Eastern Investment Co. v. Commonwealth

Ofinion by

Judge Barry,

Eastern Investment Company (petitioner) petitions for our review of a decision of the Board of Finance and Revenue which denied petitioner’s request for a refund of the realty transfer tax paid under protest. We affirm.

*512Petitioner and the Department of Revenue (Department) have stipulated to the following facts. On December 16, 1985, the petitioner conveyed a parcel of property by deed to the Redevelopment Authority of Berks County; that deed, which was recorded, recited the actual consideration of $3,880,000.00. At the time of recording, the petitioner claimed that the transfer was exempt from the realty transfer tax. In July of 1986, the Department issued a determination that the transfer was subject to the tax and that tax of $38,800.00 plus interest of $2,415.30 was due. The Department’s Board of Appeals sustained the determination in January of 1987. On March 6, 1987, petitioner, under protest, paid the tax plus accrued interest of $4,736.17, or a total of $43,536.17. Petitioner filed a timely request for refund with the Board of Finance and Revenue which was denied on June 23, 1987. Petitioner then filed a timely appeal to this Court.

Petitioner makes but one argument. It argues that the Redevelopment Authority of Berks County is a “nonprofit industrial development agency”. At the time this deed was recorded, a tax of one percent of the value of the property was due upon recording of any document. Section 1102-C of the Tax Reform Code of 1971, Act of March 4, 1971, P.L. 6, as amended, added by Act of May 5, 1981, P.L. 36, as amended. When the deed was recorded, Section 1101-C defined “document” as “[a]ny deed ... but does not include ... any transfers to or from nonprofit industrial development agencies....” Petitioner argues that since a redevelopment authority performs many of the same functions as a nonprofit industrial development agency, no tax is due on this transfer under the language cited immediately above.1 We do not agree.

*513“Nonprofit industrial development agency” is not defined in the Tax Reform Code. Section 3(g) of the Pennsylvania Industrial Development Authority Act, Act of May 17, 1956, P.L. (1955) 1609, as amended, 73 P.S. §303(g) defines “industrial development agency” as:

a nonprofit corporation or a foundation or association organized and existing under the laws of this Commonwealth, regardless of the particular name, to whose members or shareholders no profit shall enure and which shall have as a purpose the promotion, encouragement, construction, development and expansion of new or existing industrial development projects in a critical economic area.

That same section defines “government” as “the State or Federal governments, or any political subdivision, agency or instrumentality, corporate or otherwise, or either of them.” 73 P.S. §303(f).

The Redevelopment Authority of Berks County was created pursuant to the Urban Redevelopment Law, Act of May 24, 1945, P.L. 991, as amended, 35 P.S. §§1701-1719.1. All redevelopment authorities created thereunder are agencies of the Commonwealth. Schwartz v. Urban Redevelopment Authority of Pittsburgh, 411 Pa. 530, 192 A.2d 371 (1963). That a redevelopment authority is an agency of the Commonwealth is crucial because the same definition of “document” quoted earlier in .this opinion as it pertains to “nonprofit industrial development agencies” also states that “document” “does not include ... transfers to the United States, the Common*514wealth of Pennsylvania, or any of their instrumentalities, agencies, or political subdivisions, by gift, dedication or deed in lieu of condemnation, or deed in confirmation in connection with condemnation proceedings....” Transfers to redevelopment authorities were covered by this portion of the definition of “document”. We therefore believe petitioner’s argument that this transaction is not subject to tax because the transferee is a “nonprofit industrial development agency” is incorrect.2

Affirmed.

Order

NOW, February 21, 1989, the order of the Board of Finance and Revenue at No. M-RT-17, 297, dated June 23, 1987, is affirmed. The Prothonotary is directed to enter judgment in favor of respondent unless exceptions are filed within thirty (30) days of the entry of this order.

In 1986, the sections of the Tax Reform Code of 1971 dealing with the realty transfer tax were restructured and the definition of *513“document” was shortened. Transactions previously were not taxable because that definition stated that “document” did not include certain transactions; following the latest amendments, a section was added which identified “excluded transactions”. Act of July 2, 1986, P.L. 318, 72 P.S. §§8101-C-8103-C.1. (Supp. 1988).

At the time this deed was recorded, petitioner claimed that no tax was due because the Redevelopment Authority of Berks County was “an exempt redevelopment authority”. (Stipulation of Facts, #4, 8/17/88) As the definition makes clear, however, a transfer to a redevelopment authority is not subject to the tax only if the property was acquired by gift, dedication, deed in lieu of condemnation or a deed confirming condemnation proceedings, none of which is applicable here. Furthermore, petitioner does not contend in this appeal that this property was acquired by gift, dedication, deed in lieu of confirmation, or deed confirming condemnation.