found., supra at 612.  Here, we also applied the standard rule 
of construction for tax exemptions, noting that "a heavy burden 
rests on the taxpayer to demonstrate that the tax exemption 
. . . applies."  Id. at 613. 
 
Outfront, apart from citing the standard rule of strictly 
construing taxing statutes, offers no support for the 
proposition that exceptions to exemptions should be construed in 
favor of the taxpayer.  Thus, "[t]he burden is on [Outfront] to 
demonstrate entitlement to an exemption claimed."  Reagan, 491 
Mass. at 451, quoting South Boston Sav. Bank, 418 Mass. at 698. 
c.  Meaning of "used . . . in connection with a business 
conducted for profit" in § 24.  The principle substantive 
question in this case is whether the property in question was 
"used" "in connection with a business conducted for profit" 
under § 24.  We conclude that it was.  "Used . . . in connection 
with a business conducted for profit" has a particular meaning 
here.  As did the board, we draw a statutory distinction between 
using public property to conduct a for-profit business, which 
would thereby provide the business with an advantage over a 
competitor operating on private property, and simply providing 
services to the public entity, such as janitorial or plumbing 
services.  "Used" in this context involves more than just a 
presence on the property to provide services requested by the 
public owner.  Rather, "used" in § 24 refers to a right to 
13 
 
exercise a significant degree of control over the property to 
conduct for-profit business on it. 
 
"A statute must be interpreted according to the intent of 
the Legislature ascertained from all its words construed by the 
ordinary and approved usage of the language, considered in 
connection with the main cause of its enactment, the mischief or 
imperfection to be remedied and the main object to be 
accomplished, to the end that the purpose of its framers may be 
effectuated" (alteration and citation omitted).  Reuter v. 
Methuen, 489 Mass. 465, 470 (2022).  While G. L. c. 161A 
contains a definition section addressing many of the terms in 
the statute, the word "use" is not defined in that section or 
elsewhere.  See G. L. c. 161A, § 1.  "When a statute does not 
define its words we give them their usual and accepted meanings, 
as long as those meanings are consistent with the statutory 
purpose. . . .  We derive the words' usual and accepted meanings 
from sources presumably known to the statute's enactors, such as 
their use in other legal contexts and dictionary definitions."  
Matter of the Estate of Slavin, 492 Mass. 551, 554 (2023), 
quoting Williams v. Board of Appeals of Norwell, 490 Mass. 684, 
693-694 (2022). 
We also do not interpret words in a statute in isolation.  
See Plymouth Retirement Bd. v. Contributory Retirement Appeal 
Bd., 483 Mass. 600, 605 (2019) ("Beyond plain language, courts 
14 
 
must look to the statutory scheme as a whole so as to produce an 
internal consistency within the statute.  Even clear statutory 
language is not read in isolation" [quotations, citations, and 
alteration omitted]).  Further, "[t]he canon of noscitur a 
sociis counsels that terms must be read within the context of 
the statute in which they appear. . . .  The literal meaning of 
a general term in an enactment must be limited so as not to 
include matters that, although within the letter of the 
enactment, do not fairly come within its spirit and intent" 
(quotation and citation omitted).  Richardson v. UPS Store, 
Inc., 486 Mass. 126, 130-131 (2020). 
i.  Plain language and statutory context.  We start with 
the "ordinary and approved usage of the language" of the 
statute.  Oracle USA, Inc. v. Commissioner of Revenue, 487 Mass. 
518, 522 (2021), quoting Commissioner of Revenue v. Gillette 
Co., 454 Mass. 72, 76 (2009).  Section 24 states that "[r]eal 
property of the [MBTA] shall, if leased, used, or occupied in 
connection with a business conducted for profit . . . be valued, 
classified, assessed and taxed . . . to the lessee, user, or 
occupant in the same manner and to the same extent as if such 
lessee, user, or occupant were the owner thereof in full" 
(emphases added).  G. L. c. 161A, § 24.  Read in isolation, 
"use" is a capacious term.  See, e.g., Gordon v. Safety Ins. 
Co., 417 Mass. 687, 690 (1994), quoting Webster's Third New 
15 
 
International Dictionary 2523 (1961) ("The ordinary meaning of 
'use' includes 'the legal enjoyment of property that consists of 
its employment, occupation, exercise or practice'").  However, 
looking to the words surrounding "use" in § 24 offers us a 
narrower understanding of the word. 
First, "used" appears in a list, alongside "leased" and 
"occupied."  Occupancy is "[t]he act, state, or condition of 
holding, possessing, or residing in or on something."  Black's 
Law Dictionary 1297 (11th ed. 2019).  A lease is generally 
understood as a "contract[] for the possession of property" 
(citation omitted).  Humphrey v. Byron, 447 Mass. 322, 326 
(2006).  See Black's Law Dictionary 1068 (11th ed. 2019) 
(defining lease as "[t]o grant the possession and use of [land, 
buildings, rooms, movable property, etc.] to another in return 
for rent or other consideration").  These terms share a common 
feature -- they imply a significant degree of control over the 
property, akin to the type of control the property's owner would 
be able to exercise.  See Reade v. Secretary of the 
Commonwealth, 472 Mass. 573, 581 (2015), cert. denied, 578 U.S. 
946 (2016), quoting Franklin Office Park Realty Corp. v. 
Commissioner of the Dep't of Envtl. Protection, 466 Mass. 454, 
462 (2013) ("words grouped together in a statute must be read in 
harmony, and we are not free to interpret one provision in a way 
16 
 
that makes it exceptionally broader than its neighbors" 
[alterations omitted]).6 
Second, § 24's exception does not apply to all uses of MBTA 
property, only to the use of MBTA property "in connection with a 
business conducted for profit."  "'In connection with' . . . is 
defined as related to, linked to, or associated with."  Nguyen 
v. Arbella Ins. Group, 91 Mass. App. Ct. 565, 568 (2017), 
quoting Metropolitan Prop. & Cas. Ins. Co. v. Fitchburg Mut. 
Ins. Co., 58 Mass. App. Ct. 818, 821 (2003).  Thus, the use must 
be linked or related to the operation of a business for profit. 
This is important because the amendment of § 24 to add the 
exception has the effect of preventing such businesses from 
gaining an advantage over competitors operating on property 
subject to taxation.7 
 
6 It is noteworthy that § 24 provides that the for-profit 
business lessee, user, or occupant of MBTA property is, for tax 
purposes, treated as the "owner thereof in full."  This 
reinforces the notion that "use" must be understood to require a 
significant degree of control over the property, rather than 
mere presence on the property.  Indeed, it would be odd to treat 
a plumber or janitor as an owner of MBTA property merely because 
they service the property.  Such a result can be avoided by 
focusing on the requirement that the use include exercising a 
significant degree of control over the property in connection 
with a business for profit.  See Attorney Gen. v. School Comm. 
of Essex, 387 Mass. 326, 336 (1982) ("We will not adopt a 
literal construction of a statute if the consequences of such 
construction are absurd or unreasonable") 
 
7 Prior to 2013, § 24 did not include any exception for 
property used, leased, or occupied in connection with a business 
for profit, and the exemption was uniformly interpreted to 
17 
 
Taken as a whole, the phrase "used . . . in connection with 
a business conducted for profit" requires a significant degree 
of control over the property.  It also requires that the 
activity being conducted on the property be a business for 
profit, reflecting a level of control of not only the property 
but also the revenues being generated by the property.  When the 
business being conducted on the property not only provides 
services to the MBTA, but also engages in a business for profit 
with third-party customers and controls the profits from such 
business, it is exercising a much greater degree of control over 
the property and the revenues it may generate than a service 
provider. 
The janitor who cleans an MBTA station or the plumber who 
replaces a leaky pipe on MBTA property would not use MBTA 
property in connection with a business conducted for profit as 
 
"'encompass all the [MBTA's] real and personal property' 
including any property leased from the MBTA by a private, 
commercial entity, regardless of the purpose for which that 
property was used."  See Beacon S. Station Assocs., 85 Mass. 
App. Ct. at 306, quoting Assessors of Newton v. Pickwick Ltd., 
351 Mass. 621, 624 (1967).  In 2013, the statute was amended to 
add the exception at issue.  St. 2013, c. 46, § 50.  The 
addition of the exception to § 24 "explicitly narrow[ed] the 
exemption."  Beacon S. Station Assocs., supra at 308.  See 
Marshfield v. Springfield, 337 Mass. 633, 637-638 (1958) 
("Presumably some change of meaning was intended" by amendment 
to statute).  One effect of narrowing § 24's exemption is to 
place businesses that use MBTA property to conduct a for-profit 
business in the same competitive position as businesses that 
operate on private property. 
18 
 
those terms are properly understood under § 24.  Their degree of 
control over the property is too limited.  To perform the 
services requested of them, their physical control over the 
property is confined to the time and space needed to perform the 
services requested.  Their control over the revenues that may be 
generated by the property are also more limited.  They are not 
empowered to serve their own clients and retain the profits from 
those third-party transactions.  The revenues they receive from 
the MBTA are also defined by the service contract.  Contrast 
this with the owners of a for-profit coffee shop or restaurant 
operating inside an MBTA station.  They enjoy a much greater 
degree of physical control over the property, including the 
design and operation of their business.  They also charge for 
their own third-party customers, and do not just receive 
revenues from the MBTA.  Finally, they retain the revenues that 
may be generated from their right to use the property for their 
for-profit business.  If they are exempt from taxation, they 
also have an advantage over a similar coffee shop or restaurant 
operating on private property and subject to taxation.  A 
service provider is not similarly advantaged. 
ii.  Application of § 24 to Outfront.  Applying these 
principles to the instant case, Outfront is not just providing 
services to the MBTA, it is using the MBTA's property to conduct 
a business for profit.  Outfront's control over the property and 
19 
 
the revenues that may be generated by the property reflect this 
distinction.  Its exclusive physical control over the property 
is significantly greater than a service provider, such as a 
janitorial or maintenance company.  Outfront also conducts a 
for-profit business in which it charges third-party customers 
and retains the profits from such transactions, again reflecting 
its control of not only the physical property but also the 
revenues that may be generated from the property, thereby 
exercising a more comprehensive level of control of the property 
akin to an owner. 
More specifically, the agreement gives Outfront the 
exclusive right to advertise on existing signs and to advertise 
on new signs designed and installed by Outfront on MBTA 
property, and to contract with the private parties seeking to 
advertise on those signs.  Outfront also has the exclusive right 
to install, license, operate, and maintain telecommunications 
equipment on the MBTA signs, and to contract with those 
telecommunication companies. 
Further, Outfront is not paid a flat fee for the services 
provided.  Rather, Outfront is compensated through revenue that 
it generates from the MBTA signs and telecommunications 
equipment installed on the signs, and may reap significant, 
uncapped profits from such operations.  Outfront is not merely 
present on MBTA property to perform services for the MBTA.  
20 
 
Rather, it is using the MBTA signs to conduct a for-profit 
business. 
iii.  The board's decision in Ogden Entertainment Servs. 
vs. Assessors of Hadley.  Our interpretation here, particularly 
the distinction we draw between providing services to a public 
entity and operating a business for profit on the property, is 
informed by the board's analysis in Ogden Entertainment Servs. 
vs. Assessors of Hadley, App. Tax Bd. Nos. F238188, F242126, ATB 
2000-978 (Dec. 12, 2000) (Ogden decision), as the board 
interpreted "use" in a similarly worded statutory provision in 
connection with a for-profit business and drew a similar 
distinction.  As the board explained in that case: 
"Ogden [Entertainment Services (Ogden)] was engaged by 
. . . the owner of the property[] to perform certain 
managerial and administrative functions which the 
University [of Massachusetts (university)] would otherwise 
need to perform itself.  In this respect, the [b]oard found 
Ogden's relationship to the Mullins Center [at the 
university] to be like that of a janitor, plumber, food 
concessionaire or other independent contractor.  Surely, it 
could not reasonably be argued that a service provider 
. . . should be assessed a real estate tax based on the 
fact that it 'uses' the facility to make a profit."8 
 
Ogden decision, ATB 2000 at 987-988. 
Although we adopt the distinction drawn in the Ogden 
decision, we do not accept Outfront's argument and conclude that 
 
8 We note that there are many different types of food 
concessionaire arrangements, and we do not find that reference 
helpful for defining the difference between a service provider 
and a business operated for profit. 
21 
 
the result here is determined by that decision, as the facts are 
distinguishable.  Ogden fell on the service provider side of the 
line, or at least the board could so reasonably conclude.  AA 
Transp. Co., 454 Mass. at 118 (discussing deference owed to 
board's reasonable interpretation of tax law).  In particular, 
as explained infra, the revenue sharing arrangements differed 
significantly. 
More specifically, in the Ogden decision, the board 
construed G. L. c. 59, § 2B, which states that real estate owned 
by the Commonwealth, if "used in connection with a business 
conducted for profit or leased or occupied for other than public 
purposes," will be taxed as if the "user, lessee or occupant 
were the owner thereof in fee."  In that case, the university 
had entered into a management agreement with Ogden for Ogden to 
provide management services in conjunction with the university's 
operation of the Mullins Center.  Ogden decision, ATB 2000 at 
980.  The university used the Mullins Center for various 
university activities, including classes, sporting events, 
convocation ceremonies, theater productions, and concerts.  Id. 
at 980-981.  The Mullins Center also hosted non-university 
events such as professional concerts, magic shows, and wrestling 
matches.  Id.  The services Ogden provided included event 
scheduling, custodial and cleaning services, ticket sales, 
insurance, and security.  The management contract thus did 
22 
 
provide some substantial degree of control over the property to 
Ogden.  Id. at 980. 
The financial arrangement, however, was significantly 
different.  The university paid Ogden (a) a monthly flat 
management fee and (b) an "incentive fee" equal to thirty 
percent of revenues over $190,000 for non-university events held 
at the Mullins Center.  Id. at 982.  The incentive fee was 
capped so that Ogden would never receive more than twenty-five 
percent of gross revenue in excess of direct operating costs.  
Id.  All profits and losses, including all direct operating 
costs and taxes, from the operation of the Mullins Center 
"flow[ed] through [Ogden] to the [u]niversity."  Id. 
This, we conclude, is a key factual distinction between 
Outfront's and Ogden's contractual arrangements, and one that 
permitted the board to conclude that Outfront was using the 
property to conduct a business for profit, while Ogden was not. 
While Outfront must share a set percent of revenue with the 
MBTA, in addition to the guaranteed minimum amount, there is no 
cap on the amount of revenue Outfront can earn.  Further, 
whereas Ogden passed all profits, losses, costs, and taxes on to 
the university, Outfront must bear most of the costs related to 
the MBTA signs, including installation and maintenance, 
utilities, and taxes.  Thus, Outfront incurs both the risks and 
rewards of its operations as it only makes money to the extent 
23 
 
of any revenue it can generate from advertising or installing 
telecommunications equipment on MBTA property, and this revenue, 
while shared with the MBTA, is not capped.  Outfront shares 
fully in both the upside and the downside of the MBTA signs in a 
way that Ogden never did with the Mullins Center, and Outfront 
enjoys a significant level of control over the revenues to be 
derived from the property that Ogden did not possess.9 
In sum, we conclude that the board's Ogden decision and the 
instant case are reconcilable due, at least in part, to the 
different financial arrangements. 
iv.  Technical or common-law meaning.  We next address 
Outfront's contention that § 24 incorporates a specific, 
restrictive, common-law meaning for the term "use and occupancy" 
that requires a greater possessory interest in the property than 
that granted to Outfront.  For support, Outfront relies only on 
a few early Twentieth Century cases interpreting the meaning of 
 
9 Another example of a business that could be exercising 
significant control over a property but still providing services 
rather than using the property to conduct a for-profit business 
is a company hired to provide security services.  The security 
guards would likely have significant control over the property; 
for example, they might be able to eject or exclude certain 
people from the property.  But they would be doing so pursuant 
to a set fee-for-services agreement, not an agreement that 
allowed them to operate a for-profit business on the property 
under which they charged third parties and made profits from 
such charges.  At least a security company's control over the 
revenues that could be derived from the property would be 
significantly less than a company operating a for-profit 
business on the property. 
24 
 
"use and occupancy," apparently in the context of common-law 
pleading requirements.  See, e.g., Gaertner v. Donnelly, 296 
Mass. 260, 261 (1936) (explaining that claim for "use and 
occupation" is essentially claim for rent under demise, which 
requires proof of a landlord-tenant relationship10).  See E.G. 
Daher, H. Chopp, M.W. O'Connor, & R. Sayeg, Landlord and Tenant 
Law § 17:9 (3d ed. July 2023 update) (under current law, "[i]n 
order to maintain an action for use and occupation of land, 
evidence must be produced to establish the relationship of 
landlord and tenant . . . .  Something in the nature of a demise 
must be shown"). 
We discern no basis for concluding that the Legislature 
adopted this specific, restrictive common-law interpretation in 
§ 24.  We have been presented with no legislative history to 
that effect.  The cases cited also involve issues very different 
from the tax exemption in question here. 
Most importantly, the text itself is different.  Section 24 
does not refer to "use and occupation," rather it separates the 
words "lease, use, or occupy" with the disjunctive "or."  Use of 
the property alone is sufficient so long as it is in connection 
with a business for profit as described above.  Although a 
 
10 A demise is "[t]he conveyance of an estate [usually] for 
a term of years, a lease."  Black's Law Dictionary 544 (11th ed. 
2019). 
25 
 
significant level of control over the property is required, a 
formal lease is not.  Even in the older cases cited by Outfront 
the court recognized that the alleged tenants had a possessory 
interest; it just distinguished such possessory interests from a 
lease.  See Gaertner, 296 Mass. at 261-262 (defendant had only 
license to put sign on plaintiff's roof and right to "use" roof 
to maintain sign, but no landlord-tenant relationship existed); 
Jones v. Donnelly, 221 Mass. 213, 217-218 (1915) (no use and 
occupancy established where defendant "had merely a right or 
privilege to occupy the roof" and where agreement "conveyed no 
title or interest in the building or in any part of it"). 
d.  Essential government function.  Outfront also argues 
that the city is barred from taxing the MBTA signs because such 
taxes may reduce the amount of revenue the MBTA will earn from 
its contract with Outfront.  We conclude that the essential 
government function doctrine does not bar the city from taxing 
Outfront. 
The essential function of the MBTA is to provide mass 
transportation services.  Massachusetts Bay Transp. Auth. v. 
Somerville, 451 Mass. 80, 86 (2008) (Somerville).  See G. L. 
c. 161A, § 3 (i) (empowering MBTA "[t]o provide mass 
transportation service . . . on an exclusive basis, in the area 
constituting the authority").  Although taxing MBTA property 
when it is contracted out to private parties to operate 
26 
 
businesses for profit may affect the MBTA's negotiating power 
and thereby lower somewhat the revenues the MBTA would be able 
to receive from such private parties to support its provision of 
mass transportation services, such a possible reduction was 
certainly understood by the Legislature when it passed the 
specific exception to the MBTA's tax exemption.  Thus, it 
appears that the Legislature itself considered such an exception 
from the MBTA's exemption from taxation to be consistent with 
its essential function of providing mass transportation 
services. 
The essential government function doctrine prohibits the 
regulation of "entities or agencies created by the Legislature 
in a manner that interferes with their legislatively mandated 
purpose, absent statutory provisions to the contrary."  Greater 
Lawrence Sanitary Dist. v. North Andover, 439 Mass. 16, 21 
(2003).  As stated above, the essential function of the MBTA is 
to provide mass transportation services.  Somerville, 451 Mass. 
at 86.  We have also recognized that there is a "direct relation 
between the MBTA's provision of mass transportation services and 
the revenues that it must raise from nontransportation sources."  
Id.  Indeed, by law, the MBTA is required to maximize revenues 
from all nontransportation revenue sources before raising fares.  
See G. L. c. 161A, § 11.  Thus, "[r]evenue raised through 
advertisements is statutorily integrated with the MBTA's ability 
27 
 
to provide mass transportation services, its essential 
function."  Somerville, 451 Mass. at 87. 
That being said, the Legislature specifically carved out 
§ 24's exception from the MBTA's tax exemption.  See Somerville, 
451 Mass. at 86 n.8 ("The Legislature almost certainly would not 
intend to exempt an entity from a regulation where the statute 
authorizing the regulation expressly applies to the type of 
entity in question").  In so doing, the Legislature also 
certainly recognized that there might be some effect on the 
revenues that the MBTA will be able to generate from its 
property.  See generally Beacon S. Station Assocs., 85 Mass. 
App. Ct. at 308 (recognizing that 2013 amendment "explicitly 
narrow[ed] the exemption" in § 24).  Taxing a user, lessee, or 
occupant of MBTA property pursuant to § 24 may affect the 
negotiating power of the MBTA and thus potentially lower the 
total amount of revenue available to the MBTA.  This is because 
such a tax may affect the profits the private contractor will be 
able to generate from the property and, consequently, the amount 
they will be willing to bid for the property.  If any such 
reduction in revenues constitutes an interference with the 
MBTA's essential governmental function, as Outfront is 
apparently arguing, then the essential governmental function 
doctrine would eviscerate §24's express exception. 
28 
 
We cannot adopt such an interpretation of the essential 
government function doctrine.  Rather, we read the statutory 
scheme defining the rights and responsibilities of the MBTA, 
wherever possible, as a coherent, harmonious whole.  See Boston 
Police Patrolmen's Ass'n v. Police Dep't of Boston, 446 Mass. 
46, 50 (2006).  Here the Legislature has defined not only the 
essential function of the MBTA, but also its revenue generating 
requirements and the exception to the MBTA's exemption from 
taxation for business conducted for profit on MBTA property.  
Given these unambiguous and express provisions, we have no 
reason to conclude that the Legislature considered such a 
potential limited reduction in revenue generating capacity to 
constitute an interference with the MBTA's ability to perform 
its essential function of providing mass transportation service.  
Cf. Boston v. Massachusetts Port Auth., 364 Mass. 639, 654 
(1974) (in creating "comprehensive regulatory scheme" for 
reducing air pollution that explicitly applied to all State 
agencies, Legislature clearly intended air pollution regulations 
to apply to port authority despite general exemption from 
regulation conferred by enabling act). 
 
Our decision in Somerville, which Outfront relies on, is 
readily distinguishable.  In that case we were interpreting a 
statutory provision that expressly exempted the MBTA from the 
regulation in question, without any legislative exception to the 
29 
 
exemption.  Somerville, 451 Mass. at 85.11  To find an exception 
to the exemption would have required us to infer such an 
exception, which we declined to do.  Id. at 85-88.  See, e.g., 
Department of Community Affairs v. Massachusetts State Bldg. 
Auth., 378 Mass. 418, 432 (1979).  Here, in contrast, we are 
addressing an express legislative exception to an exemption.  As 
we made clear in Somerville, where the Legislature has expressly 
stated that the regulation at issue applies to the otherwise 
exempt entity, such regulation is generally permissible.  
Somerville, supra at 86 n.8.  The Legislature has itself refined 
the essential government function of the otherwise exempt 
entity. 
 
In the instant case, the Legislature has chosen to subject 
to taxation a particular use of MBTA property, that is, for a 
business conducted for profit.  Although this may affect the 
MBTA's negotiating positions and thereby limit somewhat the 
revenues that the MBTA may generate from its property, we cannot 
conclude that such a limitation, where expressly provided by the 
Legislature, interferes with the essential function of the MBTA, 
 
11 The statute at issue was G. L. c. 161A, § 3 (i), which 
states that the MBTA has the duty to "determine the character 
and extent of the services and facilities to be furnished, and 
in these respects their authority shall be exclusive and shall 
not be subject to the approval, control or direction of any 
state, municipal or other department, board or commission except 
the [MBTA's] advisory board" (emphasis added). 
30 
 
which is to provide mass transportation services.  Rather we 
conclude that the Legislature has deemed this particular use of 
the property to be subject to taxation, because such taxation 
does not interfere with the essential function of the MBTA. 
3.  Conclusion.  For the foregoing reasons, we affirm the 
decision of the board. 
So ordered.