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COMMONWEALTH v. WETZEL (10/09/69)

decided: October 9, 1969.

COMMONWEALTH
v.
WETZEL, APPELLANT



Appeal from judgment of Court of Common Pleas of Dauphin County, No. 30 Commonwealth Docket, 1968, in case of Commonwealth v. Lester P. Wetzel.

COUNSEL

Rod J. Pera, with him Richard C. Fox, and McNees, Wallace & Nurick, for appellant.

Eugene J. Anastasio, Deputy Attorney General, with him William C. Sennett, Attorney General, for Commonwealth, appellee.

William Anderson, and Smith & McCleary, for amicus curiae.

Bell, C. J., Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Pomeroy. Mr. Chief Justice Bell and Mr. Justice Roberts dissent. Mr. Justice Jones took no part in the consideration or decision of this case.

Author: Pomeroy

[ 435 Pa. Page 469]

This appeal from a judgment of the Court of Common Pleas of Dauphin County (Commonwealth Docket) upholding a decision of the Board of Finance and Revenue concerns the availability of the "sale for resale" exemption from state sales taxation under the Tax Act of 1963 for Education*fn1 in the sale of stud services for breeding standardbred (harness) horses later sold in the market.

Appellant Wetzel is engaged in the business of breeding and raising standardbred horses for sale. In May,

[ 435 Pa. Page 4701965]

, he sent two mares to Hempt Farms for the purpose of having the mares bred to stallions standing at Hempt Farms. Wetzel agreed with Hempt Farms that the $500 charge for the service of each of the stallions would be deferred and paid by way of deduction from the proceeds to be derived from the sale of the foals by Hempt Farms for the account of appellant. Thereafter both mares foaled. The two foals were sold; and sales tax for both sales was collected thereon and remitted to the Commonwealth. Subsequently Hempt Farms, after having deducted the service fees of $500 each and a sales tax of $25 with respect to each service fee, transmitted the net proceeds to appellant, and the sales tax was reported and paid by Hempt Farms to the Commonwealth.

Appellant filed with the Bureau of Sales and Use Tax a timely petition for refund, claiming a refund of the $50 tax imposed on the service fees. The Sales Tax Board and, upon review, the Board of Finance and Revenue, denied the appellant's claim. Appellant then appealed to the Court of Common Pleas of Dauphin County, where the case was submitted upon a stipulation of facts and waiver of jury trial. The court en banc, in an opinion by Judge Shelley, held for the Commonwealth and dismissed the appeal. The taxpayer's exceptions were overruled, and final judgment was entered against appellant and in favor of the Commonwealth. This appeal followed.

The Tax Act of 1963 for Education, formerly the Selective Sales and Use Tax Act, imposes a tax, collected by the vendor from the purchaser, upon "each separate sale at retail," defined, inter alia, under Section 2(j)(1) as "Any transfer, for consideration, of the ownership, custody or possession of tangible personal property." The Court of Common Pleas of ...


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