On May 15, the Massachusetts Supreme Judicial Court (SJC) unanimously upheld the tax-exempt status of conservation land used for charitable purposes by Ropes & Gray client the New England Forestry Foundation (NEFF). The SJC rejected a decision of the Massachusetts Appellate Tax Board that allowed the Town of Hawley to tax a 120-acre parcel of protected conservation land that NEFF had purchased to complement and buffer the Dubuque State Forest in western Massachusetts. The appeal raised novel questions regarding whether land conservation constitutes a “charitable” purpose and how actively a conservation organization must “occupy” their protected lands in order to qualify for tax-exempt status.
In a landmark decision and a sweeping victory for NEFF—one of the oldest and largest forestland conservation organizations in New England—the SJC held that land conservation is a charitable and publicly beneficial purpose in view of its contributions to the environmental sustainability, natural beauty and public health of the state. According to the SJC, “[A]s the science of conservation has advanced, it has become more apparent that properly preserved and managed conservation land can provide a tangible benefit to a community even if few people enter the land.” The SJC further held that that NEFF qualifies for a charitable tax exemption by using the Hawley property in furtherance of its conservation goals, particularly by placing it under a professional forest management plan, engaging in sustainable forestry, allowing the public onto the land for recreational purposes and acting as an “essential partner” in the state’s own conservation efforts.
The SJC’s decision is a victory for conservation efforts in Massachusetts and a watershed judicial endorsement of the broad environmental benefits of land protection. More generally, the opinion is an important affirmation of the right of Massachusetts charities, including colleges, hospitals, museums and churches, to self-determine how best to use their property in furtherance of their charitable purposes. The decision shields conservation organizations from potentially large tax bills each year and allows donors who contribute land or financial support to conservation organizations to be confident that their contributions will support conservation goals, rather than be used to pay local tax bills.
The Ropes & Gray team was led by Washington D.C.-based partner Douglas Hallward-Driemeier, who heads the firm’s appellate and Supreme Court practice and Boston-based litigation associate Jesse Boodoo.
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