I respectfully disagree with the majority's conclusion that Ikon's activities do not constitute manufacturing. Although initially one might be tempted to conclude that photocopying is not manufacturing in the popular understanding of the term, one must examine the individual taxpayer's activities in reaching a determination. See Mar-Pat (whether an activity constitutes manufacturing under the LTEA is a question of law, to be determined on a case- by-case basis.)
Here, it is undisputed that, in addition to traditional photocopying, Ikon, inter alia, has the capacity to make bound copies, apply tape binding, insert tabs and colored pages, make oversized copies, print labels, laminate and mount items. Indeed, the City Treasurer determined that Ikon could exclude as manufacturing that portion of its business attributable to bound documents. The trial court went further and concluded that "photocopying involves the transformation of blank paper and toner into a new product, through the use of mechanical equipment, skill and labor, and thus constitutes manufacturing. Although Ikon reproduces a copy of an original, they transform blank paper into a new, different and useful article." (Trial Court's Opinion at 5.) I agree with the trial court and respectfully disagree with the majority that there is no case law to support the proposition that photocopying can constitute manufacturing.
In Bindex, the Supreme Court held that the process of binding printed pages together into a book constituted a manufacturing activity that was exempt from the City's business privilege tax. The Court reasoned that the book binder used skill and labor to give a new identity to basic materials-printed pages. For all practical purposes, I cannot distinguish the book binder's activities in Bindex from Ikon's creation of bound documents in the present case.
As for unbound copies, I disagree with the majority's determination that Pittsburgh Press provides no basis for concluding that photocopying can constitute manufacturing. In that case, this Court considered the issue of whether the advertisements appearing in newspapers were manufactured such that the gross receipts therefrom would not be subject to tax. This Court rejected the City's argument that no new or different product was produced in the printing process. We determined that an advertising layout was transformed into a totally new item in composition as compared to the initial layout. We reasoned that "[t]he Press *Page 874 does not begin with an ad and end with an ad. It begins with a blueprint or design and ends with a manufactured product composed of ink and paper." Id., 322 A.2d at 392. Thus, we concluded that it is the printing process itself, i.e. the combining of raw materials, ink and paper, into something new, the newspaper, through the use of labor, skill and machinery which basically makes printing manufacturing.
In addition, as the trial court noted in the present case, there is a portion of Pittsburgh Press that it deemed to be highly applicable to Ikon.
Id. at 393. Notwithstanding the fact that the above-quoted portion is merely a hypothetical, it is helpful to an analysis of the taxpayer's activities in the present case.Suppose that the Press were solely a job printer. It would in that case print the customer's advertisement, for example, in the form of a hand bill and return it to him for distribution. Under the circumstances, the Press would clearly be a manufacturer and the gross receipts received would certainly be gross receipts from the sale of manufactured products.
In conclusion, I believe that the majority erred in concluding that Ikon did not give something a new shape or form, a new quality or a new combination of quality or usefulness such that its activities, especially the creation of bound documents, did not constitute manufacturing. Therefore, for the above reasons, I would have affirmed the trial court's order.