Airpark International I v. Interboro School District

KELLEY, Judge,

dissenting.

I respectfully dissent. While recognizing that a tax statute should be strictly construed against the government, the majority herein concludes that the order of the trial court should be reversed because the school district’s parking lot tax is a transaction tax permitted by the LTEA. I disagree.

As correctly stated by the majority, the difference between a business privilege tax and a transaction tax is the stated subject of the tax and how the tax is measured. A 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 authority.” 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 its subject is only the transaction and not the privilege of engaging in a business that allows the transaction to be consummated.

In this ease, the language of the School District Resolution imposing the Parking Lot Tax is indicative of a business privilege tax on the gross receipts of the parking lots. The resolution provides for a tax of 6% imposed upon the “fees paid for all transactions in and for the parking of automobiles or motor vehicles on commercial parking lots_ Such tax shall be due ... by any person conducting and/or operating such parking lot.” (Emphasis added.) For the purposes of the School District’s Resolution, “all transactions” is synonymous with “gross receipts”; i.e., a tax on the fees of all transactions in the parking lots is a tax on gross receipts.

Moreover, the School District Resolution imposes the tax upon “all transactions in and for the parking of automobiles.... ” If a tax is imposed on the fee for every transaction, there is no transaction free from tax. If no transaction is free from tax, then the only possible interpretation of the Resolution is that it is a tax on gross receipts.

This interpretation is further supported by the fact that the Parking Operators not only provide their patrons with parking spaces in their commercial parking lots, but also provide them with valet service to and from the airport. Stipulation of Facts, p. 129a. The fee for the valet service is included in the overall fee charged. Therefore, the tax is not imposed merely upon the transaction of simply parking a car in the parking lot. The tax is also imposed upon that portion of the parking fee which may be allocated towards the airport valet service.1

*397In addition, the language of the School District Resolution closely tracks the language of the Tinicum Township Resolution which imposed “a tax of six percent (6%) of the gross receipts from all transactions in and for the parking of automobiles or motor vehicles on parking lots ... Such taxes shall be due to the Township of Tinicum by any person conducting and/or operating such parking lot.” Reproduced Record (R.) at 29a-30a. The similarity between the two resolutions is further evidence of the school district’s intention of imposing a tax on the gross receipts of the parking lots.2 Merely removing the words “gross receipts” does not change the nature of the tax imposed. Clearly, the school district intended to adopt a parking lot tax substantially similar to the Tinicum Township parking lot tax.

Further, the incidence of the tax is made to fall upon the operator of the parking lot, not the patron. Under the Resolution, the parking operator is required to show

the revenues derived from the operation of the parking lot for the preceding month, computing the tax due for the preceding month and at the same time shall pay over to the School District the entire amount of the tax due for that month. (R. at 25a.)

The Resolution contains no language which indicates that the parking operators merely collect the taxes from the parking lot patrons and pay them over to the school district as was the case in Airway Arms, Inc. v. Moon Area School District, 498 Pa. 286, 446 A.2d 284 (1982). In Airway Arms, the tax resolution expressly imposed the parking tax upon each and every patron for each and every parking transaction and the parking operator was to pay over such taxes due that were obtained from the patrons. It is clear from the language of the School District Resolution that the Parking Operators are the taxpayers, not their patrons, and that the tax is imposed not upon the transaction of a patron parking a car but upon the privilege of doing business in the district as measured by the gross receipts of the parking lots.

Both the language of the Resolution adopted by the school district and the school district’s actions in announcing its intention to adopt the resolution indicate that the tax was imposed upon the gross receipts of the parking lots. The fact that the school district’s tax may have been more “artfully written”, as opined by the majority, does not justify the imposition of the tax as a transaction tax pursuant to the LTEA Therefore, I would hold that the school district Parking Lot Tax is an impermissible business privilege tax upon the gross receipts of the parking lots.

Accordingly, I would affirm the order of the trial court which held the Parking Lot Tax invalid pursuant to section 533 of the Reform Act, 72 P.S. § 4750.533.

. This fact is also fully corroborated by the testimony in the supersedeas motion in which witnesses from all five Parking Operators testified that their fees include aiiport valet service. June 27, 1994 Hearing, Notes of Testimony at 14-15, 40-41, 54, 60, 69-70.

. Further evidence of the school district’s intentions is the public notices it published to announce its intention to adopt the Resolution. The notices announced that the school district intended to adopt a resolution to impose a 6% tax on the gross receipts of all commercial parking lots located within the boundaries of the School District. R. at 137a.