Summary
In Coventry Hills, Inc. v. Philadelphia Tax Review Board, 437 Pa. 259, 263 A.2d 348 (1970), the Supreme Court, emphasizing that the corporate taxpayers there had built the apartment building in question, held the taxpayer liable for tax on the rents, even though the taxpayer provided only limited services — grass cutting, snow removal, hall cleaning and minor maintenance.
Summary of this case from Oseroff v. City of Pgh. et alOpinion
January 8, 1970.
March 20, 1970.
Taxation — Philadelphia — Mercantile license tax — "Carrying on business" — Corporation owning large apartment house.
In this case, in which it appeared that plaintiff corporation built and owned a fifty-six unit apartment house; that plaintiff had one employe, who lived on the premises, and performed janitorial work and minor maintenance; and that the corporation paid a rental agent to collect the rents and to show the apartments to potential tenants; it was Held that plaintiff was a corporation engaged in business, and, as such, was subject to the Philadelphia mercantile license tax.
Argued January 8, 1970. Before BELL, C. J., JONES, COHEN, EAGEN, O'BRIEN, ROBERTS and POMEROY, JJ.
Appeal, No. 350, Jan. T., 1969, from order of Court of Common Pleas, Trial Division, of Philadelphia, Feb. T., 1968, No. 1974, in case of Coventry Hills, Inc. v. Tax Review Board of City of Philadelphia. Order affirmed.
Appeal by taxpayer from decision of Tax Review Board of the City of Philadelphia. Before SLOANE, J.
Order entered dismissing appeal and affirming decision of board. Taxpayer appealed.
James L. Price, with him Steinberg, Greenstein, Richman Price, for appellant.
Levy Anderson, First Deputy City Solicitor, with him Nicholas M. D'Alessandro, Assistant City Solicitor, Matthew W. Bullock, Jr., Second Deputy City Solicitor, and Edward G. Bauer, Jr., City Solicitor, for City of Philadelphia, appellee.
This appeal involves the validity of an assessment under the Philadelphia Mercantile License Tax. In 1967 the City of Philadelphia imposed assessments against appellant for rental payments received during the years 1963 to 1967. Appellant appealed to the Tax Review Board and the Court of Common Pleas, both of which sustained the City's action. This appeal followed. We affirm.
Appellant corporation is subject to Philadelphia's Mercantile Tax if it was "carrying on . . . business." Philadelphia Code § 19-1001. The evidence shows that appellant built and owns a fifty-six unit apartment house in Philadelphia. The corporation has one employee, a superintendent or janitor, who lives on the premises, cuts the grass, shovels the snow, cleans the halls and does minor maintenance. There is no doorman or telephone switchboard. The corporation pays a rental agent to collect the rents and show the apartments to potential tenants.
Appellant corporation urges that it is exempt from the mercantile tax under our decision in Price v. Tax Review Board, 409 Pa. 479, 187 A.2d 280 (1963). As later cases have made clear, however, Price is to be strictly limited to its facts. For example, one year after Price we decided Tax Review Board v. Brine Corp., 414 Pa. 488, 200 A.2d 883 (1964), in which we held the mercantile tax applicable to a corporation which owned eleven properties, but did not provide any services to the tenants and did not manage any of the properties. Then in Kungsgaten, Inc. v. Philadelphia, 422 Pa. 209, 220 A.2d 803 (1966), we upheld the mercantile tax as applied to a corporation which owned only one apartment house, and merely leased the building to another corporation. Cf. Sun Oil Co. v. Tax Review Board, 417 Pa. 443, 207 A.2d 855 (1965) (upholding mercantile tax applied to dividend income from common stock).
The taxpayers in Price were "fortuitous owners merely conserving their property." Tax Review Board v. Weiner, 211 Pa. Super. 229, 237, 235 A.2d 184, 188 (1967). But the taxpayer here, like those in Brine and Kungsgaten, is not such an owner. Appellant corporation was organized to build the apartment house involved here, the present stockholders having purchased their stock after construction was completed. This corporation, therefore, can hardly claim to be a "fortuitous owner" conserving its property. Rather, it is a corporation engaged in business, and, as such, is subject to the mercantile tax.
The order of the Court of Common Pleas of Philadelphia County is affirmed.