Appeal from the Order of the Board of Finance and Revenue in case of In Re: B. Kenneth Simon, No. RST-3437.
Michael A. Steger, Smiley and McGinty, for petitioner.
Paul S. Roeder, Deputy Attorney General, for respondent.
Judges Mencer, Rogers and Williams, Jr., sitting as a panel of three. Opinion by Judge Mencer.
[ 55 Pa. Commw. Page 226]
B. Kenneth Simon (petitioner) appeals from an order of the Board of Finance and Revenue which affirmed a decision of the Board of Appeals of the Department of Revenue denying petitioner's claim for a refund of sales tax. We affirm.
The facts are not disputed. On October 17, 1973, petitioner, who is president and sole shareholder of All-Pak, Inc. (All-Pak), contracted with the Burroughs Corporation (Burroughs) to purchase computer equipment for use by All-Pak. Petitioner paid a sales tax to Burroughs on this purchase. Upon the receipt of the computer equipment on or about July 1, 1974, petitioner entered into a lease-purchase agreement with All-Pak. In December of 1978, the Department of Revenue, pursuant to an audit, levied a use tax assessment against All-Pak upon this same equipment. All-Pak paid the use tax and, on January 17, 1979, petitioner filed a petition for a refund of the sales tax, pursuant to Section 256 of the Tax Reform Code of 1971 (Code), Act of March 4, 1971, P.L. 6, as amended, 72 P.S. § 7256. The refund was denied by the administrative hearing boards.
The Commonwealth admits that petitioner could not properly be assessed for the sales tax, since his purchase would be exempted as either (1) a resale under Section 201(i) of the Code, 72 P.S. § 7201(i); (2) a purchase of equipment for the purpose of renting to others or an isolated sale under Section 204 of the Code, 72 P.S. § 7204; or (3) an acquisition under
[ 55 Pa. Commw. Page 22761]
Pa. Code § 31.32(g)(1), pertaining to resale or rental of computer equipment. Since petitioner voluntarily, and erroneously, paid the sales tax, he would be entitled to a refund pursuant to Section 253, of the Code, 72 P.S. § 7253, which provides that a petition for refund shall be filed "with the department within three years of the actual payment of the tax." (Emphasis added.) It is undisputed that petitioner has not timely filed for refund under Section 253, and the Commonwealth argues that his petition should, therefore, be dismissed.
Petitioner contends, however, that the statute of limitations is extended in his case by virtue of Section 256 of the Code, which reads, in pertinent part:
Any party to a transaction who has paid tax by reason of a transaction with respect to which the department is assessing tax against another person may, within six months after the filing by the department of the assessment against such other person, file a special petition for refund, notwithstanding his failure to file a regular petition within three years of the payment. . . . The purpose of this section is to avoid duplicate payment of tax where a determination is made by the department that one party to a transaction is subject to tax, and another party to the transaction has previously paid tax with respect to such transaction and, as such, this section shall be construed as extending right beyond that provided for by Section 253, and not to limit such other section. (Emphasis added.)
Petitioner argues that he is entitled to relief under this section because he acquired the computer equipment for the sole purpose of leasing it to All-Pak. Thus, ...