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Steampunk for the win: Court upholds 19th-century doctrine of 'great integral machines,' says Boston can't tax the steam pipes under downtown

The Supreme Judicial Court ruled today the city of Boston was wrong to try tax Veolia Energy's network of steam pipes through Boston Proper, ruling that, collectively, they are parts of a "great integral machine," which have been exempt from taxation since at an 1866 ruling.

The ruling means Boston assessors will have to repay Veolia the roughly $2 million in "personal property" taxes they had levied on the value of steam pipes for the 2014 tax year. However, the company still owes about the same amount in the tax for the following tax year, because it applied for an abatement the wrong way, the Massachusetts Appeals Court ruled earlier this year.

City assessors said they decided to tax the pipes because the state law on personal property taxes specifically excludes "pipes" from the ban on machinery taxation.

But in its ruling, the state's highest court ruled that the steam pipes were not simply passive vessels but are part of a network designed to generate the final steam product at customer sites. In other words, they are part of a big old steam machine.

To reach that conclusion, the court first had to consider and explain in some detail the complexities of the steam network - which more than 250 Veolia customers use for both heating and cooling as well as sterilization.

The networks operate together to balance customer load and steam generation across the generation facilities to ensure equivalent rates of production and consumption. The steam is stored and transported through pipes within the networks. By design, these pipes expand, contract, and move to withstand pressure and heat fluctuations. Also, they are equipped with valves to control pressure, to shed condensate (steam that has returned to liquid state), and to direct the flow of steam. ...

Once steam reaches a customer's site, a pressure reduction valve reduces that pressure to assure safety, to comply with regulatory requirements, and to conform to customer equipment compatibility and use requirements. After a customer uses the steam, the networks condense it into condensate, some of which the networks return to the generation facilities through condensate-return lines for further steam production.

And all this is done under monitoring by Veolia workers, via "a centralized supervisory control and data acquisition system."

The court credited a Veolia manager, who concluded that "the steam "is not a finished product until it's delivered to the customer through their control valves and provided to them for use in their energy services."

And that brought the justices to Commonwealth vs. Lowell Gas Light Co., an 1866 decision by their predecessors, who faced a similar question involving a gas company's mains under city streets - and who ruled that all those pipes were part of a "great integral machine:"

They constituted a part of the machinery by means of which the corporate business was carried on, in the same manner as pipes attached to a pump or fire engine for the distribution of water, or wheels in a mill which communicate motion to looms and spindles, or the pipes attached to a steam-engine to convey and distribute heat and steam for manufacturing purposes, make a portion of the machinery of the mill in which they are used. Indeed, in a broad, comprehensive and legitimate sense, the entire apparatus by which gas is manufactured and distributed for consumption throughout a city or town constitutes one great integral machine, consisting of retorts, station-meters, gas-holders, streetmains, service-pipes and consumers' meters, all connected and operating together, by means of which the initial, intermediate and final processes are carried on, from its generation in the retort to its delivery for the use of the consumers.

In 1956, the court issued a similar ruling in a case involving Boston assessors and Boston Gas, and then again in 1978, in a case involving the Lowell Gas Co.

Today's court noted that the legislature had never tried to change the "great integral machine" doctrine laid down by their predecessors and that they saw no reason to do so, either.

The assessors' argument that the doctrine was effectively abrogated by the Legislature's subsequent addition of "poles, underground conduits, wires and pipes" to the list of exceptions from the exemption, which already included real estate and machinery used in manufacture, is belied entirely by the fact that this court continued to apply the doctrine notwithstanding the change.

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PDF icon Complete Veolia ruling135.22 KB


eerie wording. dreamfall: chapters also has great integral machine powered by steam used for mind control:

It's a sign of legislative failure when courts are forced to struggle to interpret and apply 150 year old laws. In a better world, the legislature would reexamine the issue, and amend old laws for clarity, instead of forcing judges to scratch their heads and come up with an answer.

Net neutrality is an extreme example of this problem. We're screaming for the FCC to apply telecom laws passed in 1934 (a time when some telephones still used manual switchboards) to the Internet. That's messed up.

I read the 1866 Lowell decision (linked in the story). It really was surprisingly similar to today's ruling in terms of the issues it discusses.


Adam is right. This is actually a sign of the law’s vitality, and the fact that it is applicable today (subject to reasonable debate in the courts) demonstrates the flexibility and continued viability of our system.

you steam a good ham.


on where these pipes run and what kinds of businesses use them?

There's one on Boylston near Arlington, for example. Downtown office buildings (the older the more likely) and hotels are among the customers. The company has a prominent plant on Kneeland, just outside South Station.

thanks for the link. A very interesting read.

Looks like circular logic or something..."assessors say we're getting it wrong, but if that is true, we've been getting it wrong for years, so ergo we must be getting it right. Q.e.d."

Today's court noted that the legislature had never tried to change the "great integral machine" doctrine laid down by their predecessors and that they saw no reason to do so, either.

Hopefully they do.
There's no reason why Veolia shouldnt have to pay taxes.

Straight property taxes. You can see how much on the assessors' pages for their plants on Kneeland and Scotia streets. It's way less than they were assessed in "personal property" taxes on the pipes, but they're not getting off tax free.