Appeal from the Order of the Board of Finance and Revenue in case of In Re: Universal Carloading and Distributing Co., Inc.
Burton H. Snyder, with him McNees, Wallace & Nurick, for appellant.
Joseph F. Lynch, Deputy Attorney General, with him Donald J. Murphy, Deputy Attorney General, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by President Judge Bowman.
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This is an appeal from an order of the Board of Finance and Revenue which refused a petition for
[ 29 Pa. Commw. Page 554]
review by Universal Carloading and Distributing Co., Inc. (appellant) with respect to its foreign franchise tax*fn1 for 1969. The facts have been stipulated and are as follows.
Appellant is a Delaware corporation with its principal office in New York, and it has had, since 1933, a certificate of authority to do business in Pennsylvania. Appellant operates as a freight forwarder of commodities generally in interstate commerce between all points in the United States and is subject to regulation by the Interstate Commerce Commission. Appellant owns no trucks, tractors or trailers in Pennsylvania and does not itself transport freight. Appellant does contract with railroads and trucking companies to transport freight in carload or truckload lots and specializes in transportation of small shipments. Appellant derives income from the spread between the carload or truckload charges which appellant pays and the higher rates paid to appellant by its customers for the transportation of their less-than-carload shipments. All freight handled by appellant in Pennsylvania either originates or terminates in the Commonwealth but never does both; that
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is, appellant is engaged exclusively in interstate commerce.*fn2 Appellant leases four freight stations in Philadelphia, Pittsburgh, Wilkes-Barre and York and owns forklift trucks and office equipment which are used in Pennsylvania. Appellant has 106 employees in Pennsylvania, including freight handlers, clerical workers and managers, some of whom solicit orders and collect monies in connection with the shipments.
Prior to 1969, appellant had never filed a foreign franchise tax return and did so for that year under compulsion from the Bureau of Corporation Taxes.*fn3 Appellant's sole contention here is that this tax, as applied to it, is a tax on the privilege of engaging in interstate commerce and, therefore, violates the Commerce Clause of the United States Constitution,*fn4 which grants exclusive power to regulate interstate commerce to the Federal government.
This case is indistinguishable from and controlled by Complete Auto Transit, Inc. v. Brady, 45 U.S.L.W. 4259 (U.S. March 7, 1977), which was handed down subsequent to the filing of briefs and oral argument in this case. In Complete Auto Transit, supra, the United States Supreme Court unanimously held that a Mississippi tax on the privilege of doing business in the state did not violate the Commerce Clause when applied to the appellant's interstate activity (transportation of motor ...