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PITTSBURGH v. HOUSTON (04/19/73)

decided: April 19, 1973.

PITTSBURGH, ET AL.
v.
HOUSTON, ET AL.



Appeal from the Order of the Court of Common Pleas of Allegheny County in case of City of Pittsburgh, a municipal corporation, and Joseph L. Cosetti, Treasurer v. William McC. Houston, Fred C. Houston and Thomas J. Donnelly, individually and t/d/b/a Houston, Houston & Donnelly, No. 1599 October Term, 1971.

COUNSEL

William McC. Houston, with him Houston, Houston & Donnelly, for appellants.

Grace S. Harris, Special Assistant City Solicitor, with her Ralph Lynch, Jr., City Solicitor, for appellees.

President Judge Bowman, and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Wilkinson. Judge Mencer dissents.

Author: Wilkinson

[ 8 Pa. Commw. Page 469]

It is entirely appropriate that we should introduce this opinion with the introduction used by Justice Pomeroy in his able opinion when this taxing ordinance was attacked in F.J. Busse Company, et al. v. Pittsburgh, 443 Pa. 349, 352, 279 A.2d 14, 15 (1971).

"The City of Pittsburgh, as a municipal corporation and a city of the second class, acting under the authority of the Local Tax Enabling Act of December 31, 1965, P.L. 1257, as amended, 53 P.S. § 6901 et seq. (Supp. 1971) (hereinafter 'the Act' or 'the Enabling Act') enacted Ordinance No. 675 of 1968, known as the Business Privilege Tax Ordinance, imposing a tax upon the privilege of engaging in business in the City of Pittsburgh. This tax is measured by the gross receipts of a business and is assessed at the rate of six mills per dollar of volume of gross annual receipts. The appellants, a group of domestic and foreign corporations engaged in the contracting and construction industry, filed a complaint in equity attacking the validity of the ordinance and seeking to have the City and its officials enjoined from collecting the tax. The chancellor found the tax ordinance to be valid and applicable to the appellants; after exceptions his decree was affirmed and made final by the court en banc. This appeal followed.

[ 8 Pa. Commw. Page 470]

"The appellants assert that the ordinance should be invalidated for a variety of reasons, to wit: (1) the City had no authority to enact such an ordinance by virtue of the provisions of the Act; (2) the tax imposed by the ordinance duplicates already existing state taxes on the same property or subject matter; (3) the tax imposed by the ordinance violates the uniformity clause of the Pennsylvania Constitution (Art. VIII, Sec. 1); (4) the ordinance contains an unlawful delegation of legislative authority to the treasurer of the City of Pittsburgh; and (5) the tax imposed by the ordinance exceeds the maximum rate which under the Act is allowed for a mercantile tax. We find none of these arguments persuasive and affirm the order of the lower court. n.1 [Footnote 1: The appellants also argue that the business privilege tax imposed by the ordinance is an earned income tax which under Section 13 of the 1965 Act, 53 P.S. § 6913 (Supp. 1971) can be imposed only upon natural individuals. By definition, the tax imposed by the City is not an income tax, but rather a tax on a privilege which is measured by the gross receipts collected from conducting a business and not by the amount of profit made by the taxpayer.]" Appellants did not challenge Busse, indeed they ignore it completely!

Appellants, a partnership of attorneys practicing in Pittsburgh, state the two narrow questions presented in this case as:

"1. Is a municipal levy of a gross receipts tax adopted under the authority of the Local Tax Enabling Act fatally defective as to persons engaging in an occupation as partners where the ordinance purports to levy and assess the tax on a partnership as a separate entity and does not levy and assess the tax on individual partners?

"2. May a municipality levy, assess and collect under the Local Tax Enabling Act a ...


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