Appeal from the Order of the Court of Common Pleas of the 26th Judicial District of the Commonwealth of Pennsylvania, Columbia County Branch, in case of Leon Carl, Eugene Fetterman, Eleanor Miller, Mildred F. Fetterman, John W. Martin, Carl F. Roeder, Albert A. Retallack, Laura Breech, Barbara A. Taylor, Faye Sober, George E. Miller, Samuel Beaver, Larry H. Moss, Donald Adamski, John R. Jurgill, Kenneth D. Williams, Robert E. Rarich, Kimber Deeter, Margaret Deeter, Larry Wintersteen, Clarence Keller, Otis Taylor, Charles W. Troy, III, Barbara M. Troy and Rodney Kreischer v. Southern Columbia Area School District, No. 1222 of 1977.
Richard J. Roberts, Jr., with him Jack C. Younkin, and Leavens, Younkin & Roberts, for appellant.
James F. Geddes, Jr., for appellees.
President Judge Bowman and Judges Crumlish, Jr., Mencer, Blatt, DiSalle, Craig and MacPhail. Judges Wilkinson, Jr. and Rogers did not participate. Opinion by Judge Blatt. Judge MacPhail dissents.
[ 41 Pa. Commw. Page 529]
This is an appeal by the Southern Columbia Area School District (School District) from an order of the Court of Common Pleas of Columbia County declaring the School District's occupation tax unconstitutional.
Pursuant to the provisions of The Local Tax Enabling Act,*fn1 the School District, which is comprised of six municipalities located in Columbia County and one municipality in Northumberland County, initially enacted an occupational tax for the fiscal year July 1, 1975 to July 1, 1976, at a rate of 53% of the assessed occupational valuation. Subsequently this tax was re-enacted for the fiscal year July 1, 1976 to July 1, 1977, at 90%, and for the fiscal year July 1, 1977 to July 1, 1978, at 100% of the assessed occupational valuation. The assessed valuations for the various occupations were set for all years assessed by the county commissioners and chief assessors in each of the two counties of Northumberland and Columbia.*fn2 Because the valuations made by the respective county officials were not identical, however, the result was that the taxes imposed on residents of Columbia County were substantially higher than those imposed on persons engaged in the same occupations living in
[ 41 Pa. Commw. Page 530]
Northumberland County. Twenty-five residents and taxpayers of the School District, who are appellees here, then appealed the imposition of the levy for the fiscal year July 1, 1977 to July 1, 1978,*fn3 and the court below found that the tax as levied by the School District contained an impermissible lack of uniformity and therefore violated Article 8, Section 1 of the Constitution of the Commonwealth of Pennsylvania. In addition to declaring the tax unconstitutional, the court also ordered a refund by the School District of the occupation taxes paid by the appellees for the fiscal year July 1, 1977 to July 1, 1978. This appeal followed.
The Constitution of the Commonwealth of Pennsylvania, Article 8, Section 1 provides as follows:
All taxes shall be uniform, upon the same class of subjects within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.
This so-called uniformity clause applies to occupation taxes. Crosson v. Downington Area School District, 440 Pa. 468, 270 A.2d 377 (1970). And, as we have previously stated in School District of Philadelphia v. W.T. Grant Corp., 19 Pa. Commonwealth Ct. 402, 339 A.2d 628 (1975), it requires that two conditions be met: (1) that the classification of taxpayers subject to a specified tax must be reasonable; and (2) that the tax itself must be applied equally within the designated class. If either condition fails, the tax is unenforceable for want of uniformity.
The School District contends here that the classification of residents according to county is not unreasonable, maintaining that the classification has not been made ...