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JEWELCOR INCORPORATED v. COMMONWEALTH PENNSYLVANIA (10/28/80)

decided: October 28, 1980.

JEWELCOR INCORPORATED, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, RESPONDENT



Appeal from the Order of the Board of Finance and Revenue, Pennsylvania Department of Revenue, in case of In Re: Jewelcor Incorporated, Docket No. RRT-2160.

COUNSEL

Howard M. Levinson, with him Eugene Roth, Rosenn, Jenkins & Greenwald, for petitioner.

Vincent J. Dopko, Deputy Attorney General, for respondent.

President Judge Crumlish and Judges Mencer, Rogers, Blatt, Craig, MacPhail and Williams, Jr. Judge Wilkinson, Jr. did not participate. Opinion by President Judge Crumlish. Judge Mencer and Judge Williams, Jr., dissent.

Author: Crumlish

[ 54 Pa. Commw. Page 388]

Jewelcor, Inc., appeals from a Board of Finance and Revenue decision denying it "industrial corporation"

[ 54 Pa. Commw. Page 389]

    exclusion status under the Realty Transfer Tax Act.*fn1 Upon careful review, we reverse.

Jewelcor, a diversified Pennsylvania corporation with both retail and industrial subdivisions, was engaged in a progressively expanding printing business in Pittston, Pennsylvania. In 1966, the Pittston Chamber of Commerce, a non-profit industrial development agency, proposed that Jewelcor lease an improved parcel of land located in West Pittston for the purpose of developing larger printing facilities. On October 25, 1966, Jewelcor accepted the Chamber's proposal and entered into a 20-year lease agreement with an option to purchase at the end of the leasehold.

In 1975, Jewelcor's printing facility was completely destroyed by fire, thus accelerating the lease's purchase option provisions. The Chamber then transferred the property to Jewelcor on September 28, 1976, for a $1.00 nominal consideration. For the calendar year 1976, Jewelcor accumulated gross income of $41,844,000, of which $3,323,000 or 8% was attributable to the printing division, and $38,521,600 or 92% to its retail jewelry business. Consequently, the Department of Revenue assessed a realty transfer tax on the September 28th conveyance in accordance with Section 3 of the Act, 72 P.S. § 3285, which subjects any "document" presented for recording to a tax of one percent of the value of the property represented by such documents.

Jewelcor argues that Section 2 of the Act, 72 P.S. § 3284, which defines "document" as

[a]ny deed, instrument or writing whereby any lands, tenements or hereditaments within this Commonwealth or any interest therein shall be ...


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