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THOMAS A. LEONARD AND KATHLEEN LEONARD AND GRAVELEY ROOFING CORPORATION v. RICHARD L. THORNBURGH (05/31/84)

decided: May 31, 1984.

THOMAS A. LEONARD AND KATHLEEN LEONARD AND GRAVELEY ROOFING CORPORATION, PETITIONER
v.
RICHARD L. THORNBURGH, GOVERNOR, COMMONWEALTH OF PENNSYLVANIA, AND JAMES I. SCHEINER, SECRETARY OF REVENUE, COMMONWEALTH OF PENNSYLVANIA, AND WILLIAM J. GREEN, MAYOR, CITY OF PHILADELPHIA, AND JOSEPH W. BROWN, DIRECTOR OF FINANCE, CITY OF PHILADELPHIA, AND EUGENE L. CLIETT, JR., REVENUE COMMISSIONER, CITY OF PHILADELPHIA, RESPONDENTS



Original jurisdiction in the case of Thomas A. Leonard and Kathleen Leonard and Graveley Roofing Corporation v. Richard L. Thornburgh, Governor, Commonwealth of Pennsylvania, and James I. Scheiner, Secretary of Revenue, Commonwealth of Pennsylvania, and William J. Green, Mayor, City of Philadelphia, and Joseph W. Brown, Director of Finance, City of Philadelphia and Eugene L. Cliett, Jr., Revenue Commissioner, City of Philadelphia.

COUNSEL

Thomas A. Leonard, with him, James P. Leonard and Steven L. Friedman and Edmunds J. Brokans, Dilworth, Paxson, Kalish and Kauffman, for petitioners.

Maura A. Johnston, Deputy Attorney General, with her, Robert Coyne, Deputy Attorney General, Allen C. Warshaw, Deputy Attorney General, Chief of Special Litigation, LeRoy S. Zimmerman, Attorney General, and Richard J. Welsh, for respondents, Richard L. Thornburgh, Governor and James I. Scheiner, Secretary of Revenue, Commonwealth of Pennsylvania.

Barbara W. Mather, City Solicitor, with her, Jill A. Douthett, Divisional Deputy City Solicitor, John M. Myers, Deputy City Solicitor, Janet S. Holcombe, Assistant City Solicitor, and Pamela L. Perry, Chief Assistant City Solicitor, for respondents, Green, Brown and Cliett, Jr.

Charles W. Bowser, with him, Kevin William Gibson, Pechner, Dorfman, Wolffe, Rounick & Cabot, for Amicus Curiae, City Council of Philadelphia.

Ronald Witkowski, Montgomery, McCracken, Walker and Rhoads, for Amicus Curiae, Non-Resident Taxpayers Association.

President Judge Crumlish, Jr. and Judges Williams, Jr., Craig, MacPhail, Barry and Colins. Opinion by President Judge Crumlish, Jr. Judges Rogers and Doyle did not participate in the decision in this case.

Author: Crumlish

[ 83 Pa. Commw. Page 3]

Kathleen Leonard and Secretary of Revenue James I. Scheiner each have filed cross-motions for summary judgment in this action where at issue is the constitutionality of Section 359(b) of the Tax Reform Code of 1971,*fn1 the so-called Philadelphia Non-Resident Wage Tax Cap, and Philadelphia Ordinance No. 1716.*fn2 We deny Secretary Scheiner's motion and

[ 83 Pa. Commw. Page 4]

    grant Leonard's motion for summary judgment in part, declaring the Non-Resident Wage Tax Cap and Ordinance No. 1716 to be unconstitutional. This holding is prospective, and we rule that it is to take effect on the first day of July, 1984.

History of Case

On June 2, 1983, Philadelphia City Council enacted Ordinance No. 1716, which had an effective date of July 1, 1983, and amended the City's Wage and Net Profits Tax by increasing the tax rate from 4 5/16% for all taxpayers to 4 96/100% for Philadelphia residents only. The rate for all non-resident taxpayers remained at 4 5/16%.

On June 27, 1983, Leonard*fn3 filed a petition for review in this Court's original equity jurisdiction challenging the constitutionality of Ordinance No. 1716 and the Philadelphia Non-Resident Wage Tax Cap. Leonard also sought preliminary and permanent enjoinment of the statutory cap and the city ordinance. On July 19, 1983, President Judge Crumlish, Jr., issued a Memorandum Opinion and Order, Leonard v. Thornburgh (Leonard I), 75 Pa. Commonwealth Ct. 553, 463 A.2d 77 (1983), which denied Leonard's request for preliminary injunction but expressed his opinion that, when it would be ultimately decided, the Non-Resident Cap would likely be struck down. The Court en banc heard the preliminary objections of

[ 83 Pa. Commw. Page 5]

Governor Thornburgh and Secretary of Revenue Scheiner on September 13, 1983, and issued an Opinion and Order on November 4, 1983, which removed the Governor as a party but retained Secretary Scheiner as a proper party. On February 24, 1984, Leonard and Secretary Scheiner filed the cross-motions for summary judgment which are now before us for disposition.

Discussion and the Law

Leonard contends that the taxing schematic on wages earned by the City's residents and non-residents is violative of Article VIII, Section 1 of the Pennsylvania Constitution,*fn4 the so-called "Uniformity Clause," which provides:

All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.

This Court, in Carl v. Southern Columbia Area School District, 41 Pa. Commonwealth Ct. 527, 530, 400 A.2d 650, 652 (1979), ...


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