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Solar taxation case is watched; State law on assessment being argued.

Byline: Donna Boynton

WESTBORO -- An 856-panel solar array on Milk Street is at the center of a legal test case regarding the taxation of solar panels.

Under state law, solar panels can be tax-exempt for up to 20 years if used as a primary or auxiliary energy source.

Forrestall Enterprises Inc. owns the solar panel array at 113 Milk St. Forrestall Enterprise's principal owner is Westboro resident Bruce Forrestall, who also has an ownership interest in four other local properties that benefit from the energy and the net metering credits generated at the Milk Street site.

The Board of Assessors has assessed a property tax against the solar array, saying that it does not meet the criteria to be tax-exempt because it does not supply power to a building on, or adjacent to the Milk Street solar panels. Instead, the power is sold to the grid and the net metering credits are applied to other local taxable properties

Forrestall Enterprises appealed to the Massachusetts Appellate Tax Board.

"This is the first time that a full legal analysis has been done in the Commonwealth,'' said Mark J. Defrancisco, chief counsel for the Massachusetts Appellate Tax Board. "There are a number of appeals pending, but this is the first time one has gone to trial and a decision has been issued.''

The state found in favor of Forrestall Enterprises. A formal written decision has not yet been issued.

Gregory Franks, town counsel for Westboro, explained: "In this case, this particular taxpayer has a solar array and sells power to National Grid under a net metering credit deal. The electricity is sold to National Grid, he get the credits and he can assign the credits to any entities he wants.''

Neither Mr. Forrestall nor Kenneth J. Mickiewicz, the Boston-based attorney who represented Forrestall Enterprises before the state appellate tax board, could be reached for comment.

The solar panels began producing electricity in 2011, and the town assessed $25,290.93 in personal property taxes on the structures in fiscal year 2012, and $14,196.58 fiscal year 2013. Forrestall Enterpirses applied to the town for an for an abatement each year and was denied for both.

According to the statement of facts in the legal briefs filed as part of the case, the energy produced at the Milk Street site is applied to Mr. Forrestall's other taxable properties in town: about 55 percent of the energy credits are allocated to eight commercial and residential condominiums at 17 South St.; 23 percent are allocated to Westboro Automotive Service Inc. at 128 Turnpike Road; 19 percent to Car Wash Detailing of Westboro Inc. at 126 Turnpike Road; and 3 percent to Mr. Forrestall's home.

None of the properties receiving the allocated credits are on or adjacent to the Milk Street land where the panels are located, however, Mr. Forrestall has an ownership interest in all of the properties receiving the credits, according to case filings.

The town and Forrestall Enterprises are at odds over a clause in Massachusetts General Laws which states that solar panels that provide power to other taxable property can be exempt from taxation for 20 years.

The so-called Clause 45 reads: "A solar or wind powered system or device which is being utilized as a primary or auxiliary power system for the purpose of heating or otherwise supplying the energy needs to property taxable under this chapter provided, however, that the exemption under the is clause is only allowed for 20 years from the installation date.''

Mr. Mickiewicz argued in a written brief that the clause places no restrictions or limits on size, capacity, costs, ownership or location.

"To require that the array be located on the same property impermissibly requires adding words which the Legislature did not see fit to include in the statutory exemption,'' Mr. Mickiewicz wrote. "The Assessor's interpretation requires a violation of a clear principle of Massachusetts law; that words will not be added to a statute that the Legislature could have chosen to include. Without adding words, the Assessor's denial is beyond the text of the exemption and its interpretation does not follow at all from the statute as written, and is unreasonable.''

The solar array is located on five acres that contain significant wetlands; the solar array is on all of the dry land and "could not physically provide electricity to any other structure on the property, Mr. Mickiewicz added. He also noted that the power credits are applied to Mr. Forrestall's other properties in town

The town argues that since the solar panels generate electricity that is sold to the grid and not directly used to supply power to a structure on or adjacent to its locations does not qualify the solar panel so receive an exemption.

"Forrestall's solar panel system cannot be shown to be the primary or auxiliary power source for any property,'' according to a brief filed on behalf of the town by Kenneth W. Gurge, special counsel from Leominster hired by the town to handle the litigation. "Instead, it is the source of remuneration, in the form of credits, received for the electricity Forrestall 'sells' to National Grid. The generation and selling of electricity is not the same as the generation and utilization of electricity to supply the heating or energy needs of a particular piece of taxable property.''

Mr. Gurge further argued that the clause in question was enacted in 1975 during that decade's energy crisis.

"Both related legislative history and (a) subsequent commentator examining the issue indicate that the legislature's focus at the time of the enactment of clause 45 was directed toward exemption of residential or home-based alternative energy sources.

The town has not made a decision if it will appeal, as it does not know the reasoning behind the ruling, said Mr. Franks, the town counsel.

Contact Donna Boynton at or follow her on Twitter @DonnaBoyntonTG
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Title Annotation:Local
Author:Boynton, Donna
Publication:Telegram & Gazette (Worcester, MA)
Date:Jun 29, 2014
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