Appeal from the Order of the Court of Common Pleas of Philadelphia County in case of Damico, Inc. v. The School District of Philadelphia and Thomas W. Rogers, No. 2104 September Term, 1971.
Robert T. Lear, with him Edward B. Soken, for appellants.
Marvin Comisky, with him Alan Gershenson, and, of counsel, Blank, Rome, Klaus & Comisky, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers and Blatt. Judge Kramer did not participate. Opinion by Judge Wilkinson. Dissenting Opinion by President Judge Bowman. Judge Mencer joins in this dissent.
[ 15 Pa. Commw. Page 559]
This case challenges the constitutionality of the Philadelphia Business Use and Occupancy Tax enacted by the City Council on June 4, 1970 (Bill No. 1860),*fn1 authorizing the imposition of such a tax by the Board of Education of the School District of Philadelphia as it is applied to appellee. That this tax is constitutional in its general application was decided by the Pennsylvania Supreme Court in Wanamaker v. Philadelphia School District, 441 Pa. 567, 274 A.2d 524 (1971). That taxing legislation may be constitutional in its general application but unconstitutional in its application to a particular taxpayer is clear. Indeed, appellants do not contend that Wanamaker is controlling other than as to the nature and subject of the Business Use and Occupancy Tax and agree that "the basic issue in this case is whether the formula used to 'measure' the amount of tax to be paid is constitutional as applied to this taxpayer."
This action was instituted by a complaint in equity to enjoin the collection of the tax from the plaintiff. The matter was decided by the lower court based on a
[ 15 Pa. Commw. Page 560]
stipulation of facts and a small amount of uncontested and uncontradicted testimony on the nature of the structure, its use, and the method used in the assessment. The Chancellor granted the injunction with a decree nisi. Exceptions were filed and were dismissed by a three-judge court en banc which entered a final decree granting the permanent injunction. This appeal followed and we must affirm.
The general law in Pennsylvania with regard to the requirement of uniformity in both property and excise taxes as mandated by Article VIII, Section 1, of the Pennsylvania Constitution, known as the Uniformity Clause, is so ably, completely and currently discussed in the majority, concurring and dissenting opinions in Wanamaker that it would be redundant to repeat it here. The law's requirement of uniformity as applied to the facts in this case is what we must decide, aided by the appropriately short but complete briefs of counsel and the scholarly opinion of the Chancellor, Judge Takiff, speaking for a unanimous three-judge court en banc.
Appellee leases and operates a parking garage at 17th and Market Streets in the City of Philadelphia. The garage is a separate and distinct part or section of a larger office building. The total building is 32 floors with one section only five floors. The garage occupies all of the second, third, fourth and fifth floors of both sections and part of the first floor of the five-floor section. The garage area does not have partitions for rooms, insulation, heat, air conditioning, glass, floor or ceiling finish and, as compared to the office area or section, fewer electrical outlets and fixtures. Obviously, the construction and maintenance cost of this garage area is only a fraction of that of the office section. The stipulation and testimony set forth the detailed figures, but it is sufficient here to summarize that the appellee uses approximately 20% of the total square foot space
[ 15 Pa. Commw. Page 561]
of the entire building and, under the formula required by Bill No. 1860, is required to pay approximately 20% of the tax on the entire building. However, the rent he pays for the use of this space is only approximately 3% of the total rent paid for the use of the entire building.
A real estate assessor with the City of Philadelphia testified as to the assessment of this property. He testified that the ...