A judge for the Suffolk County (MA) Superior Court ruled that the Massachusetts Department of Revenue (DOR) improperly denied an application for state Brownfields Tax Credits, finding that the agency exceeded its statutory authority by overriding the judgment of the Licensed Site Professional (LSP) of Record.

 The Massachusetts Brownfields Tax Credit is a state program aimed at encouraging the cleanup and redevelopment of contaminated properties, or “brownfields,” by providing tax credits to businesses that incur costs in remediation efforts. The tax credit is meant to offset the significant costs associated with environmental cleanup. In this way the credit supports economic development as well as environmental cleanup. LSPs are environmental professionals licensed by the state to manage and oversee cleanups under the oversight of the Massachusetts Department of Environmental Protection (DEP).

 The Memorandum of Decision issued on January 20, 2026 declared that the plaintiff, Boston Seaport M1 and M2 Land, LLC, is entitled to a state Brownfield credit of $15,347,296. The case number is 2584-00039-BLS2.

 The widely watched case focused on whether the DOR had the authority under the statute to review (second-guess) the applicant’s costs. The applicant (plaintiff) completed a remediation pursuant to the state’s Massachusetts Contingency Plan (MCP) regulations and applied for a tax credit based on its costs incurred to complete the cleanup, which was overseen by the applicant’s Licensed Site Professional (LSP). DOR retained its own LSP to review the costs. The DOR’s review determined that the applicant could have completed the cleanup work in a different manner at a lower cost. DOR then proposed to grant a credit in an amount based on the estimated cost of the hypothetical cleanup as calculated by its consultant.

 DOR has appealed the ruling.

 This case follows a 2017 precedent, Abodez Acorn CW LLC v. Commissioner of Revenue, in which the Court ruled that the DOR could not overrule the judgment of the LSP. The plaintiff in the Boston Seaport case argued that DOR was bound by this previous decision, highlighting the similarity of the issues at stake.

 The ultimate outcome of the Boston Seaport case has implications for many other Brownfield tax credit applications as it has become customary for DOR to assert that the remediation process followed included unnecessary work and therefore refuses to grant a credit, or only grant a partial credit, based on its determination – even when its decision was in conflict with the LSP of Record. DOR believes that its role in reviewing costs allows it to reduce the amount of credit even when its finding contradicts the work actually completed.

 The core issue of this dispute appears to be the limits and parameters of DOR’s role in reviewing Brownfields Tax Credit applications. Specifically, can DOR challenge and overrule the determinations made by the site LSP-of-Record? Critically, this includes questions as to what steps are necessary to achieve a Permanent Solution under the MCP regulations (310 CMR 40.0000) and what costs qualify as net response and removal costs under the Brownfields Tax Credit statute (set out in M.G.L. c. 62 §6(j) and M.G.L. c. 63, § 38Q) and regulations (830 CMR 63.38Q.1).

 The Brownfields Tax Credit regulations define net response and removal costs as “the applicant’s total Eligible Costs less any reimbursement” and further define Eligible Costs as “costs incurred by an Eligible Person in performing Response Actions for the purpose of achieving a Permanent Solution or Remedy Operation Status (ROS) in compliance with M.G.L. c. 21E.” The regulation states that “A cost will be considered to be incurred for the purpose of achieving a Permanent Solution or ROS if it was (1) reasonable and (2) for Response Actions that are a direct and necessary part of attaining such Permanent Solution or ROS.”

 DOR staff have indicated that they see the Department’s role is determining whether the work actually performed meets those definitions (reasonable, direct, and necessary) and thus eligible for the tax credit, Department managers have asserted that they believe they are not bound by the LSP’s decisions or the work that the LSP directed to be completed to achieve a Permanent Solution or ROS, but rather are empowered to come to their own independent decisions about what work qualifies for the credit.

 Both the 2017 Abodez Acorn case and the 2026 Boston Seaport case are animated by this central stance. In both cases, however, the courts have found that DOR exceeded its statutory authority by second-guessing and effectively overruling the LSP-of-Record and substituting its judgments for the judgments of the LSP and subsequently denying a tax credit for what were deemed by the applicants to be eligible costs.

 In the case of Boston Seaport, Judge Squires-Lee’s Memorandum of Decision sharply criticized the DOR’s interpretation of the statute, stating:, “The DOR construes “expenses paid by the taxpayer for the purpose of achieving a Permanent Solution in compliance with chapter 21E as meaning “the minimum necessary expenses paid by the taxpayer for the purpose of achieving a Permanent Solution. . . based on a post-remediation environmental audit performed by the DOR. Such a construction – adding terms and responsibilities not provided in the statute – is not “statutory construction” entitled to deference, it is invention.” This statement underscores the court’s view that DOR’s approach added terms not included in the statute, which is not permissible under legal principles of statutory construction.

 DOR has appealed the Superior Court’s decision and it will be interesting to anticipate the Appeals Court’s finding. The outcome of the Boston Seaport case could have significant implications for other Brownfields Tax Credit applications. If the Appeals Court upholds the Superior Court’s ruling, it may limit the DOR’s ability to second-guess the judgments of LSPs and potentially open the door for a more predictable and fair application process. The case also highlights the ongoing legal tension between state agencies and environmental professionals regarding the interpretation of cleanup costs and eligible expenses under the Brownfields Tax Credit program.