Appeal from the Order of the Pennsylvania Board of Finance and Revenue, refusing to review its refusal to resettle the appellant's corporate net income tax for the taxable year ending December 31, 1964.
David H. Rosenbluth, with him Lane Taylor, Jr., and Ronon, Stevens & Young, for appellant.
Eugene J. Anastasio, Deputy Attorney General, with him Fred Speaker, Attorney General, for appellee.
President Judge Bowman, and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Manderino, Mencer, and Barbieri (who has since been appointed to the Supreme Court and did not participate in the decision). Judge Theodore O. Rogers, who was appointed to fill the vacancy left by the resignation of Judge Barbieri. Opinion by Judge Wilkinson. Dissenting Opinion by Judge Mencer. Judges Kramer and Manderino join in this dissent.
[1 Pa. Commw. 254 Page 256]
This case comes before the Court on appeal by Atlantic Coast Ports Service Corporation from the refusal of the Board of Finance and Revenue to review the corporation's petition for review of the Pennsylvania corporate net income tax assessment for the year ending December 31, 1964. All of the facts were stipulated by the parties. We adopt this stipulation and set forth those facts most pertinent to our opinion.
Atlantic is a corporation which provides tallymen on the dock to count items and check for damage as shipments are unloaded from vessels by stevedores. It is a Delaware corporation sharing offices in Philadelphia with Norton, Lilly & Company, a corporation engaged in arranging various services needed by vessels while they are in port.
The issue on which this case turns is whether the tallymen are engaged in interstate or foreign commerce, rather than in local commerce. If they are, Atlantic is immune from Pennsylvania corporate net income tax under the import-export clause of the federal Constitution. It is the decision of this Court that the tallymen are not engaged in interstate or foreign commerce and that Atlantic Coast Ports Service Corporation is subject to the state tax.
[1 Pa. Commw. 254 Page 257]
There are no cases deciding the issue of whether tallymen are engaged in interstate or foreign commerce. Therefore, this case is one of first impression. There are cases which determine that stevedores are engaged in interstate commerce when a stevedoring corporation maintains supervision and control over the men as they work. On the other hand, where the stevedoring corporation merely rents out its men to a shipping company, it is engaged in local rather than interstate or foreign commerce. In the latter instance a stevedoring corporation is subject to state taxation, while in the former instance it is not. Puget Sound Stevedoring Company v. State Tax Commission, 302 U.S. 90 (1937); Joseph, Comptroller, et al. v. Carter & Weekes Stevedoring Co., 330 U.S. 422 (1947). In its brief, Atlantic attempts to draw an analogy between tallymen and stevedores. However, such an analogy is improperly made. Further, this case does not turn on the element of whether Atlantic was an independent contractor.
In Western Maryland Railroad Company v. State Tax Commission, 340 U.S. 520 (1950), Mr. Justice Douglas, in holding the railroad subject to state tax, said, "The ultimate impact of such a holding is difficult to measure, since manifold services are involved in the movement of exports and imports within the country. Problems of this nature, like many problems in the law, involve the drawing of lines. So far as taxes on activities connected with bringing exports to or imports from the ship are concerned, we think the line must be drawn at the water's edge."
At all times the tallymen in this case sat on the dock, counting items and checking them for damage. They never boarded the ship, never unloaded cargoes and never extended their activities beyond the water's edge in any fashion. Applying Mr. ...