Appeal from the Order of the Department of Revenue in the case of O'Boyle's Ice Cream Island, Inc., No. 53280.
John P. Koopman, Begley, Carlin & Mandio, for petitioner.
Robert P. Coyne, Deputy Attorney General, with him, LeRoy S. Zimmerman, Attorney General, for respondent.
Judges Craig and Palladino, and Senior Judge Narick, sitting as a panel of three. Opinion by Judge Palladino.
[ 123 Pa. Commw. Page 233]
O'Boyle's Ice Cream Island, Inc. (Petitioner) appeals from an order of the Board of Finance and Revenue (Board), which sustained the imposition of sales tax on sales of Petitioner's ice cream products and denied Petitioner's request for a refund.*fn1 We reverse.
The parties have stipulated to the following facts: Petitioner is a Pennsylvania corporation engaged in the business of selling ice cream and related products from street vending trucks. During the period in question, Petitioner sold to the general public, through street vending trucks, the following prepackaged products: twin ice pops, chico ice pops, screwball fruit ice cups, fudge pops, dixie cups, chocolate pops, eclair bars, ice cream sandwiches, drumsticks, sundae cups, bomb pops and creamsickles. Petitioner also sold hand dipped cones. The items were sold in individual servings and were dispensed from Petitioner's trucks in a readily consumable state. Sales took place from Petitioner's trucks which were specially designed for curb service to dispense Petitioner's products. Petitioner provided no tables or chairs for customers to use while consuming these products, although it did provide napkins and plasticware. These trucks operated primarily in the summer months and stopped at various locations including parks, playgrounds, and houses.
Petitioner claims its products are exempt from the payment of sales tax under section 204(29) of the Tax Reform Code of 1971 (Code), Act of March 4, 1971, P.L. 6, as amended, 72 P.S. § 7204(29). Section 204(29) of the Code, 72 P.S. § 7204(29), provides that tax shall not be imposed on:
[ 123 Pa. Commw. Page 234]
The sale at retail or use of food and beverages for human consumption, including candy, gum and similar confections, except that this exclusion shall not apply with respect to --
(iii) Food and beverages . . . when purchased from i) persons engaged in the business of catering or ii) from persons engaged in the business of operating restaurants, cafes, lunch counters, private and social clubs, taverns, dining cars, hotels and other eating places. . . .
The Commonwealth bases its assessment of the tax on its conclusion that the products Petitioner sells are food and not "candy, gum or similar confections." The Commonwealth further contends that the tax is properly imposed because Petitioner is "engaged in the business ...