Appeal, No. 31, May T., 1953, from decree of Court of Common Pleas of Dauphin County, 1952, in Equity, No. 2020, Commonwealth Docket No. 64, in case of Roy Stone Transfer Corporation v. Otto F. Messner, Secretary, Dept. of Revenue, and Weldon B. Heyburn, Auditor General, Commonwealth of Pennsylvania. Decree reversed.
Frank A. Sinon, with him Rhoads, Sinon & Reader, for appellant.
Edward Friedman, Deputy Attorney General, with him Frank F. Truscott, Attorney General, for appellees.
J. Harry LaBrum, with him James M. Marsh and Conlen, LaBrum & Beechwood, for Spector Motor Service, Inc., amicus curiae.
H. Ober Hess, with him Robert R. Batt, William R. Spofford and Ballard, Spahr, Andrews & Ingersoll, for amici curiae.
Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.
OPINION BY MR. JUSTICE BELL
The plaintiff,*fn1 a Virginia corporation with its principal office located at Martinsville, Virginia, is engaged in the business of transporting property as a common carrier exclusively in interstate commerce. The defendants are the fiscal officers of the Commonwealth. Plaintiff engages in interstate transportation over irregular routes, pursuant to a certificate of public convenience issued by the Interstate Commerce Commission; and carries on no activities in this Commonwealth other than interstate commerce.
Plaintiff makes deliveries by truck of interstate shipments to points within Pennsylvania, and at times picks up property here for delivery outside of the Commonwealth. Plaintiff has no tangible or intangible property in Pennsylvania; no office or terminal is maintained
in the Commonwealth; it pays no wages and has no payroll in Pennsylvania; and there are no employees of the plaintiff doing any kind of work in this State except those engaged in operating plaintiff's trucks. No contracts, orders or solicitations for the transportation of property of any kind are made or accepted within the Commonwealth and no payments for transportation or services rendered are received by the plaintiff in Pennsylvania.
Plaintiff filed a bill in equity to restrain the officers of the Commonwealth from enforcing the Corporation Income Tax Law of August 24, 1951, as reenacted and amended by the Act of December 27, 1951,*fn2 because it violated several provisions of the Constitution of the United States and of the Constitution of Pennsylvania. Defendants filed an answer in the nature of a demurrer, admitting all the facts but denying that the Act was unconstitutional. The lower Court sustained the demurrer and dismissed plaintiff's bill.
The first and most important contention is that the Act violates the Interstate Commerce Clause, Article I, § 8, of the Constitution of the United States.
The Corporation Income Tax Law of 1951 is a "catch-all" Act and seeks to impose (what it calls) a property tax upon the income of all corporations derived from the ownership of property, tangible or intangible, located or having a situs in this Commonwealth, or the performance of activities carried on within the Commonwealth regardless of whether carried on in intrastate or interstate commerce. Section 3 of said Act provides: "Every corporation carrying on activities in this Commonwealth*fn3 by or in the name of itself or any person, partnership, joint-stock association
or corporation shall be subject to and shall pay a State property tax on net income derived from sources within this Commonwealth at the rate of five per centum per annum upon each dollar of such net income received by and accruing to such corporation...: Provided, however, That such net income shall not include income for any period for which the corporation is subject to taxation under the Corporate Net Income Tax Act, approved the sixteenth day of May, one thousand nine hundred thirty-five (Pamphlet Laws, two hundred eight), as reenacted and amended, according to or measured by net income.
"Except as otherwise provided in this section, the tax hereby imposed shall be in addition to all taxes now imposed on any corporation ...