Appeals, Nos. 357 and 358, Jan. T., 1959, from orders of Court of Common Pleas No. 1 of Philadelphia County, June T., 1957, No. 3049, in case of City of Philadelphia, Tax Review Board, v. Manheim Laundry Company. Orders affirmed. Appeal by taxpayer from assessment of mercantile license tax by Tax Review Board. Orders entered affirming decision of Tax Review Board, opinion by CHUDOFF, J. Taxpayer appealed.
Alfred J. McDowell, with him Ronald Souser, for appellant.
Alan Miles Ruben, Deputy to the City Solicitor, with him Leonard B. Rosenthal, Assistant City Solicitor, and David Berger, City Solicitor, for appellee.
Before Jones, C.j., Bell, Musmanno, Jones, Cohen, Bok and Mcbride, JJ.
OPINION BY MR. JUSTICE MUSMANNO
Manheim Laundry Company appeals from an assessment of mercantile license tax by the City of Philadelphia for the years 1953-56 on gross receipts collected from Manheim's customers living beyond the borders of Philadelphia. Manheim conducts a family service laundry, its sole plant being located within the City of Philadelphia where the laundry work is accomplished. It employs route salesmen who pick up the soiled laundry at the homes of its customers and returns it after
the cleansing operation has been completed. If a customer lives outside the City of Philadelphia, the company's route salesman still goes to his home to gather up the laundry and eventually return it. Where the company performs pick-up and delivery services it charges 10% more than the amount paid by the customer who delivers his soiled laundry at the company's office and collects the clean laundry there later. Stated in another manner, Manheim allows a 10% discount to those who deliver and withdraw their laundry at its place of business.
In computing its mercantile license tax for the years 1953-56, Manheim excluded from its total gross receipts such sums as were collected from customers located beyond the confines of Philadelphia. The City tax authorities ruled this exclusion improper. Manheim appealed to the Tax Review Board, insisting on excluding from its gross receipts the sums collected from out-of-Philadelphia customers, or, in the alternative, that it be credited, as non-taxable, with that portion of its gross receipts which represented payment for the services rendered outside the City.
The Tax Review Board rejected both these contentions and Manheim appealed to the Court of Common Pleas No. 1 of Philadelphia County which held that Manheim was not entitled to exclude all moneys derived from its out-of-city business,*fn1 but that to the extent Manheim performed pick-up and delivery services beyond Philadelphia limits, the receipts attributable to such services were not taxable. The Court then remanded the case to the Tax Review Board to determine a reasonable formula of allocation as to the portion of the company's receipts attributable to the pick-up and delivery services outside Philadelphia.
At the renewed hearing before the Tax Review Board, Manheim stated that approximately 23% of its gross receipts were realized from customers living beyond Philadelphia. The City argued against any allocation at all. The Board ruled that Manheim was entitled to a 10% exclusion on its out-of-town trade, this being the same 10% which represented the differentiation between the prices charged those whose laundry was picked up and delivered at their homes, and those who deposited and collected their laundry at the laundry office. Manheim appealed to the court of common pleas complaining that the Tax Review Board's ...