No. 81-2-262, No. 81-2-263, Cross-Appeals from Order of the Commonwealth Court of Pennsylvania dated October 7, 1980 in No. 1140 C.D. 1979 reversing and remanding the final determination of the Bureau of Employment Security, Department of Labor and Industry, dated May 24, 1979.
Mary Ellen Krober, Allen C. Warshaw, Deputy Attys. Gen., Harrisburg, for Com. of Pa.
J. Jackson Eaton, III, Allentown, for Lehigh Valley Co-op. Farmers.
O'Brien, C. J., and Roberts, Nix, Larsen, Flaherty, McDermott and Hutchinson, JJ. Nix, J., concurred in the result.
The sole issue in this case is whether cooperative agricultural associations are exempt from paying unemployment compensation taxes. During the four-year period from the third quarter of 1973 to the second quarter of 1977, Lehigh Valley Cooperative Farms [hereinafter "Lehigh Valley"], a cooperative agricultural association, paid unemployment
compensation taxes totaling $357,733.42. At that time, Lehigh Valley believed that it was legally obligated to pay those taxes. In 1977, Lehigh Valley applied for a refund but the Bureau of Employment Security [hereinafter "Bureau"] denied the request. Lehigh Valley appealed and the Commonwealth Court determined that Lehigh Valley was entitled to a refund.*fn1 The Court, however, limited the refund to taxes paid within ninety days of the refund application. See Lehigh Valley Cooperative Farmers v. Commonwealth of Pennsylvania, Bureau of Employment Security, 55 Pa. Commw.Ct. 13, 423 A.2d 18 (1980). The Bureau then petitioned for allowance of appeal. Lehigh Valley also petitioned for allowance of appeal, claiming a refund for the entire four year period. We granted both parties' petitions. We find that Lehigh Valley is not exempt from paying unemployment compensation taxes, and hence not entitled to a refund, for any period.*fn2 We therefore reverse.
The Cooperative Agricultural Association Net Income Tax Act, Act of May 23, 1945, P.L. 893, § 3, 72 P.S. § 3420-23 (Supp. 1982-83) [hereinafter "Cooperative Tax Act"], provides:
Every [cooperative agricultural] association shall be subject to, and shall pay for, the privilege of doing business in this Commonwealth, or having capital or property employed or used in the Commonwealth . . . a state excise tax at the rate of four per centum (4%) per annum upon each dollar of net income, which tax shall be collected in lieu of any other excise tax including corporate net income tax or property tax . . . . (Emphasis added)
Lehigh Valley argues that since both this Court and the Supreme Court of the United States have stated that an employer's ...