Appeals from the Order of the Board of Finance and Revenue in cases of Commonwealth of Pennsylvania v. A.J. Wood Research Company of Pennsylvania, t/a Computer Letters, Inc., RST-90; and Commonwealth of Pennsylvania v. A.J. Wood Research Company of Pennsylvania, t/a Computer Letters, Inc., No. RST-91.
Phyllis E. Feibus, Assistant Attorney General, for appellant.
Michael H. Krekstein, Krekstein, Shapiro, Bressler & Wolfson, for appellee.
Milton A. Feldman, P.C., Clark, Ladner, Fortenbaugh and Young, for Amicus Curiae, Graphic Arts Association of Delaware Valley, Inc.
William P. Thorn, Wolf, Block, Schorr and Solis-Cohen, for Amicus Curiae, Communication Concepts, Inc.
Judges Rogers, Blatt and Williams, Jr., sitting as a panel of three. President Judge Crumlish and Judges Mencer, Rogers, Blatt, Williams, Jr., Craig and MacPhail. Judge Palladino did not participate. Opinion by Judge Craig. Dissenting Opinion by Judge Mencer. Judge Rogers joins in this dissent.
[ 60 Pa. Commw. Page 227]
In these two consolidated appeals by the Commonwealth from a sales tax reassessment and use tax refund granted by the Board of Finance and Revenue (Board) in favor of taxpayer A.J. Wood Research Company of Pennsylvania, trading as Computer Letters, Inc., the central common issue is
Does the taxpayer's use of computerized word processing equipment to produce a large number of letters and other materials, for distribution as direct mail advertising, fall within the printing exclusion of the Tax Reform Code of 1971 (Tax Code)?*fn1
Tax Code § 201(o)(4)(B)(i), as to use tax, excludes from tax the use of property in the "manufacture" of personal property, and Tax Code § 201(c)(2) defines manufacturing to include
(2) The publishing of books, newspapers, magazines and other periodicals and printing.
The Board held that the exclusion was applicable to the taxpayer's business activity.
From the stipulations submitted by the parties, and from the testimony and exhibits submitted in the course of evidentiary hearings, we make the following:
1. With respect to the taxpayer's business activity and product, and the method and equipment by which that product is produced, we hereby adopt in full the detailed initial stipulation submitted by the parties, consisting of thirteen paragraphs. (The key
[ 60 Pa. Commw. Page 228]
factual elements are summarized in the discussion below.)
2. The activity of printing consists in fact of the reproduction of multiple copies of graphic elements as a business. Beyond such basics, the opinions of experts, as well as dictionary and encyclopedic sources, differ irreconcilably as ...