Appeal from the Order of the Court of Common Pleas of Allegheny County in the case of Israel Oseroff v. City of Pittsburgh, a municipal corporation, and Ronald C. Schmeiser, Treasurer, City of Pittsburgh v. School District of Pittsburgh and Ronald C. Schmeiser, Treasurer, School District of Pittsburgh, No. SA 639-81 and No. SA 640-81.
Howard M. Alex, with him David Hoffman, Citron, Hoffman & Alex, P.C., for appellant.
Grace S. Harris, Assistant City Solicitor, with her Dante R. Pellegrini, for appellee, City of Pittsburgh.
David H. Dille, with him Robert J. Stefanko, for appellees, The Board of Public Education of the School District of Pittsburgh.
Judges Blatt, Craig and MacPhail, sitting as a panel of three. Opinion by Judge Craig.
[ 70 Pa. Commw. Page 295]
Taxpayer Israel Oseroff appeals the order of the Court of Common Pleas of Allegheny County which dismissed his appeal from the City of Pittsburgh's assessment of taxes under the city's business privilege (gross receipts) and earned income (net profits) tax ordinances and the Pittsburgh School District's assessment of taxes under its earned income tax ordinance.
Mr. Oseroff operated a manufacturing business in a building which was condemned for urban renewal in 1964. In 1966, when he was seventy-six years old, the
[ 70 Pa. Commw. Page 296]
taxpayer invested his compensation from the condemnation by purchasing another building located in Pittsburgh.
Since he acquired the second building, Mr. Oseroff has rented it continuously to the same tenant, under a net lease arrangement. The common pleas court found that Mr. Oseroff negotiates the lease, pays the real estate taxes and utilities for the property, has purchased insurance coverage on the property and has made repairs to the building's air conditioner, roof, elevator, electrical and plumbing systems. However, Mr. Oseroff provides no services to the tenant.
Mr. Oseroff has never filed net profits or gross receipts tax returns with the city or net profits tax returns with the school district. Pursuant to a treasurer's audit in 1980, the city imposed deficiency assessments against Mr. Oseroff, based on his rental income from the property, for earned income taxes, totaling $369.49, for the tax years from 1969 through 1972 and from 1976 through 1978,*fn1 and for gross receipts taxes, totaling $830.46, for the tax years from 1969 through 1979.*fn2 The school district has imposed a deficiency assessment of $528.71 against Mr. Oseroff, also based on his rental income, for earned income taxes*fn3 for the tax years 1969 through 1979.
We must decide whether the rent that Mr. Oseroff received from the second property is subject to the city's taxes on net profits and gross receipts and ...