FARM TAXES IN MASSACHUSETTS 107 



Table 12. — Property Taxes Paid by Corporations in Massachusetts Cities, 



1925a 



0, As reported by Boards of Assessors. 



Assessors in at least five cities are finding it profitable to use engineering 

 methods in factory valuations. Several cities are beginning to use accurate 

 measurements of square footage, cost of labor and building materials, origi- 

 nal costs of construction, as well as replacement cost, together with the best 

 available information on depreciation charges for various types of buildings 

 and machinery used for different purposes. These efforts are resulting in im- 

 proved assessments. Small towns have no facilities for such methods; the 

 assessors give only a small part of their time to actual assessment, and fac- 

 tory and corporation assessments in general have been made according to 

 what the traffic would bear, or by taking a figure furnished by the corpora- 

 tion. 



Available figures indicate tliat under these circumstances, corporation assess- 

 ments are at a higher average percentage of actual value than residential 

 property. Years ago this was not the case. According to a corporation tax 

 expert, fifteen or twenty years ago a great deal of corporate property was 

 assessed at not more than 50 per cent or 60 per cent of its fair value. This 

 was particularly true of public utility companies having wire, pipes, track 

 and other equipment, the value of which depended to a large extent upon 

 the earnings of the company. At the present time assessed valuations of many 

 public utilities average 90 per cent of their book values, which in many cases 

 include the original cost plus any additions without deducting depreciation. 

 The ratio of assessed values to book values of real estate and machinery for 

 nine large gas and electric companies in 1925 was 94 per cent. Actual values 

 of such property are of course difficult to determine. In fact, the value of all 

 factory real estate and machinery is difficult to determine, since it depends 

 upon the earnings of the company, which in turn depend upon successful 

 management. The textile companies in several cities claimed overassessment 

 during the years from 1920 to 1924 and in actions for abatements it was 

 found that several companies were assessed at a figure 20 to 25 per cent 

 above the fair value of their real estate and machinery. 



Sales data collected by the Board of Assessors in Springfield show that 

 business property is assessed at about 80 per cent of its sale value. Nineteen 

 parcels in the business section were sold for $3,084,000; the assessed value was 

 $2,467,000, or 79.98 per cent of the selling price. The ratio of assessed to sale 

 value varies of course with the property. A few parcels were assessed for 

 an amount approximately equal to their sale value. Other parcels were 

 assessed as low as 50 to 60 per cent, but most of the assessments ran from 

 70 to 85 per cent of the sale value. 



