3 Mass. Colleges Sue State Over Environmental Cleanup Tax Credits

Three Massachusetts colleges have sued the state Department of Revenue, claiming the agency unfairly denied them millions of dollars in tax credits for environmental cleanup work done on contaminated properties.

Northeastern University, Boston University, and Wellesley College said the state essentially changed its own rules when it rejected the schools’ applications for the credit, in a complaint filed in Superior Court.

The state agency said it had no comment when contacted by The Boston Globe.

The lawsuit centers on the state’s Brownfields Tax Incentive program, which offers tax credits to property owners who perform environmental cleanup work on former commercial and industrial properties left contaminated by the previous occupants.

The program was created in 1998. In 2006, the Legislature amended it to allow nonprofit organizations, such as colleges and universities, to claim the credit. Nonprofits do not pay taxes but can claim the credits and sell them to companies or individuals looking to reduce the taxes they owe.

Northeastern applied for $6.4 million in credits; Wellesley requested $6.25 million in credits and BU applied for $4.4 million in credits.

The schools applied in late 2012 and early 2013. They included in their calculations costs incurred before the law was changed specifying that nonprofits may not claim the brownfields credit for work started before June 24, 2006, under the belief that these expenses would be eligible for the credit.

Other nonprofits had successfully claimed the credit for work conducted in that period, according to the complaint.

“The university has incurred expenses to clean up environmental contamination,” BU spokesman Colin Riley said. “The statute says the university is entitled to apply for and receive the tax credit.”