Appeal, No. 224, April T., 1956, from judgment of County Court of Allegheny County, 1953, No. A1360, in case of Paper Products Company, Inc. v. The City of Pittsburgh et al. Judgment affirmed in part and reversed in part.
Kim Darragh, for appellant.
Oscar G. Peterson, Assistant Solicitor, with him Mortimer B. Lesher, Solicitor, for School District of Pittsburgh, appellee.
J. Frank McKenna, Jr., Solicitor, and Albert D. Brandon, Assistant Solicitor, for City of Pittsburgh, appellee.
Before Hirt, Gunther, Wright, Woodside, and Carr, JJ. (rhodes, P.j., and Ervin, J., absent).
[ 183 Pa. Super. Page 236]
The question before us in this appeal from the County Court of Allegheny County is whether the appellant made certain sales as a "wholesale dealer or vendor," or whether it made them as a "retail dealer or vendor," as those terms are used in the Mercantile License Tax Act of June 20, 1947, P.L. 745, Section 1, 24 PS § 582.1 et seq. and Ordinance No. 488 of the City of Pittsburgh, enacted under authority of the Act of June 25, 1947, P.L. 1145 (53 PS §§ 2015.1-2015-8).
The court below adopted the contention of the city and school district that the taxpayer made the disputed sales as a retail vendor or dealer.
The aforesaid Act imposing a mercantile license tax in school districts of the first class provides, inter alia, in Section 1, 24 PS § 582.1 as follows:
[ 183 Pa. Super. Page 237]
"(2) 'Wholesale dealer' or 'Wholesale vendor' shall mean any person who sells to dealers in, or vendors of, goods, wares and merchandise and to no other persons.
"(3) 'Retail dealer' or 'Retail vendor' shall mean any person who is a dealer in, or vendor of, goods, wares and merchandise who is not a wholesale dealer or vendor."
In Section 4, 24 PS § 582.4 the act provides, inter alia, as follows: "Every person engaging in any of the following occupations or businesses in any school district of the first class shall pay an annual mercantile license tax at the rate set forth:
"(1) Wholesale vendors or dealers in goods ... 1/2 mill ...
"(2) Retail vendors, or dealers in goods ... 1 mill ...
"(3) Wholesale and retail vendors or dealers in goods, wares and merchandise, at the rate of one-half (1/2) mill on each dollar of the volume of the annual gross wholesale business transacted by him, and one (1) mill on each dollar of the volume of the annual gross retail business transacted by him;"
Identical provisions are contained in the Ordinance of the City of Pittsburgh which is before us for interpretation, except that the rates are double the above amount, the paragraphs are designated differently, and "city" is substituted for "school district of the first class."
Paper Products Company, Inc., appellant, in this case, is engaged in the paper supply business, and is subject to the above taxes. The appellant filed the required reports and paid the taxes which the reports indicated were due.In 1953 the taxing authorities audited the records of the appellant and assessed additional
[ 183 Pa. Super. Page 238]
taxes for the years 1948 to 1953 both inclusive, claiming that sales reported by the taxpayer as wholesale transactions were retail sales under the act and ordinance. The additional taxes thus assessed were paid by the appellant under protest, it contending that certain of the sales upon which it was taxed as a retailer were made by it as a wholesaler. Some of the appellant's sales were admittedly made by it as a wholesaler and others as a retailer. As to still other sales there is a dispute which we are here called upon to settle.
The taxing authorities admit that sales made by appellant during the years in question to dealers or vendors who in turn sold the same items in the same form in which they had been purchased from the appellant, constituted wholesale business transacted by the corporation and are taxable at the rate imposed upon wholesale business, and that these sales constituted 36.68% of the gross sales of the appellant made during the years in question.
Appellant admits that the sales it made to various organizations and institutions, such as hospitals, municipalities, and other institutions which were not vendors of goods, wares and merchandise, were properly taxable at the retail rate under the wording of the statute and the ordinance. It is agreed that these sales constituted 23.47% of the gross sales made by the appellant during the years in question.
The remaining sales made by the appellant were of two types.
One of these consisted of sales of various container or packaging items to dealers or vendors of goods, wares and merchandise, who, in turn, used the containers directly in connection with the products sold by ...