Appeal, No. 26, March T., 1958, from order of County Court of Allegheny County, No. A-1672 of 1955, in case of City of Pittsburgh v. Electric Welding Company et al. Order reversed.
Regis C. Nairn, Assistant City Solicitor, with him, Marcus Aaron, II, and J. Frank McKenna, Jr., City Solicitor, for appellant.
James D. Wills, with him Miller, Hay & Entwisle, for appellee.
Before Jones, C.j., Bell, Musmanno, Jones and Cohen, JJ.
OPINION BY MR. CHIEF JUSTICE JONES.
The City of Pittsburgh, acting by its treasurer, appeals from the order of the court below sustaining the Electric Welding Company's appeal from a mercantile license tax assessment, with penalties, on the ground that the company's business operations constituted manufacturing and that, consequently, it was not liable for the tax.
By ordinance No. 488 of December 1, 1947, as amended, the city imposed an annual mercantile license tax on persons engaged in the occupation or business of vending or dealing in goods, wares and merchandise with the proviso, however, that the terms "dealer in" or "vendor of goods, wares and merchandise" were not to be taken as including vendors of or dealers in articles of their own manufacture.
A companion case involving the similar tax of the Pittsburgh School District, where the material facts are identical with the facts of th, instant case, was heard and decided by the court below together with this case and with like result. The School District appealed its case to the Superior Court which held that the Electric Welding Company's income was derived from manufacturing and that, therefore, it was not liable for
the mercantile license tax. See Electric Welding Company v. Pittsburgh School District, 186 Pa. Superior Ct. 243, 142 A.2d 433. Our study of the present record leads us, however, to the opposite conclusion, viz., that the goods, wares and merchandise, here in issue, which the Electric Welding Company deals in or vends are not of its own manufacture and that, accordingly, it is liable for the mercantile license tax on that portion of its business.
The operations of the company fall into five general classifications, as follows: (1) wire mesh, (2) load transfer units, (3) concrete reinforcing bars, (4) column spirals, and (5) special reinforcing assemblies. It is only the last three classes with which we are here concerned. The City has heretofore conceded that the production of load transfer units, (2) above, constitutes manufacturing, while the company has likewise conceded that its wire mesh operation, (1) above, is not in any way connected with manufacturing. The question then is whether the company's operations coming under classifications, (3), (4) and (5) above, constitute manufacturing.
The concrete reinforcing bars are used in the construction of highways, buildings, bridges, etc., in which concrete constitutes a considerable part of the structure. As used in the construction, the reinforcing bars are arranged in place and concrete is then poured around them. Thus, they become integrated with and give additional strength to the structure. The company purchases from the producers steel rods of various sizes, cuts them to desired lengths and then bends or twists them ...