Appeal, No. 122, Oct. T., 1954, from decree of Court of Common Pleas of Blair County, 1952, in Equity, No. 1623, in case of Radio & Motor Service, Inc. v. W. Blair Dunn, Tax Collector, and City of Altoona. Decree affirmed.
Samuel H. Jubelirer, City Solicitor, for appellants.
James W. Nelson, with him Nelson & Campbell, for appellee.
Before Rhodes, P.j., Hirt, Ross, Gunther, Wright, Woodside and Ervin, JJ.
[ 177 Pa. Super. Page 577]
The plaintiff, Radio and Motor Service Inc., brought this action in equity to enjoin the City of Altoona from collecting a mercantile tax for the year 1952. This tax was levied by the city under an ordinance enacted on the authority of the Act of June 25, 1947, P.L. 1145, 53 PS §§ 2015.1-2015.8. The Act authorizes certain political subdivisions, including cities of the third class, to "levy, assess and collect or provide for the levying, assessment and collection of such taxes on persons, transactions, occupations, privileges, subjects and personal property within the limits of such political subdivisions, as they shall determine..." The taxing authority, thus delegated, was subject to certain stated exceptions, only one of which, referred to infra, is material
[ 177 Pa. Super. Page 578]
to the issues in this appeal. After hearing, the chancellor concluded that the ordinance violated both the terms of the above enabling act and the tax uniformity provision of Article IX, Section 1, of the Constitution of the Commonwealth. The court in banc dismissed exceptions to the findings, conclusions of law and the decree nisi of the chancellor, and enjoined the City of Altoona from the imposition and collection of any tax under the provisions of the above ordinance.*fn1
On March 16, 1948, Altoona, a city of the third class enacted its Ordinance No. 3359, levying an annual mercantile tax "upon all persons, firms, companies and corporations engaged in wholesale or retail vending of goods, wares, and merchandise." The ordinance, later amended, divided the persons subject to the tax into three classes as follows: (1) Wholesale and retail vendors or dealers, who had been in business for the entire preceding year, were taxed at specified rates based upon the total gross business transacted during the previous calendar year; (2) Dealers who had been in business less than one full year were taxable on the basis of the gross volume of business for the first month in which they were engaged in business, multiplied by twelve. (3) A taxpayer who embarked in business during the tax year was required under the ordinance to compute his tax on the gross amount of business transacted during the first month, multiplied by the number of months remaining in the calendar year. Radio and Motor Service, Inc., is within the first classification
[ 177 Pa. Super. Page 579]
under the ordinance of those subject to the tax. Plaintiff corporation had been in business for a number of years and throughout the whole of the year 1952. The plaintiff in the court below took the position that the ordinance violates the above uniformity requirement of the Constitution in that the method of computing the tax produced arbitrary, discriminatory and unjust results; and plaintiff contended also that the ordinance is ineffective because in violation of the provision of Section E(b) of the 1947 enabling Act.
In Allentown Sch. Dis. Mer. Tax Case, 370 Pa. 161, 167, 168, 87 A.2d 480, the Resolution of the School District was not dissimilar in pattern from the ordinance in the instant case. It divided wholesalers and retailers into four different classes: "(a) persons who have commenced business at least one full year prior to the fiscal year commencing July 1, 1951; (b) persons who have commenced business less than one full year prior to the fiscal year commencing July 1, 1951; (c) persons who commence business subsequent to July 1, 1951, or any succeeding tax year, and (d) persons who are engaged in a temporary, seasonal or itinerant business." And in referring to this classification provision of the Resolution, the Supreme Court speaking through Mr. Justice BELL said: "Article IX, section 1, of the Constitution of Pennsylvania, provides, 'All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws;...' This means that the classification by the legislative body must be reasonable ...