Summary
In Pittsburgh v. Public Parking Authority, 11 Pa. Commw. 442, 314 A.2d 887 (1974), our Court was presented with the issue of whether or not the Public Parking Authority, and its lessee-operators were exempted by statute from the payment of the parking transaction tax.
Summary of this case from Public Parking Authority v. City of PittsburghOpinion
Argued November 7, 1973
January 14, 1974.
Taxation — Parking lots — Authority — Parking Authority Law, Act 1947, June 5, P. L. 458 — The General County Assessment Law, Act 1933, May 22, P. L. 853 — Excise tax — Exemption — Public property — Private lessees — Property tax — Effect of affirmance by Supreme Court of Pennsylvania — Dicta.
1. Lessees and operators of parking lots owned by an Authority created under the Parking Authority Law, Act 1947, June 5, P. L. 458, are exempt from a municipal excise tax imposed upon such operation; such exemption arising under both The General County Assessment Law, Act 1933, May 22, P. L. 853, and the Parking Authority Law, Act 1947, June 5, P. L. 458. [445]
2. The exemption from taxation of an Authority-owned parking facility, granted by provisions of the Parking Authority Law, Act 1947, June 5, P. L. 458, applies even though the Authority leases such facility to a private operator. [445]
3. The exemption from taxation of public property used for public purposes granted by provisions of The General County Assessment Law, Act 1933, May 22, P. L. 853, is applicable to excise taxes upon transactions involving parking for which such property is used as well as to property taxes imposed directly upon the property. [445-7]
4. A simple affirmance by the Supreme Court of Pennsylvania of a lower court order does not necessarily indicate an approval of every statement of law or dicta propounded by the lower court in support of such order. [447-8]
Argued November 7, 1973, before President Judge BOWMAN and Judges CRUMLISH, JR., KRAMER, WILKINSON, JR., MENCER, ROGERS and BLATT.
Appeal, No. 97 C.D. 1973, from the Order of the Court of Common Pleas of Allegheny County in case of Public Parking Authority of Pittsburgh, a municipal corporation, Associated Dry Goods Corporation, a Virginia corporation, successors to Joseph Horne Co., a Pennsylvania corporation, Gimbel Brothers, Inc., a New York corporation, The May Department Stores Company, a New York corporation, and Parking Service Corporation, a Pennsylvania Corporation, v. City of Pittsburgh, a municipal corporation, No. 687 July Term, 1972.
Complaint in equity in the Court of Common Pleas of Allegheny County to enjoin collection of taxes and to secure tax refund. Plaintiffs filed motion for summary judgment. Motion granted. Injunction issued. Refund ordered. SILVESTRI, J. Defendant appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
Ralph Lynch, Jr., City Solicitor, with him Grace S. Harris, Special Assistant City Solicitor, for appellant.
Leonard Boreman, with him Robert G. Sable and Baskin, Boreman, Wilner, Sachs, Gondelman Craig, for appellees.
Paul H. Titus, with him Bernard D. Marcus and Kaufman Harris, for amicus curiae Mellon Square Garage, Inc.
This is yet another case arising from the City of Pittsburgh's purpose to tax commercial parking transactions and is concerned with Ordinance No. 704 of 1969 of the City of Pittsburgh which, as it affected owners of commercial lots, was struck down by the Supreme Court in Alco Parking Corporation v. Pittsburgh, 453 Pa. 245, 307 A.2d 851 (1973). The principal plaintiffs in this suit are five business corporations which lease, as lessees, and operate parking lots owned by the Public Parking Authority of Pittsburgh, an Authority created under the Parking Authority Law, Act of June 5, 1947, P. L. 458, 53 P. S. § 341 et seq. They seek, as did the successful parking lot operators in Alco Parking v. Pittsburgh, supra, an order restraining collection of the tax from them and a refund of taxes collected. The court below granted the plaintiff's motion for summary judgment, restrained the enforcement of the ordinance against the business corporation plaintiffs and directed the city to refund taxes paid by them for the years 1970 and 1971.
The corporations joined the Public Parking Authority of Pittsburgh as a plaintiff without its consent and over its objection. The court below discharged the city's rule to show cause why the Authority should not be stricken. We have concluded that the lower court correctly decided that provisions in the leases between the Authority and the other plaintiffs authorized their joinder of the Authority as a fellow plaintiff. The court's decree recognized the Authority's objection and afforded no relief against the tax to the Authority.
The plaintiffs seek refunds of taxes paid during 1970 and 1971 in an amount in excess of $1,250,000.
The issue raised by the plaintiffs and decided in their favor below is whether they are exempted by statute from the payment of this tax. Ordinance 704 was adopted by authority of The Local Tax Enabling Act. It imposes a tax on all transactions of each operator with respect to each nonresidential parking place, at the rate of 20 per cent of the gross receipts from all transactions. The definition of operator is expressly inclusive of "operators on premises of Public Parking Authority of the City of Pittsburgh."
Act of December 31, 1965, P. L. 1257, 53 P. S. § 6901. Ordinance 704 was preceded by Ordinance 434 of 1962, the legality of which was, in the main, unsuccessfully challenged in McGillick v. City of Pittsburgh, 415 Pa. 581, 203 A.2d 480 (1964) and Ordinance 674 of 1968, the subject of University Club v. Pittsburgh, 440 Pa. 562, 271 A.2d 221 (1970).
The appellees contend that they are twice statutorily exempt from this tax; first, by Section 204(g) of The General County Assessment Law, Act of May 22, 1933, P. L. 853, 72 P. S. § 5020-204 (g) which exempts from "All . . . city . . . tax . . . [a]ll other public property used for public purposes" and second, by Section 15 of the Parking Authority Law, Act of June 5, 1947, P. L. 458, 53 P. S. § 355, under which the Public Parking Authority of Pittsburgh was created, declaring that "such Authorities shall not be required to pay any taxes or assessments upon any property acquired or used by them for such purposes."
Public parking facilities operated by Authorities created under the Parking Authority Law of 1947 are public properties devoted to public use and entitled to exemption from real estate taxation. McSorley v. Fitzgerald, 359 Pa. 264, 59 A.2d 142 (1948). The exemption from such taxes exists although the Authority chooses to lease its parking facilities to private parties deriving profit therefrom. Pittsburgh Public Parking Authority v. Board of Property Assessment, 377 Pa. 274, 105 A.2d 165 (1954); Price v. Philadelphia Parking Authority, 422 Pa. 317, 221 A.2d 138 (1966).
The city contends that the cases just cited are not controlling authority here because the instant levy is not a property tax but an excise tax upon the parking transaction. The distinction made, although difficult of clear perception, is one which the courts have found useful, usually in sustaining taxability. Hence, in Philadelphia v. Samuels, 338 Pa. 321, 12 A.2d 79 (1940) a tax on parking transactions was upheld because it could be called an excise tax and thus not preempted by the state income tax, which had earlier been called a property tax. This distinction was, however, expressly held to be of no consequence in the determination of whether the parking transactions of a concessionaire of a county-owned airport were exempted from taxation by Section 204(g) of The General County Assessment Law in County of Allegheny v. Township of Moon, 436 Pa. 54, 258 A.2d 630 (1969). Answering the argument that The General County Assessment Law's exemption from "all tax" of "public property used for public purposes" extended relief only from property taxes, Justice ROBERTS wrote:
". . . Unfortunately for the township, the tax exempt status of this parking lot does not depend on the label attached to the tax.
"Article IX, § 1, of the Constitution of 1874, now Article VIII, § 2, provides: 'The General Assembly may by law exempt from taxation: . . . (iii) That portion of public property which is actually and regularly used for public purposes . . . .' The Act of 1933, supra, provides: 'The following property shall be exempt from all . . . township . . . tax, to wit: . . . (g) All other public property used for public purposes . . . .' Neither the constitution, nor the statute, say the exemption will be only for property taxes; the statute, in fact, expressly says 'all tax.' The word 'property' is used merely to describe the locus of what the Legislature was exempting, not the type of tax it was exempting it from. There is no reason to assume that the Legislature did not fully exercise its constitutional power to exempt this property, not only from property taxes, but also from taxes on activities conducted on the property. We must therefore hold that the tax imposed here by the township on 'public property used for public purposes' is invalid." This case is controlled by that holding. Not only do we disagree with the city's argument that the presence in the Parking Authority Law of a specific exemption for "taxes or assessments upon any property acquired or used" by Authorities created under that Act renders The General County Assessment Law inapplicable, we are unable to find any real difference in meaning between the exempting provisions of the two enactments. In summary, the cases hold that public parking places created by public parking authorities, whether self-operated or leased for operation by others, are exempt from all taxes, whether levied upon them as real estate and called property taxes, or imposed upon the transactions by which they are used and called excise taxes.
Act of June 5, 1947, P. L. 458, § 15, 53 P. S. § 355.
The city relies principally upon McGillick v. Pittsburgh, 415 Pa. 581, 203 A.2d 480 (1964), affirming per curiam an order of the Court of Common Pleas of Allegheny County, upholding the validity of Ordinance 434 of 1962, except insofar as that ordinance excluded from the definition of the word operator the Public Parking Authority of Pittsburgh. The plaintiffs in that case, owners or operators of commercial lots, contended that the ordinance violated the standard of uniformity compelled by Article 9, Section 1 of the Pennsylvania Constitution by excluding operators of hotel, tourist court, and trailer park parking lots, and the city and its Parking Authority. After expressing its opinion that the uniformity clause was offended by the "flat exemption" of the Authority, the county court observed: "It should be noted that the Parking Authority Law provides that 'any property' acquired or used by the Authority for its purposes is exempt from any taxes. We are of the opinion that this does not exempt taxes upon parking transactions which under this ordinance are in the nature of excise taxes as contrasted to property taxes." The city contends that the affirmance per curiam of the order which accompanied this opinion constituted a holding by the Supreme Court that Section 15 of the Public Parking Authority Law provides no exemption from a tax on parking transactions. There are several reasons for disagreeing: first, the sentences relied on were dicta in the lower court's opinion; second, the affirmance by the Supreme Court of the Allegheny County Court's order cannot be taken as approval by the former of every statement of law propounded by the latter in support of the order; and, finally, McGillick preceded by five years Allegheny v. Moon, which latter case is on point and in direct contradiction of the principle for which the former is cited.
Now Article 8, Section 1.
Order affirmed.