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NAN S. SMOLOW v. COMMONWEALTH PENNSYLVANIA (09/08/88)

decided: September 8, 1988.

NAN S. SMOLOW, INDIVIDUALLY AND ON BEHALF OF ALL OTHER PERSONS SIMILARLY SITUATED, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF REVENUE AND BARTON FIELDS, SECRETARY OF THE DEPARTMENT OF REVENUE, RESPONDENTS



Original Jurisdiction in the case of Nan S. Smolow, Individually and on behalf of all other persons similarly situated v. Commonwealth of Pennsylvania, Department of Revenue and Barton Fields, Secretary of The Department of Revenue.

COUNSEL

Ronald Jay Smolow, with him, Michael H. Landis, for petitioner.

Bryan E. Barbin, Deputy Attorney General, for respondents.

Judges Craig and Doyle, and Senior Judge Narick, sitting as a panel of three. Opinion by Judge Doyle.

Author: Doyle

[ 119 Pa. Commw. Page 325]

Before us are the preliminary objections of respondents, the Department of Revenue (Department) and Barton Fields, Secretary of the Department,*fn1 to a class action petition for review filed by Nan S. Smolow (Petitioner) in our original jurisdiction.

[ 119 Pa. Commw. Page 326]

On September 10, 1987, Petitioner purchased a 1987 Mercury station wagon from Reedman Mercury (Reedman). The list price of the vehicle was $17,256. Reedman, however, accepted as a trade-in another vehicle owned by Petitioner worth $7,745, thereby reducing the sale price of the vehicle to $9,511.00. At that time, Mercury was offering "manufacturer's rebates" of $1,000 as an inducement to purchase a Mercury automobile. A Mercury purchaser could either accept the rebate in cash at some time subsequent to the date of sale, or, could assign his right to the rebate to the automobile retailer prior to or at the time of sale. The retailer would then use the "rebate" to reduce the price of the car.

At this time, the Department had a policy which calculated the sales tax upon a vehicle sale without subtracting the "manufacturer's rebate" from the price of the vehicle, notwithstanding the form in which the purchaser took the "rebate." Thus, Reedman calculated the sales tax of six percent upon Petitioner's purchase on a sale price of $9,511, for a total tax of $570.66. Had the "manufacturer's rebate" been used to reduce the cost of the vehicle to $8,511, the actual amount of sales tax paid would have been $510.66.*fn2

On March 8, 1988, Petitioner filed her class action petition for review in equity on behalf of herself and all others similarly situated. Her petition challenges the constitutionality of the Department's alleged policy of not reducing the price of a vehicle for sales tax purposes by the amount of a "manufacturer's rebate" used at the time of sale by the purchaser to reduce the price of vehicle.

[ 119 Pa. Commw. Page 327]

This policy assertedly violates both the equal protection clause of the fourteenth amendment of the United States Constitution and the uniformity clause of the Pennsylvania Constitution, article VIII, section 1. In her six-count petition she seeks both on behalf of herself, and the class she seeks to represent, refunds (counts I and IV), injunctive relief and/or a writ of mandamus restraining the Department from continuing its policy (counts III and VI), and treble damages under the Unfair Trade Practices and Consumer Protection Law (Law)*fn3 (counts II and V). The Department filed preliminary objections asserting ...


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