Appeal from the Order of the Court of Common Pleas of Allegheny County, in case of Harsco Corporation v. City of Pittsburgh, No. GD 82-12576.
Kenneth K. Kilbert, with him, Frank T. Guadagnino, Reed, Smith, Shaw & McClay, for appellant.
Ronald H. Pferdehirt, Assistant City Solicitor, with him, D. R. Pellegrini, City Solicitor, for appellee.
Judges Craig and MacPhail, and Senior Judge Blatt, sitting as a panel of three. Opinion by Judge Craig.
The Harsco Corporation appeals an order of the Court of Common Pleas of Allegheny County, which dismissed Harsco's post-trial motion and directed entry of judgment in favor of the City of Pittsburgh. Trial Judge Silvestri held that Harsco was not entitled to a tax refund*fn1 because the business activity in which Harsco engages -- the removal of iron from raw slag -- does not constitute "manufacturing," and Harsco is therefore subject to the Business Privilege Tax of the City of Pittsburgh*fn2 consistent with section 2(4) of the Local Tax Enabling Act.*fn3
Pertinent to this appeal, the Local Tax Enabling Act provides:
Such local authorities shall not have authority by virtue of this act:
(4) To levy, assess and collect a tax on goods and articles manufactured in such political subdivision or on the by-products of manufacture, or on minerals, timber, natural resources and farm products produced in such political subdivision or on the preparation or processing thereof for
use or market, or on any privilege, act or transaction related to the business of manufacturing, the production, preparation or processing of minerals, timber and natural resources, or farm products, by manufacturers, by producers and by farmers with respect to the goods, articles and products of their own manufacture, production or growth, or on any privilege, act or transaction relating to the business of processing by-products of manufacture, or on the transportation, loading, unloading or dumping or storage of such goods, articles, products or by-products;
53 P.S. § 6902(4) (emphasis added).
Because the legislature has not statutorily defined "manufacturing," that term has been judicially defined. In Norris Brothers v. Commonwealth, 27 Pa. 494, 496 (1856), the Supreme Court first announced that:
[Manufacturing] does not often mean the production of a new article out of materials 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.
Recently, in Bindex Corporation v. City of Pittsburgh, 504 Pa. 584, 587-88, 475 A.2d 1320, 1322 (1984), the court stated:
[T]he concept underlying the definition is the transformation of material or things into something different from that received. The difference cannot be a superficial change that does not alter or change the thing. . . . What is required is that the basic materials or goods be given a new identity by the current producer, one which ...