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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.