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BLOOMINGDALE'S BY MAIL v. COMMONWEALTH PENNSYLVANIA (12/18/89)

decided: December 18, 1989.

BLOOMINGDALE'S BY MAIL, LTD., PETITIONER,
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF REVENUE, AND BARTON A. FIELDS, IN HIS CAPACITY AS SECRETARY OF REVENUE, COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF REVENUE, RESPONDENTS



PETITION FOR REVIEW IN THE NATURE OF A COMPLAINT FOR EQUITABLE RELIEF AND DECLARATORY JUDGMENT.

COUNSEL

Maryann B. Gall, Jones, Day, Reavis & Pogue, Columbus, Ohio and Peter J. Boyer, Blank, Rome, Comisky & McCauley, Philadelphia, for petitioner.

Jeffrey S. Snavely, Meredythe J.Y. Schrom, Asst. Counsel, and Arthur McNulty, Harrisburg, for respondents.

Crumlish, Jr., President Judge, and Craig, Doyle, Barry, Colins, McGinley and Smith, JJ.

Author: Smith

[ 130 Pa. Commw. Page 193]

Petitioner Bloomingdale's By Mail, Ltd. (By Mail) filed the present action for declaratory judgment before this Court in its original jurisdiction pursuant to Section 761(a)(1) of the Judicial Code, 42 Pa.C.S. § 761(a)(1) and Section 7532 of the Declaratory Judgments Act, 42 Pa.C.S. § 7532. The principal question presented is whether the attempt by the Department of Revenue (Department) to require By Mail to collect and remit Pennsylvania use tax on its mail-order sales of taxable merchandise purchased by residents of the Commonwealth of Pennsylvania violates the due process or commerce clauses of the United States Constitution.

By letter dated March 25, 1985, from the Department, By Mail was provided with a sales, use and hotel occupancy tax license application and instructed to complete it. In that letter and again in a letter dated July 10, 1985, the Department instructed By Mail to commence collection and remittance of use tax on its sales of merchandise to Pennsylvania residents. By Mail refused and continues to refuse to collect the Pennsylvania use tax on its sales. On August 29, 1985, By Mail filed its petition for review in the nature of a complaint for equitable relief and declaratory judgment against the Department. The parties thereafter entered into a stipulation of facts and supplemental stipulation of facts, and on the basis of these stipulations, the Department filed its motion for summary judgment. By Mail filed its answer and cross-motion for summary judgment.

Summary relief can be granted only where no material fact is in dispute and where the applicant's right to relief is clear. Gartner v. Pennsylvania Board of Probation and Parole, 79 Pa. Commonwealth Ct. 141, 469 A.2d 697 (1983). The issuance of a declaratory judgment is a matter of judicial discretion which should only be exercised to illuminate an existing right, status or legal relation. It may not be used to search out new legal doctrine. Doe v. Johns-Manville Corp., 324 Pa. Superior Ct. 469, 471 A.2d 1252 (1984). The Declaratory Judgments Act is broad in

[ 130 Pa. Commw. Page 194]

    scope and is to be liberally construed and administered but is not without its limitation. Id.

I

The parties have stipulated, inter alia, to the following facts: By Mail is a corporation organized and existing under the laws of the state of New York. The officers and directors of By Mail are located in New York City, New York, Cincinnati, Ohio and Chesire, Connecticut, and corporate headquarters are located in New York City and Chesire. By Mail conducts a nationwide mail order business from leased facilities in Salem, Virginia and from its wholly-owned fulfillment center in Chesire, Connecticut. Written or telephone purchase orders from persons throughout the United States, including residents of Pennsylvania, are received at these facilities and merchandise is shipped therefrom by common carrier or U.S. mail to fill these orders. Customers may return items to By Mail for a full refund or an exchange if they are dissatisfied with the merchandise for any reason. By Mail is a wholly-owned subsidiary of Federated Department Stores, Inc. (Federated) which is a Delaware Corporation with its corporate headquarters in Cincinnati, Ohio. Prior to the incorporation of By Mail in 1983, the Bloomingdale's division (Bloomingdale's) of Federated made mail order sales to Pennsylvania residents.

Purchases made from By Mail may be paid for using Master Card, Visa, Diners Club and the Bloomingdale's credit card. By Mail has no retail stores anywhere and does not have any distribution house, sales house, warehouse, business location, office or employees in Pennsylvania. In addition, By Mail catalogs are not designed, prepared, printed, published, nor mailed from Pennsylvania and all merchandise is shipped to Pennsylvania customers from Virginia or Connecticut. By Mail's only direct solicitations of Pennsylvania residents are through its catalogs distributed throughout the United ...


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