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Downtown Boston landlords could be on the hook for new taxes

| Sep 7, 2012 | Tax Controversies

Changes in the law regarding tax liens are coming to the Boston, Massachusetts, area. Landlords in downtown Boston’s Business Improvement District used to have a choice if they wanted to pay a voluntary tax that was based on their real estate assessment or if they preferred not to pay it. However, new changes now require landlords to pay this tax. Additionally, the tax will now be charged on a retroactive basis.

Landlords who chose not to pay into the BID program will now have to pay the tax or face stiff consequences in the form of a tax lien being placed on their property in 2015. The relevant area that applies to the tax lien situation includes an area of 34 blocks in the Downtown Crossing and adjacent areas. It also includes areas of the Theatre District and the Financial District. There are currently 308 property owners.

Of the property owners, 251 have already voluntarily participated in the program while 57 opted out. The BID requires a fee to be charged on the commercial properties. Although the fee is used for taxation purposes, it also provides the property owners with maintenance and provides a network for property owners to learn about services, special events and security. This project provides $1 million to the fund that the city collects from property owners in the area.

The mayor of Boston paints the issue as one of fairness: that everyone should share the burden and contribute. However, not all business owners may feel this way. It remains to be seen if any landlords will speak out against the new tax requirements or draw the city into a legal battle.

Source: Boston Business Journal, “Landlords can BID adieu to choice,” Thomas Grillo, Aug. 27, 2012

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