EASTERN MILK PRODUCERS COOPERATIVE ASSOC. v. COMMONWEALTH PENNSYLVANIA (06/10/83)

Appeal from the Order of the Board of Finance and Revenue in case of Eastern Milk Producers Cooperative Association, Inc. v. Commonwealth of Pennsylvania, No. RST-3516.

COUNSEL

Harold G. Caldwell, Vineski, Brann, Williams & Caldwell, for petitioner.

Suellen M. Wolfe, Deputy Attorney General, with him Paul S. Roeder, Deputy Attorney General, and LeRoy S. Zimmerman, Attorney General, for respondent.

Judges Craig, MacPhail and Barbieri, sitting as a panel of three. Opinion by Judge MacPhail.

Author: Macphail

[ 75 Pa. Commw. Page 43]

Eastern Milk Producers Cooperative Association, Inc. (Petitioner) has brought this Petition for Review from an order of the Board of Finance and Revenue (Board) denying a refund of $15,359.23 for sales taxes paid on the purchase of tangible personal property in Pennsylvania.^*fn1

Findings of Fact

Petitioner and Respondent^*fn2 have filed a Stipulation of Facts which we hereby adopt.^*fn3

[ 75 Pa. Commw. Page 44]

Discussion

Petitioner is a non-stock co-operative corporation authorized and incorporated under the laws of the State of New York. Petitioner has capital and property employed in the Commonwealth. Petitioner seeks an exemption from the payment of sales and use taxes pursuant to the provisions of Section 3 of the Co-operative Agricultural Association Corporate Net Income Tax Act (Co-op Tax Act), Act of May 23, 1945, P.L. 893, as amended, 72 P.S. § 3420-23. Section 3 of the Co-op Tax Act provides:

Every 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, by or in the name of itself or any other person, partnership or association, a State excise tax at the rate of four per centum (4%) per annum upon each dollar of the net income, which tax shall be collected in lieu of any other excise tax^*fn4 [with exceptions and other provisions not here relevant]. (Emphasis added.)

However, Section 2 of the Co-op Tax Act, 72 P.S. § 3420-22, provides two crucial definitions fatal to Petitioner's claim to an exemption. For purposes of the Co-op Tax Act, a cooperative agricultural association is defined as "[a]n incorporated co-operative agricultural association, composed of persons engaged in agriculture and instituted for the purposes of mutual help, having capital stock." (Emphasis added.) Section 2 also provides a definition for ...