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CITY PHILADELPHIA v. WILLIAM L. ELKINS (11/23/73)

decided: November 23, 1973.

CITY OF PHILADELPHIA, BOARD OF REVISION OF TAXES, APPELLANT,
v.
WILLIAM L. ELKINS, APPELLEE



Appeal from the Order of the Court of Common Pleas of Philadelphia County, in case of William L. Elkins v. City of Philadelphia, Board of Revision of Taxes, No. 6149 May Term, 1969.

COUNSEL

James M. Penny, Jr., Assistant City Solicitor, with him John Mattioni, Deputy City Solicitor, Howard D. Scher, Assistant City Solicitor, and Martin Weinberg, City Solicitor, for appellant.

Duffield Ashmead, III, with him Lawrence J. Fox, for appellee.

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

Author: Mencer

[ 11 Pa. Commw. Page 122]

This appeal presents for interpretation a portion of Section 1 of the Personal Property Tax Act of June 17, 1913, P.L. 507, as amended (Act of 1913), 72 P.S. § 4821. That portion imposing a four-mill tax reads, in part, as follows: "All personal property of the classes hereinafter enumerated, owned, held or possessed by any resident . . . , whether such personal property be owned, held, or possessed by such resident in his, her, their or its own right, or as active trustee, agent, attorney-in-fact, or in any other capacity, or by any resident as trustee, agent or attorney-in-fact, jointly with one or more trustees, agents or attorney-in-fact, domiciled in another state, where such personal property is held and managed in this Commonwealth, except as executor or administrator of the estate of a non-resident decedent, and except as trustee for a resident or non-resident religious, charitable or educational organization, no part of the net earnings of which inures to the benefit of any private stockholder or individual . . . is hereby made taxable. . . ."

Here we are specifically concerned with the exception from the tax allowed personal property held by a "trustee for a . . . charitable organization, no part of the net earnings of which inures to the benefit of any . . . individual."

On August 10, 1966, William L. Elkins (Elkins) executed a Deed of Trust naming himself as trustee. The charitable trust created provided that, as trustee,

[ 11 Pa. Commw. Page 123]

Elkins would pay the net income produced by the trust corpus to charities for a period of ten years and one month, after which time the trust would terminate and the corpus of the trust would return to Elkins.

It is acknowledged by stipulation that this was an irrevocable charitable trust*fn1 and that all income would be distributed to charities, as that term is defined in § 170(c) of the United State Internal Revenue Code of 1954.

On August 23, 1967, the Department of Collections of the City of Philadelphia advised Elkins that it was assessing the principal of the trust in the amount of $371,450 and would require Elkins to pay a tax to be computed on that amount. Elkins filed an application for correction of assessment with the Board of Revision of Taxes which denied Elkins' application on March 29, 1969. Elkins appealed this ruling to the Court of Common Pleas of Philadelphia County which reversed the Board of Revision of Taxes by order under date of October 24, 1972 and set aside "its assessment of Personal Property Taxes against the corpus of the trust" in question. This appeal followed and we affirm.

We recognize that if the power to tax exists and the taxpayer is within the general language of the statute imposing the tax, all provisions relied upon to establish an exemption from the tax must be strictly construed against the claim for exemption. University of Pittsburgh Tax Exemption Case, 407 Pa. 416, 180 A.2d 760 (1962); Fischer v. Pittsburgh, 383 Pa. 138, 118 A.2d 157 (1955). The claimant for an exemption from taxation must establish himself clearly within the exemption provision. However, as Mr. Chief Justice HORACE STERN stated ...


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