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MILLER CHEVROLET COMPANY v. PITTSBURGH. (06/30/60)

June 30, 1960

MILLER CHEVROLET COMPANY, APPELLANT,
v.
PITTSBURGH.



Appeals, Nos. 189 and 190, March T., 1960, from order of County Court of Allegheny County, Nos. A174 and A175 of 1959, in case of Miller Chevrolet Company v. City of Pittsburgh et al., and Same v. School District of Pittsburgh et al. Order reversed.

COUNSEL

Jerome C. Bachrach, with him Gregory Zatkovich, for appellant.

Regis C. Nairn, Assistant City Solicitor, with him Edmund W. Ridall, Jr., Assistant School Solicitor, Niles Anderson, School Solicitor, and David Stahl, City Solicitor, for Pittsburgh and School District, appellees.

Before Jones, C.4., Bell, Musmanno, Jones, Cohen and Eagen, JJ.

Author: Eagen

[ 400 Pa. Page 649]

OPINION BY MR. JUSTICE EAGEN.

Appellant is a franchised General Motors Dealer in new and used automobiles. As such, it is subject to the assessment by the City and School District of Pittsburgh of a mercantile tax of two mills and one mill, respectively, "on each dollar of the volume of the annual gross business transacted." Not having included in its computations of gross receipts the difference between the manufacturer's recommended list price, on the one hand, and alternately, the price at which the items were actually sold where no trade-in transaction was involved, or the total of the actual money received plus the value actually placed by it on the traded-in items when such were involved, on the other hand, appellant was duly notified that it owed additional mercantile license taxes for the years 1954 to 1958, inclusive, in the amounts of $5,334.70, as to the city, and $2,595.07, as to the School District, each sum including interest and penalties correctly computed. The notification was dated December 9, 1958. Appellant paid each of the amounts by checks dated December 12, 1958, and at that time, protested the deficiency assessments, penalties and interest. Following a hearing

[ 400 Pa. Page 650]

    conducted on the protest, the taxing authorities decided that there would be "no change in the audit." An action, in the form of a petition for appeal from assessment of additional mercantile taxes, was thereupon instituted in the court below.

The verity and accuracy of the material facts and figures alleged by appellant-petitioner at no time in the proceedings having been in dispute, the questions were presented and resolved below purely as issues of law. For simplification purposes, two hypothetical situations, having a controlling analogy to the true picture presented, were submitted and determined as decisive of the merits of the controversy. In essence, they were these: Question 1: Assume the manufacturer's recommended list price of a given automobile to be $3000. Assume a no trade-in deal. Assume customer buys the car for the actual price of $2,400. Is the mercantile tax, on these supposed facts, to be based on the $3000 figure or that of $2,400? The lower court, reversing the "no change" conclusion of the taxing authorities, held the tax to be assessable on the actual selling price of $2,400. No appeal from that order was taken and the City and School Board have presumably refunded $2,193.52 to the appellant as an over-assessment. Question 2: Assume the same manufacturer's recommended list price. Assume a trade-in deal. Assume the actual selling price of the new car to customer to be $2,400. Assume payment of $1600 in cash and a trade-in of a car actually evaluated by appellant and customer at $800. Is the mercantile tax, on these supposed facts, to be based on the recommended list price of $3000 or on the aggregate of the cash received by appellant and the actual value placed on the trade-in by the parties to the sale? The lower court, affirming the "no change" conclusion reached by the authorities on this aspect of the petition, held in effect the tax to be assessable on the

[ 400 Pa. Page 651]

$3000 figure. The petitioner appeals to us, praying for a reversal of this determination. We hereby so order.

It is essential to an understanding of the merits of this case to bear in mind that appellees do not question the reality of the values placed by appellant on the cars it accepted as trade-ins. These figures are not challenged. How then can we assume the value of these cars to have been more than that agreed upon by the parties to the several transactions? Obviously, we cannot. ...


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