Appeal from the Order of the Court of Common Pleas of York County, in case of G.A. & F.C. Wagman, Inc. v. Manchester Township, No. 82-S-2276.
Neal S. West, with him, John S. Oyler, McNees, Wallace & Nurick, for appellant.
David C. Keiter, Seidensticker, Keiter, Tarlow & Baughman, P.C., for appellee.
Judges Craig and Palladino, and Senior Judge Narick, sitting as a panel of three. Opinion by Judge Craig.
[ 112 Pa. Commw. Page 359]
G.A. and F.C. Wagman, Inc. (Wagman) appeals an order of the Court of Common Pleas of York County which upheld Manchester Township's right to tax Wagman's gross receipts from intrastate business conducted outside the township, under the township's Business Privilege Tax Ordinance, No. 78-15 (ordinance). This is the second time this case has come before this court; in an earlier opinion*fn1 we held that the ordinance was an invalid extension of the township's power to tax transactions, occupations, and privileges under section 2 of the Local Tax Enabling Act*fn2 to the extent that it taxed gross receipts generated by services performed outside the township. Following applications for leave to appeal by both parties, the Supreme Court remanded the case to this court for reconsideration in light of its recent decision in Gilberti v. City of Pittsburgh, 511 Pa. 100, 511 A.2d 1321 (1986).
The issue before us remains whether the township may impose its business privilege tax upon receipts generated by Wagman's construction activities within the Commonwealth of Pennsylvania, but outside of Manchester Township.
Wagman is a Pennsylvania corporation engaged in highway construction throughout the mid-Atlantic states. The company's sole permanent office and corporate
[ 112 Pa. Commw. Page 360]
headquarters is located in Manchester Township. Since 1979, the majority of Wagman's business has been performed outside of township limits.
On January 1, 1979, the township imposed a business privilege tax of one mill on each dollar of volume of gross annual receipts. Wagman paid taxes based on gross receipts of its interstate and intrastate business in 1979 and 1980, and on its intrastate revenue in 1981. In 1982, Wagman sought a refund for taxes paid in 1979 and 1980. When the township denied the refund claim, Wagman brought an action for declaratory judgment that it was not required to pay the tax on receipts generated by services performed outside Pennsylvania, or within Pennsylvania but not within the township.
The trial court held that Wagman was entitled to a refund for that portion of taxes paid in 1979 and 1980 attributable to interstate gross receipts, but that it was liable for the privilege tax on its intrastate receipts. The township did not appeal the trial court's order. Wagman did appeal to this court that portion of the order which upheld the privilege tax on intrastate receipts.
In our earlier opinion, this court ruled that the township could not tax gross receipts generated by services performed outside of the township. However, soon after our decision, the Supreme Court overruled our holding in Gilberti, and held that a business privilege tax could be imposed upon a taxpayer's gross receipts, including that portion attributable to services performed outside of the taxing district. Reconsidering this case in light of Gilberti, we now reverse our earlier decision.
A local government's authority to enact a business privilege tax is governed by section 2 of the Local Tax Enabling Act, 53 P.S. § ...