business privilege in Pennsylvania

2013The majority reverses the Tax Appeal Board and the trial court because each used the Gilberti v. City of Pittsburgh, 511 Pa. 100 , 511 A.2d 1321 (1986), “base of operations” analysis to impose a business privilege tax on extraterritorial sales if attributable to an office in the taxing jurisdiction.

2013The majority reverses the Tax Appeal Board and the trial court because each used the Gilberti v. City of Pittsburgh, 511 Pa. 100 , 511 A.2d 1321 (1986), “base of operations” analysis to impose a business privilege tax on extraterritorial sales if attributable to an office in the taxing jurisdiction.

2003Martin Co. v. Sharpsburg Borough, 376 Pa. 242 , 102 A.2d 125, 126-27 (1954) (recognizing the important distinction between intrastate and interstate commerce when imposing a business privilege tax on gross receipts, and concluding that a Borough could impose a business privilege tax without apportionment because the ordinance taxed only those receipts derived from intrastate business, and therefore, there was no threat of the borough taxing outside its border); accord Wagman, Inc. v. Manchester Township, 112 Pa.Cmwlth. 357 , 535 A.2d 702, 706 (1988) (apportionment of business privilege tax not

2003Martin Co. v. Sharpsburg Borough, 376 Pa. 242 , 102 A.2d 125, 126-27 (1954) (recognizing the important distinction between intrastate and interstate commerce when imposing a business privilege tax on gross receipts, and concluding that a Borough could impose a business privilege tax without apportionment because the ordinance taxed only those receipts derived from intrastate business, and therefore, there was no threat of the borough taxing outside its border); accord Wagman, Inc. v. Manchester Township, 112 Pa.Cmwlth. 357 , 535 A.2d 702, 706 (1988) (apportionment of business privilege tax not

2017See also Fish v. Township of Lower Merion, 633 Pa. 705 , 128 A.3d 764, 770-71 (2015) (holding that a township’s imposition of a business privilege tax on businesses whose sole income consisted of rent payments on leased real property was not barred by Section 301.1(f)(1) of the Local Tax Enabling Act (LTEA), Act of December 31, 1965, P.L. 1257, as amended, 53 P.S. § 6924.301.1(f)(1), limiting its authority to "levy, assess, or collect ... any tax on ... leases or lease transactions[,];” School District of Scranton v. Dale & Dale Design & Development, Inc., 559 Pa. 398 , 741 A.2d 186, 189 (1999

2017After Provident subsequently acquired the properties by deed in lieu of foreclosure, the City assessed a realty transfer tax pursuant to Section 19-4103(1) of the Philadelphia (continued…) lease transactions[.];” School District of Scranton v. Dale & Dale Design & Development, Inc., 741 A.2d 186, 189 (Pa. 1999) (holding that a school district’s imposition of a business privilege tax on a contractor’s receipts from residential construction was not barred by Section 301.1(f)(11) of the LTEA, 53 P.S. §6924.301.1(f)(11), limiting its authority to “levy, assess, or collect a tax on the construction

2015See, e.g., Cheltenham Twp. v. Cheltenham Cinema, Inc., 548 Pa. 385, 697 A.2d 258 (1997) (upholding a business privilege tax as applied to the gross receipts of a movie theater, notwithstanding that the taxing authority was barred from taxing the sale of movie tickets, where the theater earned its gross receipts from ticket and concession sales).

2015See, e.g., Cheltenham Twp. v. Cheltenham Cinema, Inc., 548 Pa. 385, 697 A.2d 258 (1997) (upholding a business privilege tax as applied to the gross receipts of a movie theater, notwithstanding that the taxing authority was barred from taxing the sale of movie tickets, where the theater earned its gross receipts from ticket and concession sales).

1999This very issue of a tax on individual business transactions of foreign-based corporations falling outside the scope of a municipality’s business privilege tax was addressed by this court in Airpark International v. Interboro School District, 677 A.2d 388 (Pa.Cmwlth.1996), affirmed — Pa.-, 735 A.2d 646 (1999). 5 *1070 In Airpark Int’l, the trial court declared the taxing of fees paid for the transactions in parking lots to be a “business privilege tax” as opposed to a transaction tax.

1999A business privilege tax is a tax imposed on all of the gross receipts from all of the businesses’ activities anywhere, so long as the base of operations within the political subdivision contributes to those activities because the privilege of doing business is “far more than the sum of transactions ... performed within the territorial limits of the taxing entity.” [Gilberti v. City of Pittsburgh, 511 Pa. 100, 109 , 511 A.2d 1321, 1326 (1986) ] A transaction tax, however, is imposed on the receipts from the designated transactions that are actually performed within the taxing entity, because i

2003Martin Co. v. Sharpsburg Borough, 376 Pa. 242 , 102 A.2d 125, 126-27 (1954) (recognizing the important distinction between intrastate and interstate commerce when imposing a business privilege tax on gross receipts, and concluding that a Borough could impose a business privilege tax without apportionment because the ordinance taxed only those receipts derived from intrastate business, and therefore, there was no threat of the borough taxing outside its border); accord Wagman, Inc. v. Manchester Township, 112 Pa.Cmwlth. 357 , 535 A.2d 702, 706 (1988) (apportionment of business privilege tax not

2003Martin Co. v. Sharpsburg Borough, 376 Pa. 242 , 102 A.2d 125, 126-27 (1954) (recognizing the important distinction between intrastate and interstate commerce when imposing a business privilege tax on gross receipts, and concluding that a Borough could impose a business privilege tax without apportionment because the ordinance taxed only those receipts derived from intrastate business, and therefore, there was no threat of the borough taxing outside its border); accord Wagman, Inc. v. Manchester Township, 112 Pa.Cmwlth. 357 , 535 A.2d 702, 706 (1988) (apportionment of business privilege tax not

2015See Shelly Funeral Home, Inc. v. Warrington Twp., 618 Pa. 469 , 57 A.3d 1136, 1141 (2012) (providing that the substance of a tax should dictate the validity of the tax).

2015See Shelly Funeral Home, Inc. v. Warrington Twp., 57 A.3d 1136, 1141 (Pa. 2012) (providing that the substance of a tax should dictate the validity of the tax).

2015Busse Co. v. City of Pittsburgh, 443 Pa. 349 , 279 A.2d 14 (1971) (holding that a business privilege tax levied on gross income, including income derived from the use of tangible property, did not duplicate a state tax on use of the same property, since the two taxes were levied upon different subjects); Blauner’s, Inc., 330 Pa. at 346 , 198 A. at 892 (indicating that a city sales tax did not duplicate a state mercantile license tax since the city taxed sales whereas the state taxed the privilege of conducting business, notwithstanding that both taxes were measured by gross sales).

2015Busse Co. v. City of Pittsburgh, 443 Pa. 349 , 279 A.2d 14 (1971) (holding that a business privilege tax levied on gross income, including income derived from the use of tangible property, did not duplicate a state tax on use of the same property, since the two taxes were levied upon different subjects); Blauner’s, Inc., 330 Pa. at 346 , 198 A. at 892 (indicating that a city sales tax did not duplicate a state mercantile license tax since the city taxed sales whereas the state taxed the privilege of conducting business, notwithstanding that both taxes were measured by gross sales).

2021The Comach Court determined that “the subject matter of the business privilege tax is the privilege of conducting a business in the 8 City of Allentown[,]” while “[t]he subject matter of the [Transfer Tax] is the recording of a deed.” Id.

1999The court further held that the issue of whether the business privilege tax was duplicative of the realty transfer tax was decided against the taxpayer in Comach Construction, Inc., v. City of Allentown, 159 Pa.Cmwlth. 605 , 633 A.2d 1336 (1993), alloc. denied, 539 Pa. 682 , 652 A.2d 1327 (1994).

2017See also Fish v. Township of Lower Merion, 633 Pa. 705 , 128 A.3d 764, 770-71 (2015) (holding that a township’s imposition of a business privilege tax on businesses whose sole income consisted of rent payments on leased real property was not barred by Section 301.1(f)(1) of the Local Tax Enabling Act (LTEA), Act of December 31, 1965, P.L. 1257, as amended, 53 P.S. § 6924.301.1(f)(1), limiting its authority to "levy, assess, or collect ... any tax on ... leases or lease transactions[,];” School District of Scranton v. Dale & Dale Design & Development, Inc., 559 Pa. 398 , 741 A.2d 186, 189 (1999

2017The Court concluded “that the city sales tax ordinance and the Mercantile License Tax Act do not tax the same subject, nor the same person, and that the field covered by the ordinance had not been preempted by the mercantile license tax.” Id.21 Correspondingly, in this case, the PBT and the Sales Tax do not 21 See also Fish v. Township of Lower Merion, 128 A.3d 764, 770-71 (Pa. 2015) (holding that a township’s imposition of a business privilege tax on businesses whose sole income consisted of rent payments on leased real property was not barred by Section 301.1(f)(1) of the Local Tax Enabling

1993This Court cited Smith, Kline, as authority in Wightman Health Center v. Office of Treasurer, 59 Pa. Commonwealth Ct. 634 , 430 A.2d 717 (1981), when a nursing home argued that, because a license fee is paid to the Commonwealth, a municipality is precluded from levying a business privilege tax.

1993This Court cited Smith, Kline, as authority in Wightman Health Center v. Office of Treasurer, 59 Pa. Commonwealth Ct. 634 , 430 A.2d 717 (1981), when a nursing home argued that, because a license fee is paid to the Commonwealth, a municipality is precluded from levying a business privilege tax.

2013In City of Pittsburgh v. Tucker, 74 Pa. Cmwlth. 290, 459 A.2d 1333 (1983), this court addressed whether a commercial illustrator’s gross receipts were exempt from a local tax, which precluded the local tax authority from levying a business privilege tax on "manufacturing or acts or transactions related to the business [of manufacturing].” Id. at 1335 (internal quotations omitted).

2013In City of Pittsburgh v. Tucker, 74 Pa. Cmwlth. 290, 459 A.2d 1333 (1983), this court addressed whether a commercial illustrator’s gross receipts were exempt from a local tax, which precluded the local tax authority from levying a business privilege tax on "manufacturing or acts or transactions related to the business [of manufacturing].” Id. at 1335 (internal quotations omitted).

2026See Duquesne Club v. Pittsburgh, 87 A.2d 81 (Pa. Super. 1952) (holding that because the club supplied food service to its members not for profit but for convenience of its members, it was not conducting business subject to a mercantile tax); Philadelphia School District v. Frankford Grocery Co., 103 A.2d 738 (Pa. 1954) (holding that “business” as contemplated by the Philadelphia School District Tax Act means business for gain or profit, with a profit motive and disagreeing with the school district’s view that “business” should include any commercial activity and not limited to a business carri

2026As our Supreme Court has explained, the LTEA allowed such local taxation “as a quid pro quo for businesses advantaging themselves of local governmental benefits, including the availability of police, fire, and other services.” S & H Transport v. City of York, 210 A.3d 1028, 1031 (Pa. 2019) (quoting V.L.

2021See, e.g., Board of Christian Education of Presbyterian Church in United States v. School District of Philadelphia, 91 A.2d 372 (Pa. Super. 1952) (holding that a church’s rental activities conducted for a gain or profit were subject to a business privilege tax). 10 conceive how the contributions returned to them should be regarded as a gain or profit to the entity acting as their mutual agent.

2021See, e.g., Board of Christian Education of Presbyterian Church in United States v. School District of Philadelphia, 91 A.2d 372 (Pa. Super. 1952) (holding that a church’s rental activities conducted for a gain or profit were subject to a business privilege tax). 10 conceive how the contributions returned to them should be regarded as a gain or profit to the entity acting as their mutual agent.