No. 74 W.D. Appeal Dkt. 1983, Appeal from the Order of the Commonwealth Court, No. 1847 C.D. 1982, dated June 2, 1983 Affirming the Orders of the Common Pleas Court of Allegheny County, No. SA 681-1981, 74 Pa. Commw 576,
Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ.
This is an appeal by Bindex Corporation (hereinafter "Bindex") from an order of the Commonwealth Court affirming the order of the Allegheny County Court of Common Pleas which instructed Bindex to pay the City of Pittsburgh, appellee, a business privilege tax for its operations
as a trade bindery during the years 1976 through 1980.
The contested tax was imposed pursuant to the Local Tax Enabling Act (hereinafter "LTEA")*fn1 which permits local taxing authorities, such as appellee, to enact ordinances taxing "persons, transactions, occupations, privileges, subjects and personal property" within its political subdivisions. LTEA, however, prohibits local taxing authorities from levying taxes on manufacturers.*fn2 Therefore, the sole issue for our discussion is whether Bindex qualifies for the manufacturing exemption provided in LTEA.
Bindex is essentially a bookbinder. It receives from the printer the printed sheets of a proposed book. When one intends to publish a book, they must do more than print the pages. The pages must be cut from the large flat sheets of varying sizes, cut to uniformity and sequenced. The proposed pages may vary in color, weight and texture, requiring skill and labor to paste, sew, cut, fold, fasten and assemble into the proposed book. Bindex contends they make something different, new and usable from the material they receive. They contend that while they do not conceive or print the pages, arrange the typography or the layout, what they do, through skill and labor, makes what was processed into what was intended, a book. We agree.
Because there exists no statutory definition of the term, "manufacturing" we must look for the judicial definition given to it by our courts. A definition of the term manufacturing can be traced over a century ago to Norris Brothers v. Commonwealth, 27 Pa. 494 (1856), where this Court said:
[Manufacturing] does not often mean the production of a new article out of material entirely raw. It generally consists in giving new shapes, new qualities; or new combinations to matter which has already gone through some other artificial process.
In Philadelphia School District v. Parent Metal Productions, Inc., 402 Pa. 361, 167 A.2d 257 (1961) we further added to the definition that "manufacturing":
Id., 402 Pa. at 364, 167 A.2d at 258-259. Because the definition should be read in the light of its purpose of taxation, we endeavored to relieve it of excessive ...