S & H Transport, Aplt. v. City of York, 210 A.3d 1028

S & H Transport is a York-based freight broker that invoices shippers for both carrier shipping charges and its broker commission, then remits the shipping charges to carriers.
York City levies a Business Privilege and Mercantile Tax (BPT) on gross volume of business; its BPT Regulation excludes "freight delivery or transportation charges paid by the seller for the purchaser."
An audit assessed S & H for BPT on the full amounts it collected (2007–2011); S & H claimed the shipping fees were excludable because it merely passed them through to carriers.
Trial court ruled for S & H (treated shipping fees as conduit funds); Commonwealth Court reversed, holding S & H is not a "seller" under the exclusion and that gross receipts include pass-throughs.
Supreme Court considered whether the LTEA or York’s BPT Regulation permitted exclusion of shipping fees collected by a broker and whether ambiguous tax exclusions must be construed for the taxpayer.
Holding: the Court found the LTEA exclusion inapplicable (no contract-of-sale seller advanced charges), but construed the City’s broader BPT Regulation ambiguity in favor of the taxpayer and allowed S & H to exclude the remitted shipping fees from taxable gross receipts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a freight broker may exclude shipping charges it collects and remits from taxable gross receipts under York’s BPT Regulation	S & H: the Regulation’s freight-delivery exclusion covers charges "paid by the seller" and should include brokers who sell transportation services and only act as conduits for carrier fees	York: the exclusion applies only when a seller of goods advances freight charges for a purchaser; S & H is a service broker, not a seller of goods, so all amounts it receives are taxable gross receipts	The Court held the Regulation is ambiguous about "seller," construes tax exclusions for the taxpayer, and permits S & H to exclude the remitted carrier fees from gross receipts
Whether the LTEA’s exclusion (charges "advanced by a seller ... in accordance with a contract of sale") bars taxing these broker-collected shipping fees	S & H: the LTEA exclusion (and regulation) should protect these funds because federal rules require brokers to hold and remit shipping charges and they do not retain them	York: LTEA exclusion applies only where a seller of goods advances freight charges under a contract of sale; S & H is not such a seller	The Court held LTEA’s exclusion is inapplicable because S & H is not a seller advancing charges under a contract of sale

Reiter v. Cooper, 507 U.S. 258 (1993) (describing role of freight brokers as intermediaries)
V.L. Rendina, Inc. v. City of Harrisburg, 938 A.2d 988 (Pa. 2007) (discussing municipal business privilege taxes under LTEA)
Wightman v. City of Pittsburgh, 430 A.2d 717 (Pa. Cmwlth. 1981) (pass-through payments held taxable as gross receipts)
Greenwood Gaming v. Commonwealth Dep’t of Revenue, 90 A.3d 699 (Pa. 2014) (tax enactments strictly construed in favor of taxpayer)
AMP Inc. v. Commonwealth, 852 A.2d 1161 (Pa. 2004) (exemptions from tax strictly construed in favor of taxpayer)