Opinion
March 18, 1965.
April 15, 1965.
Taxation — School districts — Tax upon privilege to engage in amusement — Payment of tax by persons acquiring privilege — Bowling — Tax not imposed upon use of property — Corporation subject to capital stock tax — Publication of re-enacting resolution — Original resolution — Proof as to intervening re-enactments — Tax effective as to defendant more than thirty days after enactment — Exemptions — Severability clause — Charges less than ten cents on individual bowling frame — Time of enactment of resolution — Constitution of Pennsylvania — Acts of June 25, 1947, P.L. 1145 and March 10, 1949, P.L. 30.
1. Where it appeared that plaintiff school district, by resolution of the school board, imposed a tax upon "the admission fee or privilege to attend or engage in any amusement", to be paid "by the person acquiring such privilege", and required the person conducting the amusement to collect the tax as agent of the school district, and defined "bowling" as an "amusement"; and that defendant, a Pennsylvania corporation, operated bowling alleys within the school district; it was Held that (a) the tax was on the privilege of engaging in the amusement, and not on property or the use of it; (b) the fact that defendant was subject to the capital stock tax did not prevent the imposition of the amusement tax; and (c) the imposition of the tax on defendant was not in violation of the enabling act of June 25, 1947, P.L. 1145, as amended.
2. Where it appeared that notice of the re-enacting resolution was published within ten days, and that the record also showed that the original tax resolution was adopted on a specified date approximately ten years before and that a notice of intention to adopt the original resolution was advertised in accordance with the enabling act; and that records and documents for the intervening years were introduced in evidence to support the finding of the court below that such resolutions imposing an amusement tax were passed and were in substantial compliance with the enabling act; it was Held that it was necessary only to show the passage of the resolution for the original year and the resolution for the tax year in question, together with the proper advertisements, and that defendant's contention, that it was incumbent on plaintiff to establish that all of the intervening re-enactments were in accordance with the enabling act, was without merit.
3. Where it appeared that the tax in question did not become effective as to defendant until more than thirty days after enactment of the resolution, on which date defendant commenced operation of its bowling alleys, defendant's contention that the tax resolution was invalid because it purported to go into effect less than thirty days following its adoption, was Held to be without merit.
4. Defendant's contention, that the part of the tax resolution which exempted children under twelve years and certain charitable institutions violated the uniformity provisions of the Pennsylvania Constitution, was Held to be without merit, in that even if the exemption clause would otherwise render the ordinance unconstitutional, the severability clause would strike down the exemption provision and make the nontaxables part of the taxable class, and render the ordinance valid.
5. Where it appeared that the established practice was to charge for all frames bowled at the conclusion of the bowling, and not after each frame was bowled, defendant's contention, that it charged from three to five cents per bowling frame, and that no tax could be levied on a charge of less than ten cents, was Held to be without merit.
6. Defendant's contention that the tax was not adopted in April or May or June as set forth in the School Code of March 10, 1949, P.L. 30, § 672, as amended, was Held to be without merit.
7. Defendant's contention, that the tax sought to be imposed was prohibited under article IX, § 3, of the Pennsylvania Constitution, was Held to be without merit, in that the tax was imposed not upon the corporation, but upon the persons who availed themselves of the privilege of the amusement.
Evidence — Presumptions — Performance of official acts.
8. There is a presumption that official acts or duties have been properly performed. Appeals — Superior Court — Binding authority of decision of Supreme Court — Act of June 24, 1895, P.L. 212.
9. Under § 10 of the Act of June 24, 1895, P.L. 212, the Superior Court is forbidden to reverse a decision of the Supreme Court.
Before ERVIN, P.J., WRIGHT, WATKINS, MONTGOMERY, JACOBS, and HOFFMAN, JJ. (FLOOD, J., absent).
Appeal, No. 150, Oct. T., 1965, from judgment of Court of Common Pleas of Bucks County, Sept. T., 1960, No. 81, in case of School District of Township of Bensalem v. Rose Bowl, Inc. Judgment affirmed.
Assumpsit. Before BIESTER, P.J., without a jury.
Findings entered for plaintiff; exceptions to findings dismissed and judgment directed for plaintiff. Defendant appealed.
David Goldberg, with him Verlin Goldberg, for appellant.
George T. Kelton, Solicitor, with him Begley, Carlin, Mandio, Kelton and Popkin, for appellee.
Argued March 18, 1965.
This is an action of assumpsit by the plaintiff school district to recover amusement taxes for the year 1960-61. The resolution of the school board, adopted June 13, 1960, under the provisions of the act approved June 25, 1947, P.L. 1145, and its amendments, 53 P. S. § 6851 et seq., imposed a tax upon "the admission fee or privilege to attend or engage in any amusement" and was to be paid "by the person acquiring such privilege, said tax being at the rate of one cent (1¢) for each ten cents (10¢) of such established price."
Defendant operates a thirty-two lane bowling alley within the school district. The case was tried before Judge BIESTER, without a jury, upon complaint and answer. Defendant attacked the resolution on several constitutional and statutory grounds. The court made findings of fact and conclusions of law and found for the plaintiff against defendant for the taxes payable. Since the Bensalem Township supervisors had enacted a similar tax, plaintiff recovered only five per cent of the amounts paid by patrons to defendant. Exceptions were argued before the court in banc, which made three additional findings of fact and entered judgment for the school district.
The resolution imposing a ten per cent amusement tax defines "bowling" as an "amusement" and the person conducting the amusement as a "producer." It further requires producers to collect the tax and holds them liable as agents of the school district to pay the same to the tax collector.
First, appellant contends the amusement tax here sought to be imposed is invalid because it is in reality a tax on property, or the use of bowling equipment, of a Pennsylvania corporation which is already subject to State tax and is therefore prohibited by the enabling act. The enabling act, supra, forbids "(3) . . . a tax on the privilege of employing such tangible property as is now or does hereafter become subject to a State tax; . . .". In Plymouth Lanes, Inc. v. Plymouth Twp., 415 Pa. 206, 210, 202 A.2d 811, the Supreme Court specifically answered this question against this appellant, stating, page 210: "In the present case a tax of ten percent (10%) of the charge made for engaging in bowling is imposed upon the person performing the activity and is to be collected by the person imposing the charge. On the other hand, bowling alley equipment, when acquired by the proprietor of the alley, is subject to the State's sales and use tax; and, here the proprietor . . . pays a State capital stock tax. Obviously, the stated burden of the tax in each instance is on different taxpayers: in one, on the bowler; in the other, on the operator. More important, however, for purposes of the present limitation the local tax is on the privilege of engaging in the amusement; the fact that this particular amusement happens to involve the use of certain property subject to a State tax is coincidental to the incidence of the local tax. The latter cannot be considered as a tax on the privilege of using bowling equipment; therefore, it does not violate the limitation contained in the Act of 1947, supra."
The appellant in effect asks us to reverse Plymouth Lanes. This the legislature, when it gave birth to our Court, forbade: § 10 of the Act of June 24, 1895, P.L. 212, 17 Pa.C.S.A. § 198.
The fact that the appellant is subject to the capital stock tax does not prevent the imposition of the amusement tax: Moon Schools Union School Dist. v. Tiglio, 183 Pa. Super. 67, 69, 128 A.2d 150. The tax is on the privilege of engaging in the amusement, and not on property: Fierro v. Williamsport, 384 Pa. 568, 120 A.2d 889.
Appellant alleges the resolution of 1960-61 imposing the tax was defective and void in that the publication and procedure, as prescribed by the enabling act, 53 P. S. § 6852, were not followed. Section 2 of the enabling act provides that publication of notice of intention to pass such ordinance or resolution shall be given once a week for three successive weeks, in a newspaper of general circulation, in the case of an original resolution, and a notice published within ten days after the re-enactment of a resolution without substantial change.
The record shows that on June 17, 1960 the following notice was published in The Bristol Daily Courier and the Levittown Times, daily newspapers of general circulation, printed and published and having its place of business at Bristol, Bucks County, Pa.: "NOTICE IS HEREBY GIVEN that the Board of School Directors of the School District of the Township of Bensalem has, under the provisions of the Act of June 25, 1947, as amended, P.L. 1145, re-enacted without substantial change and at the same rates for the fiscal year commencing the first Monday in July, 1960, the resolutions of the preceding fiscal year which imposed taxes at the following rates and on the following subjects: . . .
"3. Upon the privilege of attending amusements, ten percent.
. . .
BENSALEM TOWNSHIP SCHOOL DISTRICT By Norman C. Gaugler Secretary"
The record further shows that the resolution referred to in the above notice was passed by the board on June 13, 1960. The record also shows that the original tax resolution was adopted by the board on May 10, 1950 and that a notice of intention to adopt the original resolution was advertised in the Delaware Valley Advance and the Morrisville Herald, being newspapers of general circulation in the community, on April 20, 27 and May 4, 1950. The advertisement was in accordance with the act. See Eck v. Williamsport School District, 197 Pa. Super. 591, 594, 180 A.2d 79.
It is the position of the appellant that it was incumbent upon the appellee to establish that all of the intervening re-enactments were in accordance with the enabling act. There is a presumption in favor of the correctness and regularity of all of these official acts: Tremont Township School District Appeal, 366 Pa. 404, 409, 77 A.2d 403. Records and documents for the years 1950-60 were introduced in evidence and supported the finding of the court below that such resolutions imposing an amusement tax were passed and were in substantial compliance with the enabling act of 1947, supra. It would place an insuperable burden on the appellee to comply with appellant's demand and we do not believe it was necessary. It was only necessary to show the passage of the resolution for the original year (1950) and the resolution for the tax year in question (1960-61), together with the proper advertisements as provided for in the enabling act, supra. This was done.
The only taxes involved in this present appeal are those which were levied under the 1960-61 resolution and such taxes were valid if it appeared that the 1960-61 resolution was a substantial re-enactment of the resolution for the preceding year. The court below found that it was and its finding is supported by evidence.
The record further shows that the secretary of the appellee, by letter to the Bureau of Municipal Affairs of the Commonwealth of Pennsylvania, certified that the 1960-61 tax was a re-enactment without substantial change of the previous year's tax.
Appellant further argues the invalidity of the tax resolution of June 13, 1960 which purported to go into effect the first Monday of July 1960, or less than 30 days following its adoption. The appeal section of the enabling act of 1947, as amended in 1949, 53 P. S. § 6853, provided: "No tax levied by any political subdivision to which this act applies shall in any event go into effect until thirty days from the time of the adoption of the ordinance or resolution levying the tax." By a 1961 amendment, Act of September 25, 1961, P.L. 1643, § 2, the thirty-day provision applies only to taxes levied "for the first time." While this amendment was not in effect here, it shows a legislative policy where the tax is a re-enactment. In any event, however, the tax here did not become effective as to this defendant until July 22, 1960, or more than thirty days after enactment of the resolution, on which date defendant commenced operation of its bowling alleys.
Next, appellant argues that the part of the tax resolution which exempts children under 12 years and certain charitable and eleemosynary institutions, violates the uniformity provisions of the Pennsylvania Constitution. In Millcreek Twp. Sch. Dist. v. Star Theatre, 172 Pa. Super. 291, 94 A.2d 53, involving an exemption clause in an amusement tax resolution practically identical with that here questioned, we held that even if the exemption clause would otherwise render the ordinance unconstitutional, the severability clause would strike down the exemption provision and make the nontaxables part of the taxable class, and render the ordinance valid. See Turco Paint Varnish Co. v. Kalodner, 320 Pa. 421, 184 A. 37.
Appellant charges from three to five cents per bowling frame. From this it argues that no tax can be levied on a charge of less than ten cents, citing Moon Schools Union School District v. Tiglio, supra. Here the court below found that the established practice is to charge for all frames bowled at the conclusion of the bowling, and not after each frame is bowled. If we take a realistic view of the matter, clearly the tax cannot be avoided under the theory that the charges are less than ten cents per unit.
Appellant alleges the tax here was not adopted in April or May or June as set forth in the School Code, Act of March 10, 1949, P.L. 30, art. VI, § 672, 24 P. S. § 6-672, as amended. The record shows publication of the budget notice May 16, 1960 and adoption of the resolution on June 13, 1960. The publication was in time even if we assume the direction in the School Code is mandatory and not merely directory.
Finally, appellant argues that the tax here sought to be imposed is prohibited under the Pennsylvania Constitution, art. IX, § 3, which provides: "The power to tax corporations and corporate property shall not be surrendered or suspended by any contract or grant to which the State shall be a party." This contention overlooks the fact the tax is imposed not upon the corporation, but upon the persons who avail themselves of the privilege of this amusement: Plymouth Lanes, Inc. v. Plymouth Township, supra.
Judgment affirmed.