Appeal, No. 34, March T., 1962, from decree of Court of Common Pleas of Cambria County, June T., 1961, No. 13, equity docket, in case of Edward Danyluk, Robert E. Squire, Robert M. Grove et al. v. Bethlehem Steel Company and City of Johnstown. Decree affirmed.
Samuel R. DiFrancesco, Sr., with him DiFrancesco and DiFrancesco, for appellant.
Richard J. Green, Jr., for appellees.
Before Bell, C.j., Jones, Cohen, Eagen and Alpern, JJ.
OPINION BY MR. JUSTICE COHEN
In 1960, the City of Johnstown (City) enacted an ordinance imposing a "ten ($10.00) Dollars per year [Occupational Tax upon] non-resident individual engaged in any occupation whatsoever within the corporate limits of the City of Johnstown. ..." (Emphasis supplied). The ordinance imposed the levy for the fiscal year 1961 and annually thereafter; required employers to withhold the tax from the non-resident employees; and stated that it was enacted under the authority of the Act of 1947, June 25, P.L. 1145, § 1, as amended, 53 P.S. §§ 6851 to 6857, and was for the purpose of providing revenue for capital improvements.
Appellees, non-residents employed within the City by the Bethlehem Steel Company, brought suit against their employer and City to enjoin the former from paying over to the latter any amounts withheld from their wages as a result of the ordinance and to enjoin City
from collecting said sums. In entering a permanent injunction against City and Bethlehem, ordering the latter to return the sums withheld, the court below held that (1) the ordinance violated the "uniformity" clause of the Pennsylvania Constitution, Article IX, § 1, since the tax applied only to non-residents, and (2) City has exceeded the authorization of the Act of 1947 since the monies were to be devoted to capital improvements rather than for general revenue purposes. City has appealed.
City maintains that there is no lack of uniformity since at the same time it enacted the occupation tax applicable to non-residents, it had also imposed a per capita tax of ten dollars upon residents, and that both of the taxes are actually head taxes. City also points to the Act of 1957, May 20, P.L. 178, § 1, 53 P.S. § 37403, 1.1, which permits third class cities to create and appropriate monies to a capital reserve fund, as authority for the purpose clause in the ordinance.
Neither contention is sound. Concededly, the invalid purpose provision of the ordinance is a technical defect which could be easily corrected by City (as could the defect in levying the tax permanently rather than on an annual basis). The Act of 1957, however, has nothing to do with the levying of taxes, but merely permits appropriations for certain purposes. It does not, therefore, support City's position.
More important, the tax is violative of the uniformity requirement of the Pennsylvania Constitution. A reading of the imposition clause of the ordinance (quoted above) clearly demonstrates that, despite its label, the tax in question is a direct ...