Appeal from the Order of the Board of Finance and Revenue in case of Appeal of J.L. Turner Co., Inc., Docket No. RST-94.
Thomas L. Wenger, with him Wix, Wenger & Weidner, for appellant.
Paul S. Roeder, Deputy Attorney General, for appellee.
Judges Crumlish, Jr., Blatt and Craig, sitting as a panel of three. Opinion by Judge Blatt.
[ 41 Pa. Commw. Page 147]
The J.L. Turner Company (petitioner) has appealed to this Court from a decision of the Board of
[ 41 Pa. Commw. Page 148]
Finance and Revenue (Board) assessing it $12,467.44 plus "appropriate interest" for use taxes incurred during the period between January 1, 1969 and March 31, 1972. A hearing de novo was held before this Court on April 10, 1978, at which counsel for the petitioner and the Board submitted exhibits, testimony and several stipulated facts which form the record for this appeal.
The stipulated facts are as follows:
1. The petitioner is J.L. Turner Company, a Pennsylvania corporation having its principal place of business at Keith Street, Wilkes-Barre, Luzerne County, Pennsylvania 18702.
2. The petitioner is engaged in business as a plumbing and heating contractor which sells and installs personal property into machinery and equipment to be used directly by public utilities in the rendering of a public utility service to the public.
3. The Bureau of Sales and Use Tax of the Pennsylvania Department of Revenue performed a sales and use tax audit of the petitioner's business for the period of January 1, 1969 through March 31, 1972, which was performed by the auditor, Andrew S. Kolibob, from April 24, 1972 through August 15, 1972.
4. On September 27, 1973, the Pennsylvania Department of Revenue, Bureau of Taxes for Education, mailed to the petitioner a Notice of a Use Tax Assessment for the period of January 1, 1969 to March 31, 1972.
5. Said assessment was in the following amounts:
Total Assessment $16,317.64
[ 41 Pa. Commw. Page 1496]
. The petitioner duly filed a Petition for Reassessment with the Department of Revenue, Bureau of Taxes for Education, Board of Review, with respect to said assessment.
7. After the hearing, the Board of Review rendered a Decision and Order, dated and mailed August 20, 1973, sustaining the assessment but abating the penalties imposed by said assessment.
8. The petitioner duly filed with the Board of Finance and Revenue, a Petition for Review of the Decision and Order of the Board of Review.
9. After a hearing on the Petition for Review, the Board of Finance and Revenue rendered an Order, dated February 27, 1974, and mailed March 1, 1974, reassessing the tax imposed as follows:
Use Tax $12,467.44, plus appropriate interest.
10. Being aggrieved by the said Order of the Board of Finance and Revenue, the petitioner appealed to the Commonwealth Court of Pennsylvania by an Appeal dated April 29, 1974.
11. The petitioner on September 27, 1972, was mailed the Notice of Audit Assessment, a copy of which is attached hereto as Exhibit "A" and is made a part hereof and made a part of the Record in this case.
12. The following items are Exhibits, which are true and correct copies and shall be made a part of the record in this case:
(a) Exhibit "B" -- Use Tax Work Papers (RTE-343)
(b) Exhibit "C" -- Memorandum of September 5, 1972, from Daniel Kelly to Andrew Kolibob
(c) Exhibit "D" -- Schedule 1 -- Disallowed Discount on Use Tax
(d) Exhibit "E" -- Petitioner's Sales and Use Tax Returns for the audit period.
[ 41 Pa. Commw. Page 150]
Following a review of the testimony and exhibits presented at the April 10, 1978 hearing, this Court makes the following additional findings of fact:
1. A use tax in the amount of $865.55 was assessed against the petitioner for merchandise purchased by it in 1969 and 1970 for use in its construction contract for the installation of an oxygen system at the Nanticoke State Hospital. The merchandise so purchased included an oxygen alarm, regulators, shut-off valves and other miscellaneous "oxygen system" items which were installed on the walls of the hospital rooms and hallways to provide more flexibility in the hospital's previously existing oxygen system which was within the hospital walls.
2. A use tax in the amount of $1,170 was assessed against the petitioner for merchandise purchased by it in 1970, that being component mechanical equipment devices used to treat sewage. This merchandise was sold to the Delaware Valley High School to be installed by another contractor, to allow the school to discharge its waste.
3. A use tax in the amount of $241.08 was assessed against the petitioner for the purchase of piping materials used by it to extend the Hazleton Municipal Sewer to a Catholic high school with such materials extending approximately five feet into the school building when installed.
4. A use tax in the amount of $204.23 was assessed against the petitioner for the purchase in 1970 of tubing from Croft and List, a mechanical contracting company which was going out of business. This tubing was primarily used in connection with the construction contract with the Department of General Services and was installed in the Kingston Armory for water distribution purposes. No documentary proof was submitted
[ 41 Pa. Commw. Page 151]
regarding whether or not Croft and List had paid a use tax on this tubing to its vendor.
5. A use tax in the amount of $39.60 was assessed against the petitioner for the purchase of merchandise in 1970 for use in its construction contract for the installation of a water cooling system used by the Metropolitan Wire Co. directly in its manufacturing process of making metal shelves from raw steel.
6. A use tax in the amount of $35.75 was assessed against the petitioner on gas control devices which it purchased and installed in the building of the De Sota Quartite Company, a manufacturer of quartz lamps. These devices were to be used in the manufacturing process by De Sota Quartite.
7. A use tax in the amount of $122.36 was assessed against the petitioner for the purchase of pipes and bends in 1970 used in its contract to install an underground water line at the Wilkes-Barre Housing Authority.
8. A use tax in the amount of $241.50 was assessed against the petitioner for the purchase in 1970 of a unit to supply hot water for baths and hydrotherapy which was installed at the St. Stanislaus Nursing Home operated by the Catholic Church.
9. A use tax in the amount of $129.42 was assessed against the petitioner for its purchase in 1970 of a swimming pool filtration system which it installed at the Wyoming Seminary School in Kingston, Pennsylvania.
10. A use tax in the amount of $43.65 was assessed against the petitioner for its purchase in 1970 of a water treatment system which was a free standing unit not permanently attached to ...