Roberts R. Appel, T. Roberts Appel, II, Appel, Herr & Appel, Lancaster, for appellant.
Vincent J. Dopko, Deputy Atty. Gen., for appellee.
Gilbert Nurick, McNees, Wallace & Nurick, Harrisburg, for amicus curiae, Cleveland Elec. Illuminating Co.
Albert J. Tomalis, Jr., Metzger, Hafer, Keefer, Thomas & Wood, Harrisburg, for amicus curiae, Pennsylvania Power Co.
Harry J. Rubin, Harrisburg, for amicus curiae, Public Service Elec. & Gas Co., Pennsylvania Elec. Co., Metropolitan Edison Co., Jersey Central Power & Light Co.
Eagen, O'Brien, Roberts, Nix and Manderino, JJ. Jones, former C. J., and Pomeroy, J., did not participate in the consideration or decision of this case.
The issue presented is whether, under the Public Utility Realty Tax Act (PURTA),*fn1 the dam, dikes, and canal of the Muddy Run Pump Storage Hydro-Electric Project (Muddy Run Project) constitute taxable utility realty or excluded machinery or equipment. The Commonwealth Court concluded that the dam, dikes, and canal, owned by Philadelphia Electric Company (Philadelphia Electric), were taxable utility realty under PURTA. In our view, the stipulation of the parties establishes that the dam, dikes, and canal are machinery and equipment as previously defined by this Court. We hold, therefore, that
they are excluded from taxation under PURTA, and reverse.
A. PURTA imposes a tax upon utility realty, payable to the Commonwealth. In its tax returns for 1970 and 1971, Philadelphia Electric included the value of the dam, dikes, and canal of the Muddy Run Project as utility realty and paid $924,179.00 in taxes on these items. Philadelphia Electric has since concluded that this property is excluded from taxation as machinery and equipment. It filed a timely petition with the Board of Finance and Revenue for refund of the nearly one million dollars.*fn2 The Board of Finance and Revenue denied the petition, and Philadelphia Electric ...