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TAX REVIEW BOARD PHILADELPHIA v. HEINTZ INVESTMENT CO. (04/17/75)

decided: April 17, 1975.

TAX REVIEW BOARD OF PHILADELPHIA, APPELLANT,
v.
HEINTZ INVESTMENT CO.



COUNSEL

Martin Weinberg, City Sol., Leonard B. Rosenthal, James M. Penny, Jr., Asst. City Solicitors, Stewart M. Weintraub, Philadelphia, for appellant.

Park B. Dilks, Jr., Morgan, Lewis & Bockius, Philadelphia, for appellee.

Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy and Manderino, JJ. Nix, J., took no part in the consideration or decision of this case. Roberts, J., filed a dissenting opinion in which Eagen, J., joins.

Author: O'brien

[ 461 Pa. Page 250]

OPINION OF THE COURT

This appeal arises from an order of the Commonwealth Court which reversed the order of the Court of Common Pleas of Philadelphia. We granted allocatur.

The narrow issue presented in this appeal is whether appellee, Heintz Investment Company, is "engaged in business" within the meaning of ยง 19-1001 et seq., of the

[ 461 Pa. Page 251]

Code of General Ordinances of the City of Philadelphia. In the Code, "business" is defined as follows:

"The carrying on or exercising for gain or profit within the City any trade, business, profession, vocation, or making sales to persons within the City, or any manufacturing, commercial or financial activity, service or business, including but not limited to manufacturers, brokers, wholesale dealers or wholesale vendors, retail dealers or retail vendors."

Prior to 1957, appellee was engaged in the manufacturing business in Philadelphia, under the name "Heintz Manufacturing Company," and paid the proper gross-volume tax. In September of 1957, appellee sold its inventory and certain other assets, receiving cash and certain shares in the company which purchased the assets. Pursuant to the sales agreement of 1957, appellee leased its plant and plant site to a purchaser for a ten-year period with an option to renew for five years as well as an option to buy the plant. All expenses surrounding the leased building were paid by the lessee and appellee-lessor provided no services to lessee. The option to purchase provided for in the lease was exercised by lessee in September of 1967. Appellee thereafter changed its corporate name to Heintz Investment Company.

Subsequent to the 1957 sale of inventory, appellee, rather than distributing the proceeds to stockholders, held the capital and invested it and distributed the income from varied investments and the profits on the rental property. In 1958, appellee amended its corporate charter to allow the corporation "to invest in, own, hold, use, develop, improve, manage, operate, control real and personal property of any nature whatsoever, as principal only not as agent or broker. . . ." Also in 1958, appellee asked for and received an ...


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