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COMMONWEALTH v. ASSOCIATION IRON & STEEL ENGINEERS (06/24/66)

decided: June 24, 1966.

COMMONWEALTH
v.
ASSOCIATION OF IRON & STEEL ENGINEERS, APPELLANT



Appeal from judgment of Court of Common Pleas of Dauphin County, No. 612 Commonwealth Docket, 1963, in case of Commonwealth of Pennsylvania v. Association of Iron & Steel Engineers.

COUNSEL

Edward R. Lawrence, with him Paul, Lawrence & Rock, for appellant.

Edward T. Baker, Deputy Attorney General, with him Walter E. Alessandroni, Attorney General, for Commonwealth, appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Musmanno.

Author: Musmanno

[ 421 Pa. Page 584]

The Association of Iron and Steel Engineers has appealed from an order of the Court of Common Pleas of Dauphin County denying its appeal from the assessment of Sales and Use Tax for the period March 7, 1956 to September 30, 1961, amounting to $3,850.06, including interest and penalties.

The tax was levied pursuant to the provisions of the Selective Sales and Use Tax Act of March 6, 1956, P. L. (1955) 1228, as amended, 72 P.S. § 3403-1 et seq. Section 201(a) of the Act imposed a tax upon each separate sale at retail within the Commonwealth. Section 201(b) imposed a tax upon the use within the

[ 421 Pa. Page 585]

Commonwealth of selected items of tangible personal property. Section 2(j) defined "Sale at Retail", in part, as "any transfer for a consideration of the ownership, custody or possession of tangible personal property". Among the definitions of "tangible personal property" in section 2 of the Act, the following appears as subsection 2(1) (18): "(18) Periodical and other publications, but not including publications which are published at regular intervals not exceeding three months, circulated among the general public and containing matters of general interest and reports of current events."

The appellant contended that its magazine, Iron and Steel Engineer, falls within the exception in subsection 2(1) (18) and that, therefore, its sale and use was not subject to the tax. The court below, in overruling this contention, thoroughly considered all the arguments advanced by the appellants and disposed of them in an excellent analytical opinion, a reference to which will resolve all ambiguities and controversy inherent in the litigation. Summarizing the lower court's decision it is to be noted that in order for a publication not to be subject to the tax, four cumulative conditions must be met: (1) the publication must be published at regular intervals, not exceeding three months; (2) it must be circulated among the general public; (3) must contain matters of general interest, and (4) must contain reports of current events.

Iron and Steel Engineer meets the first condition easily because it is published monthly, but it encounters an insurmountable barrier when it confronts the second condition for it is only too clear from the slightest glance at the formidable and highly technalized periodical that its circulation is restricted to a certain segment of the community comprised of those persons who derive their livelihood from the specific field of activity treated in the publication. Thus, the magazine

[ 421 Pa. Page 586]

    cannot be tax free under the statutory definition of ...


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