Ritz v. Commonwealth

ROBERTS, Justice,

concurring and dissenting.

Although I agree with the majority that appellants should be permitted to exclude from “compensation” on their Pennsylvania tax return the amount paid by appellant John Ritz as union dues, I cannot agree that, on this record, appellants may also exclude depreciation and utilities and insurance expenses for that portion of their home which appellant John Ritz used part-time as an office. Moreover, I cannot join the majority’s voyage into constitutional waters, for *8neither claim raised by appellants presents the proper vehicle for consideration of alleged violations of the uniformity clause, Pa.Const. art. VIII, § 1.

In allowing appellants’ claimed exclusions for the use of their den as a part-time office, the majority unaccountably misplaces the burden of proof:

“Since the Commonwealth does not assert that Mr. Ritz was provided a suitable area in which to perform this paperwork by his union-employer, and since the record establishes that Mr. Ritz performed this work in the den of his home, we conclude that the amount claimed as an exclusion for an office at home was ... an ordinary, actual, reasonable and necessary business expense and must be allowed.”

495 Pa. at 8, 432 A.2d at 171-172. However, as the Commonwealth Court correctly held, the burden is not on the Commonwealth to prove that appellant John Ritz could have performed his union duties elsewhere, but rather on appellants to prove that living expenses related to Mr. Ritz’s use of his den as a part-time office were ordinary and necessary business expenses within the contemplation of his contract of employment. See, e. g., Anastasi Bros. Corp. v. Commonwealth, 455 Pa. 127, 131, 315 A.2d 267, 270 (1974). This appellants have failed to do. The parties have stipulated that it was necessary for Mr. Ritz to perform his union paperwork somewhere, and that he performed the work in his home. However, appellants have neither alleged nor proved that it was necessary for him to do the work at home or that the union contemplated that he would incur household expenses in the course of performing his work. As the Commonwealth Court soundly and realistically observed, “[ijndeed, the so-called expenses, consisting of estimated depreciation and a share of gas, electric and fire insurance costs seem to be items which the appellants would have incurred regardless of Mr. Ritz’s use of his den in doing his union paperwork.” Ritz v. Commonwealth, 50 Pa.Cmwlth. 155, 162, 412 A.2d 1114, 1117 (1980).

Before appellants may challenge, as violative of the uniformity clause, the alleged inequity of denying them exclu*9•sions for ordinary and necessary business expenses where the same exclusions are permitted to independent contractors, they must first show that their claimed exclusions are, in fact, ordinary and necessary business expenses. As the Commonwealth Court unanimously and correctly concluded, appellants have failed to meet this threshold burden of proof. Clearly the majority errs in deciding, on constitutional grounds, an issue which appellants lack standing to raise.

So, too, the majority errs in seeking a constitutional basis for its decision to permit appellants an exclusion for mandatory union dues. “This Court has consistently held that we should not decide a constitutional question unless absolutely required to do so.” Mt. Lebanon v. County Board of Elections, 470 Pa. 317, 322, 368 A.2d 648, 650 (1977). Accord, Lattanzio v. Unemployment Compensation Bd. of Review, 461 Pa. 392, 336 A.2d 595 (1975); Lynch v. O. J. Roberts School Dist., 430 Pa. 461, 244 A.2d 1 (1968); Robinson Township School Dist. v. Houghton, 387 Pa. 236, 128 A.2d 58 (1956); Commonwealth v. Picard, 296 Pa. 120, 145 A. 794 (1929); Bedford v. Shilling, 4 Serg. & R. 401 (1818). Similarly, the Supreme Court of the United States has stated: “If there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that we ought not to pass on questions of constitutionality . . . unless such adjudication is unavoidable.” Spector Motor Service, Inc. v. McLaughlin, 323 U.S. 101, 105, 65 S.Ct. 152, 154, 89 L.Ed. 101 (1944) (Frankfurter, J.). Accord, e. g., Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409, 91 L.Ed. 1666 (1947).

Since the payment of union dues was mandated by appellant John Ritz’s contract of employment with the railroad, it is reasonable to assume that the portion of appellant’s salary representing those dues was not compensation “received for services rendered” within the meaning of section 303(a)(1) of the Tax Reform Code. Commonwealth v. Staley, 476 Pa. 171, 176-77, 381 A.2d 1280, 1282-83 (1978). In light of this entirely adequate and proper statutory basis for the majority’s holding, a ground upon which at least three members of *10this Court agreed in Staley, there is no need for the majority to address the issue of the claimed violation of the uniformity clause. Moreover, the majority’s citation of Staley as controlling authority for its constitutional analysis ignores the fact that only one member of the Court in Staley reached the superfluous constitutional issue.

Appellants’ only meritorious claim — that they should be permitted to exclude Mr. Ritz’s mandatory union dues from “compensation” — is, as the majority correctly observes, “analytically identical to Staley.” (495 Pa. 9, 432 A.2d at 171). Thus, this case should be decided, as Staley was, on statutory, not constitutional, grounds.

That portion of the order of the Commonwealth Court denying appellants’ exclusion of Mr. Ritz’s contractually mandated payment of union dues should be reversed on the ground that the salary received for such a payment is not “compensation” under section 303(a)(1) of the Tax Reform Code. That portion of the Commonwealth Court’s order denying appellants an exclusion for living expenses relate to Mr. Ritz’s use of his den as a part-time office should be affirmed.

O’BRIEN, C.J., joins this concurring and dissenting opinion.