Appeal from judgment of Court of Common Pleas of Dauphin County, No. 65 Commonwealth Docket 1963, in case of Commonwealth of Pennsylvania v. Life Assurance Company of Pennsylvania.
Harry J. Rubin, with him Morris J. Dean, and Krekstein and Rubin, and Dean and Dean, for appellant.
Eugene J. Anastasio, Deputy Attorney General, with him Walter E. Alessandroni, Attorney General, for Commonwealth, appellee.
Sanford D. Beecher, and Duane, Morris & Heckscher, for amicus curiae under Rule 65.
Bell, C. J., Musmanno, Jones, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Chief Justice Bell dissents. Mr. Justice Cohen took no part in the consideration or decision of this case.
This appeal is by the Life Assurance Company of Pennsylvania, a stock life insurance company organized under the laws of this Commonwealth, from an order of the Court of Common Pleas of Dauphin County, sitting as the Commonwealth Court, sustaining the imposition of a gross premiums tax under the Act of February 21, 1961, P. L. 33, 72 P.S. §§ 2270.1-2270.10.*fn1 Appellant attacks the constitutionality of the Act and the interpretation given certain language contained
therein by various agencies of the Commonwealth and by the court below.
The Act of 1961 imposes upon domestic life insurance companies a tax at the rate of 2% on the premiums received from business done within the Commonwealth.*fn2 It imposes an identical tax upon all foreign insurance companies without regard to the type of insurance coverage provided.*fn3
Appellant filed a Gross Premiums Tax Report for the year ending December 31, 1961, but failed to remit the tax due thereunder claiming that the Act of 1961 was invalid. Petitions contesting the imposition of the tax having been denied by the appropriate state departments and boards,*fn4 appellant perfected an appeal to the court below where the Act and the tax imposed were sustained.
In urging reversal of the decision below, appellant bases its numerous objections to the tax sought to be imposed upon both statutory and constitutional grounds.
Appellant first argues that the imposition of a gross premiums tax upon domestic life insurance companies results in their being subjected to a Pennsylvania tax burden greater than that imposed upon competing foreign insurance companies. The inequality is said
to arise by reason of the fact that both foreign and domestic insurance companies pay the same 2% gross premiums tax under the Act of 1961, while only domestic life insurance companies pay in addition a capital stock*fn5 and net income*fn6 tax. Therefore, appellant argues, domestic life insurance companies are placed at a disadvantage to their foreign competitors and denied the equal protection and uniformity of treatment which the federal*fn7 and state*fn8 constitutions guarantee.*fn9
We cannot agree. The Act of 1961 imposes precisely the same tax upon foreign insurance companies as is imposed upon domestic life insurance companies, such as appellant. What appellant seeks is a determination
that a tax which makes no distinction in its treatment of appellant and its foreign competitors is unconstitutional because of burdens placed upon domestic life insurance companies by other taxing measures. Such an argument is misdirected. The Act of 1961 makes no classification between appellant and its foreign competitors and, therefore, cannot be said to violate either the federal or state constitutions by reasons of classifications made by other legislation. As to appellant and its foreign competitors, the Act of 1961 is both equal and uniform.*fn10
Appellant next contends that the Act of 1961 is violative of these same constitutional provisions by reason of the fact that domestic life insurance carriers are taxed thereunder whereas domestic nonlife carriers are not similarly burdened.
While the Act, for purposes of imposing a gross premiums tax, distinguishes between domestic life and all other domestic insurance carriers, such distinction does not in and of itself rise to a constitutional
violation. See Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 79 S. Ct. 437 (1959); State Bd. of Tax Comm'rs of Indiana v. Jackson, 283 U.S. 527, 51 S. Ct. 540 (1931); Jones & Laughlin Tax Assessment Case, 405 Pa. 421, 175 A.2d 856 (1961); Commonwealth v. Girard Life Ins. Co., 305 Pa. 558, 158 Atl. 262 (1932); Heisler v. Thomas Colliery Co., 274 Pa. 448, 118 Atl. 394, aff'd, 260 U.S. 245, 43 S. Ct. 83 (1922); Germania Life Ins. Co. v. Commonwealth, 85 Pa. 513 (1877); Coe v. Duffield, 185 Pa. Superior Ct. 532, 138 A.2d 303 (1958). By necessity a wide discretion must be conceded to the Legislature in the classification of various businesses or occupations for purposes of taxation. State Bd. of Tax Comm'rs of Indiana v. Jackson, 283 U.S. 527, 537, 51 S. Ct. 540, 543 (1931); Brown-Forman Co. v. Kentucky, 217 U.S. 563, 30 S. Ct. 578 (1910); see Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 79 S. Ct. 437 (1959); Heisler v. Thomas Colliery Co., 274 Pa. 448, 118 Atl. 394, aff'd, 260 U.S. 245, 43 ...