Appeal, No. 212, March T., 1950, from order of Court of Common Pleas of Mercer County, June T., 1950 in Equity, No. 1, in case of Jay A. Minich et al. v. City of Sharon et al. Order reversed; reargument refused January 17, 1951.
Nathan Routman, City Solicitor, for appellant.
M. L. McBride, Jr., with him M. L. McBride and McBride & McBride, for appellees.
Before Drew, C.j., Stern, Stearne, Jones, Ladner and Chidsey, JJ.
OPINION BY MR. JUSTICE HORACE STERN
Plaintiffs are residents of the Boroughs of Mercer, Greenville and Grove City, Mercer County, respectively, but are employed by the Westinghouse Electric Corporation at its plant in the City of Sharon in that county. They have brought a bill in equity against the City of Sharon and the Westinghouse Electric Corporation seeking an injunction against their collecting from plaintiffs a wage tax imposed by the city so far as it is in excess of the rate of 5 mills on each dollar of wages earned by them at the Westinghouse plant. The court below -- in our opinion erroneously -- issued the injunction.
On June 27, 1949 the Board of School Directors of the School District of the City of Sharon adopted a resolution imposing a tax of 5 mills per dollar of income earned by residents of the School District for the period January 1, 1950 to July 2, 1950. On January 10, 1950 the Council of the City of Sharon enacted an ordinance assessing a tax of 10 mills per dollar of income earned by residents of the city after January 1, 1950, and also of 10 mills per dollar on income earned after that date by non-residents of the city for work done or services performed in the city. Under this ordinance the City of Sharon is attempting to collect the 10 mills tax from such non-residents working in the city as are not subject to an income or wage tax at their places of residence, but only a 5 mills tax from residents of the city because of the latter being compelled to pay also the 5 mills tax to the School District of the City of Sharon, which School District is coterminous
with the city. Plaintiffs allege that this works an illegal discrimination in favor of residents of the city as against such non-residents employed there, being in violation of Article IX, section 1 of the Constitution of the Commonwealth which provides that "All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax." They assert, therefore, that they should not be required to pay a tax of more than 5 mills, the same as is paid by residents of the city.
The Act of June 25, 1947, P.L. 1145, gave authority to certain political subdivisions to levy such taxes on persons, occupations and subjects within the limits of such political subdivisions as they should determine, provided only that such taxes should not be imposed on any person, occupation or subject, which then was or thereafter became subject to a State tax. It is under the authority of that Act that these taxes were imposed by the City of Sharon and by the School District of the City of Sharon. Section 5 of the Act provides that "Payment of any tax on... wages... to a political subdivision by residents thereof pursuant to an ordinance or resolution passed or adopted under the authority of this act shall be credited to and allowed as a deduction from the liability of such persons for any other like tax... on... wages... imposed by any other political subdivision of this Commonwealth under the authority of this act." This section of the Act was construed by the Superior Court in Glen Alden Coal Company v. Thomas, 165 Pa. Superior Ct. 199, 67 A.2d 754, as meaning that a taxpayer may credit any wage tax paid by him to the borough or school district of his residence against any tax levied by a municipality of which he is not a resident but in which his wages are earned, but may not assert such a credit against a tax levied by another political subdivision of which he is also a resident. As applied to the present situation, therefore, it
is clear that the City of Sharon must allow a credit as against its 10 mills tax to any non-resident paying a tax on the same wages to another political subdivision of which the taxpayer is a resident. As far as plaintiffs in the present proceedings are concerned, however, it is not claimed that they are taxed on their wages earned in the City of Sharon by the respective political subdivisions of which they are residents, and, therefore, they ...