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Southeastern Sand & Gravel, Inc. v. Commissioner of Revenue
Citations: 429 N.E.2d 714; 384 Mass. 794; 1981 Mass. LEXIS 1530
Court: Massachusetts Supreme Judicial Court; December 23, 1981; Massachusetts; State Supreme Court
Southeastern Sand and Gravel, Inc. sought classification as a manufacturing corporation for tax purposes but had its application denied by the State Tax Commission, which is now the Department of Revenue. The taxpayer appealed this decision to the Appellate Tax Board, which upheld the denial, concluding that for the year 1977, the taxpayer did not qualify as engaged in manufacturing under Massachusetts General Laws (G.L.) c. 63, § 38C, and c. 59, § 5, Sixteenth. The Board also dismissed the taxpayer's petition for the year 1976 due to lack of jurisdiction. The taxpayer's operations involve excavating gravel, crushing it, and screening it, but it does not manufacture bricks or concrete blocks; instead, it sells crushed stone to others who produce blocks and asphalt. The court noted that while the definition of "manufacturing" can vary, the taxpayer had not proven it was engaged in manufacturing since the process described does not result in a transformation into a distinctly new product. The court referenced prior cases to establish that quarrying and crushing stone do not constitute manufacturing, affirming the Board’s decision was supported by substantial evidence and free from legal error. Reliance on a previous case regarding processing materials for sales tax was deemed misplaced, as the issues at hand pertained to local taxation criteria. The taxpayer's request for an exemption was denied because it did not meet the legal criteria for such relief. An exemption is granted only when the property clearly aligns with specific legislative language, as established in Children's Hosp. Medical Center v. Assessors of Boston. The board noted that the Commissioner of Revenue issued a classification list on July 16, 1976, under G.L. c. 58, § 2, which designated corporations engaged in manufacturing. The taxpayer submitted its application for classification on August 18, 1976, but this was outside the required timeframe, as applications were mandated to be filed within thirty days of the classification list's distribution. Consequently, the board had no jurisdiction to consider the late application. Even if the board had erred in asserting a lack of jurisdiction, the taxpayer's business operations in 1976 were identical to those in 1977, when the board determined the taxpayer was not engaged in manufacturing. The Appellate Tax Board's decision was upheld.