No. 97 May Term, 1977, Appeal from Order of Commonwealth Court, at No. 1124 C.D. 1974
Albert J. Tomalis, Jr., Harrisburg, for appellant.
Robert P. Kane, Atty. Gen., Paul S. Roeder, Deputy Atty. Gen., for appellee.
Eagen, C. J., and O'Brien, Roberts, Pomeroy, Nix, Manderino and Larsen, JJ. Pomeroy, J., concurs in the result. Manderino, J., files a dissenting opinion.
Appellant, Ragnar Benson, Inc. (Benson), an engineering and construction firm, designed and built two cooling towers at the Philadelphia Electric Corporation's Limerick power plant near Pottstown, Pennsylvania.*fn1 Benson was assessed a use tax by appellee, Commonwealth of Pennsylvania, on certain items and material used in the construction of the cooling towers.*fn2 In August and September of 1972, the Commonwealth completed an audit of Benson's business activities in connection with the construction of the Limerick cooling towers. As a result of this audit, Benson was assessed $3,206.03. This amount represented the Commonwealth's determination of Benson's deficiency in the use tax payable to the Commonwealth. Benson filed a petition for reassessment with the Commonwealth Sales Tax Board of Review, contesting $582.80 out of the $3,206.03 deficiency sought by the Commonwealth. The Sales Tax Board of Review denied Benson's petition. Benson then sought relief by filing a petition for review with the Board of Finance and Revenue. The Board of Finance and Revenue determined
that of the $582.80 contested by Benson, $161.78 was mistakenly assessed as due and owing delinquent use tax. Benson then appealed to the Commonwealth Court. On November 24, 1976, Commonwealth Court granted Benson additional tax relief in the amount of $13.91, thereby reducing the amount in controversy before this court to $407.11. On December 22, 1976, Benson filed exceptions to the Commonwealth Court's order, and on December 23, 1977, the Commonwealth filed exceptions contesting the continued validity of Commonwealth v. Erie Excavating & G. Co., 432 Pa. 593, 248 A.2d 191 (1968).
Commonwealth Court, on June 16, 1977, denied both sets of exceptions and entered a final judgment in favor of the Commonwealth. On July 13, 1977, Benson filed an appeal to this court. The Commonwealth has not filed an appeal or a cross-appeal from the final order of the Commonwealth Court in the instant case.*fn3
Appellant argues that it is entitled to a public utility exemption from the Pennsylvania Use Tax. We do not agree.
The use tax was assessed under the Tax Reform Code of 1971, Act of March 4, 1971, P.L. 6, No. 2, art. I, § 101, et seq., 72 P.S. § 7101, et seq. The applicable rate is six percent of the purchase price of the subject property. Art. II, § 202(b). Taxable uses include:
"The exercise of any right or power incidental to the ownership, custody or possession of tangible personal property and shall include, but not be limited to transportation, storage or ...