Appeal from the Order of the Court of Common Pleas of Berks County in case of Derr Enterprises, Inc. t/a West Lawn Beverage Co., Kohl Roofing & Siding Company and Chester Irwin, in their own right and on behalf of all others similarly situated v. Wilson School District and Clayton D. Rehrer, No. 3861 Equity Docket, 1974.
John A. Boccabella, with him Liever, Hyman & Potter, for appellants.
Calvin E. Smith, with him Stevens & Lee, for appellees.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Rogers, Blatt and DiSalle. Opinion by Judge DiSalle.
[ 33 Pa. Commw. Page 398]
This is an appeal by Derr Enterprises, Inc., t/a West Lawn Beverage Co., Kohl Roofing & Siding Company, and Chester Irwin (Appellants) from a Final Decree of the Court of Common Pleas of Berks County, sitting in equity.
On June 29, 1973, the Wilson School District, a third class School District, adopted a mercantile tax resolution pursuant to The Local Tax Enabling Act*fn1 (LTEA). The tax resolution divides businesses into three classes for purposes of computing the volume of business to be taxed. The first class consists of businesses that have been in operation for at least one full quarter prior to the date on which the tax is due.
[ 33 Pa. Commw. Page 399]
The second class consists of businesses that have commenced operation subsequent to the beginning of the tax quarter. The third class consists of businesses which are temporary, seasonal, or itinerant in nature. The first and third classes are taxed on the whole volume of business conducted during the tax quarter, while the second class is taxed on an estimated basis determined by multiplying the whole volume of business conducted in the first month of operation by the months and fraction thereof that the business was actually in operation during the quarter. The resolution also provided that the tax imposed is for the tax year commencing July 1, 1973 and ending June 30, 1974 and for tax years thereafter with an effective date "as provided by law."
On March 13, 1974, Appellants brought suit in equity against the Wilson School District and Clayton D. Rehrer, the mercantile tax officer, (Appellees) challenging the validity of the tax. Appellants sought to enjoin enforcement of the tax resolution and sought a refund of all taxes and penalties collected pursuant to it. After hearing before the Honorable Frederick Edenharter, sitting as Chancellor, the Appellants' prayer for relief was denied. Exceptions were filed and, following argument before the court en banc, were dismissed. This appeal followed.
The first issue raised by Appellants is whether the mercantile tax is invalid as a recurring tax because it remains in effect from year to year without annual reenactment. Appellants cite Section 672 of the Public School Code of 1949*fn2 (PSC) which provides pertinently:
(a) In all school districts of the second, third and fourth class, all ...