Appeal from order of Court of Common Pleas of Dauphin County, No. 367 Commonwealth Docket, 1969, in case of Commonwealth of Pennsylvania v. Erie Metropolitan Transit Authority.
Walter K. Swartzkopf, Jr., with him Frank A. Sinon, and Rhoads, Sinon & Reader, for appellant.
Edward T. Baker, Deputy Attorney General, with him Fred Speaker, Attorney General, for Commonwealth, appellee.
Jones, Eagen, O'Brien, Roberts, Pomeroy and Barbieri, JJ. Opinion by Mr. Justice Pomeroy. Mr. Justice Roberts would affirm on the opinion of Judge Lipsitt in the court below. Mr. Chief Justice Bell took no part in the consideration or decision of this case.
The question presented by this appeal is whether or not a municipal transportation authority organized and existing under the Municipality Authorities Act of 1945*fn1 (the Authorities Act) is subject to tax liability
under The Liquid Fuels Tax Act (the Fuels Tax Act).*fn2 Appellant, the Erie Metropolitan Transit Authority (ETA), formed by the City of Erie and Erie County under the Authorities Act, asserts that it is not so subject; the Commonwealth, appellee, claims that it is, and the court below, after a non-jury trial, agreed.*fn3
The corporate purposes of ETA as set forth in its Articles of Incorporation are as follows: "To acquire, hold, construct, improve, maintain, and operate, own lease, either in the capacity of lessor or lessee, all facilities necessary or incidental thereto for the operation of a mass transportation system including motor buses for public use, in the metropolitan area consisting of the City of Erie and its surrounding environs within the County of Erie, Pennsylvania."
In the course of performance of its mass public transportation functions, appellant operates a fleet of 50 buses powered with diesel engines for the transportation of passengers. During the tax period involved, over 180,000 gallons of diesel fuel were consumed by appellant in its operations, giving rise to the tax claim in issue.
The Fuels Tax Act, Section 4, imposes "[a] permanent excise tax at the rate of seven cents ($.07) a gallon . . . on all dealer-users upon the use of fuel within this Commonwealth." (72 P.S. 2614.4) The same section carves out an exemption from the tax in the following
language: "No tax is hereby imposed . . . (4) upon any fuel used by or sold or delivered to the Commonwealth of Pennsylvania ...