Court Opinion

ID: 9961992
Source: CourtListenerOpinion
Date Created: 2024-04-22 14:05:12.584322+00
Date Added: 2024-06-11T08:19:38.481468
License: Public Domain

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revision and are superseded by the advance sheets and bound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

     10A 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.