Appeal from the Order of the Court of Common Pleas of York County in case of Paul L. Smith, Inc., Ervin L. Hare and Genevieve W. Hare, his wife, Baycrest Homes, Inc. and York County Builders v. Southern York County School District, No. 77-S-1819.
J. Richard Oare and Leo E. Gribbin, Jr., with them, Stetler & Gribbin, for appellants.
Howell C. Mette, with him Jeffrey C. Bortner, Jack M. Stover, and Shearer, Mette and Woodside, for appellee.
President Judge Bowman and Judges Wilkinson, Jr., Mencer, Rogers, Blatt, DiSalle and MacPhail. Judges Crumlish, Jr. and Craig did not participate. Opinion by Judge MacPhail.
[ 44 Pa. Commw. Page 229]
On May 26, 1977, the Southern York County School District (District) adopted a Residential Construction Tax Resolution (Resolution) for general revenue purposes imposing a tax of $875.00 on (1) the privilege and transaction of applying for a building permit from any municipality to construct a residence or to convert an improvement to realty into a residence within the District and (2) the privilege and transaction of constructing a residence or converting an improvement to realty into a residence within the District where a municipality within the District does not require a building permit. The obligation to pay the tax is imposed upon the legal owner of the real estate upon which the construction or conversion occurs. The District estimates that it will obtain approximately $75,000.00 in revenue from the tax.
On July 1, 1977, Paul L. Smith, Inc., the York County Builders Association, Baycrest Homes, Inc. and Ervin L. and Genevieve W. Hare (collectively, Appellants) filed a complaint in equity in the York County Court of Common Pleas seeking to enjoin collection of the tax. In a comprehensive opinion the complaint was dismissed by the York County Court of Common Pleas and Appellants appealed to us contending that: (1) the Resolution violates the equal protection and due process clauses of the fourteenth amendment to
[ 44 Pa. Commw. Page 230]
the United States Constitution; (2) the Resolution violates the uniformity clause of the Pennsylvania Constitution; and (3) the lower court erred when it refused to determine the validity of the Resolution under Section 6 of The Local Tax Enabling Act (Act), Act of December 31, 1965, P.L. 1257, as amended, 53 P.S. § 6906.
Appellants contend that the Resolution violates the equal protection clause of the United States Constitution because it arbitrarily and unreasonably discriminates between those who acquire residences by purchasing existing residences in the District and those who acquire residences in the District by construction or by conversion of nonresidential structures. It is well established that the Commonwealth and its political subdivisions are subject to the requirements of equal protection and uniformity in the exercise of the taxing power. Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522 (1959). However, the taxing authority must, by necessity, possess wide discretion for purposes of taxation of various businesses or occupations. Commonwealth v. Life Assurance Co. of Pennsylvania, 419 Pa. 370, 214 A.2d 209 (1965). The equal protection clause imposes no iron rule of equality prohibiting that degree of flexibility and variety appropriate to reasonable schemes of taxation. Commonwealth v. Life Assurance Co. of Pennsylvania, supra.
So long as the classification imposed is based upon some standard capable of reasonable comprehension, be that standard based upon ability to produce revenue or some other legitimate distinction, equal protection of the law has been afforded. . . .
In terms of our previous decisions and the decisions of the Supreme Court of the United States the essential question in testing the validity of such ...