Appeal from the Order of the Pennsylvania Board of Finance and Revenue in the case of Reiniger Brothers, Inc. v. Commonwealth of Pennsylvania, No. C-11,042, dated May 24, 1983.
Marc D. Jonas, with him, Fred J. Silverman, Silverman, Jonas & Lawrence, for petitioner.
Michael A. Roman, Deputy Attorney General, for respondent.
Judges MacPhail and Colins, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge MacPhail.
[ 104 Pa. Commw. Page 592]
Reiniger Brothers, Inc. (Reiniger) has appealed an order of the Board of Finance and Revenue (Board) denying its petition for refund of capital stock tax. We reverse.
The parties submitted a stipulation of facts which we adopt as our own for purposes of this decision. See Pa. R.A.P. 1571(f). Reiniger is engaged in the business of raising flowers and plants in greenhouses. Hybrid tea and sweetheart roses for cut flowers are grown directly in the soil in the greenhouse. Other products are grown in soil in containers of various sizes.
Section 602.2 of the Tax Reform Code of 1971 (Code), Act of March 4, 1971, P.L. 6, as amended, added by Section 1 of the Act of October 17, 1980, P.L. 1077, 72 P.S. § 7602.2 provides in pertinent part:
(a) The provisions of section 602 [72 P.S. § 7602] shall not apply to family farm corporations. Family farm corporations shall be exempt from the tax imposed by section 602.
(b)(1) Family farm corporation means a Pennsylvania corporation at least seventy-five per cent of the assets of which are devoted to the business of agriculture, which business, for the purposes of this definition, shall not be deemed
[ 104 Pa. Commw. Page 593]
to include (i) recreational activities such as, but not limited to, hunting, fishing, camping, skiing, show competition or racing; (ii) the raising, breeding or training of game animals or game birds, fish, cats, dogs or pets, or animals intended for use in sporting or recreational activities; (iii) fur farming; (iv) stockyard and slaughterhouse operations; or (v) manufacturing or processing operations of any kind: Provided, however, That at least seventy-five per cent of all of the stock of the corporation must be owned by members of the same family.
Our Supreme Court stated in Commonwealth v. Peters Orchard Co., 511 Pa. 465, 515 A.2d 550 (1986), that in order to qualify for the exemption provided for by Section 602.2 of the Code, 72 P.S. § 7602.2, the taxpayer must: "1) be a family farm which has been incorporated, 2) devote seventy-five per cent (75%) of its assets to the business of agriculture, and 3) have at least ...