Appeals from the Orders of the Court of Common Pleas of Allegheny County in cases of Jones & Brown, Inc., a Corporation, v. City of Pittsburgh, a Municipal Corporation, and David A. Smith, Treasurer, Nos. A-1882 of 1963 and A-1883 of 1963, and Jones & Brown, Inc., a Corporation, v. School District of Pittsburgh and David A. Smith, Treasurer, Nos. A-1884 of 1963 and A-1885 of 1963.
William W. Scott, Jr., with him Thorp, Reed, & Armstrong, for appellant.
Grace S. Harris, Special Assistant City Solicitor, with her Ralph Lynch, Jr., City Solicitor, Bernard Markovitz, Assistant Solicitor, School District of Pittsburgh, and Justin M. Johnson, Solicitor, School District of Pittsburgh, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Wilkinson. Concurring Opinion by Judge Kramer.
These four cases involve refunds claimed by appellant on Mercantile License Taxes paid to the City of Pittsburgh and the School District of Pittsburgh for the years 1962 and 1963. Appellant filed tax returns for these two years on the basis that all its sales were at wholesale. The taxing authorities reclassified some of the sales to be at retail which carried a higher rate.
There is no substantial dispute on the facts. Appellant sells building supplies to lumber yards for resale by the lumber yards in the usual and customary manner. There is no question that these sales are at wholesale. Appellant also sells the same building supplies at the same wholesale prices to contractors. It is these sales that are in dispute.
We quote from the opinion of Judge Lencher of the court below:
"The evidence as presented at the hearing of October 29, 1964, discloses and we find that the contractor canvasses prospective customers for specific complete jobs. Prior to the time Jones and Brown, Inc., enters the picture, the contractor, (the vendee of petitioner) and home owners discuss materials, colors, measurements and specifications. When all is agreed upon, the oral discussions are put down on paper in contract form. At no time does the home owner have a voice in designating the supplier of the material. He cannot buy labor without material. The contract price is one figure without any breakdown of the various cost of items making up the complete job.
"Only after the contract is executed does the contractor contact this petitioner to order the various items making up 'the job.' Included therein could be the siding, nails, molding, etc. If a window or door is included in the job, petitioner supplies same in a disassembled condition. Lengths of rainware can be supplied along with all of the accessories necessary for installation. Even the tools necessary for cutting, shaping and installation can be supplied by the taxpayer.
"Once applied to the wall, individual items are lost in their separate form. No longer can the siding be separated from the wall without destruction of the product. Once the siding is cut and shaped for a particular area, it cannot be used elsewhere.
"Basically what the contractor is selling is his service, not the component parts. Whatever material is purchased from Jones and Brown, Inc., is not sold specifically as such, but is included as a raw material in the ...