*1 thirty filed within days pursu- property, change of this order in the statu- absent 1571(i). ant to Pa. tory R.A.P. tangible personal proper- definition of

ty, may by regula- not Commonwealth DISSENTING OPINION BY President tion, statement, policy impose or the sales Judge COLINS. multiple-user on the renewal of software licenses. I see no to consult reason I dissent. The of a renewal license to practice By policy of other states. use canned computer software is not sub- terms, explicit the statute’s the renewal ject explicit to sales tax under terms multiple-user licenses to use canned com- (Code).1 the Tax Reform Code of 1971 puter tangible software is a transfer of imposed tax is Sales the sale at retail personal or property tangi- a license to use tangible personal property or services. personal ble property. 7202(a). 202(a), § Section 72 P.S. “Sale at retail” encompasses the transfer for con- ownership, custody

sideration of the or

possession tangible personal property,

including grant of a or license use

consume tangible personal property. Sec- 720100(1). 20100(1), §

tion 72 P.S.

“Tangible personal property” is INSTITUTE, AMERICAN LAW

corporeal personal property including, Petitioner to, merchandise, goods, but not limited steam and natural and manufactured use, gas and bottled for non-residential Pennsylvania, COMMONWEALTH of use, electricity pre- for non-residential Respondent. telecommunications, paid premium cable service, premium programming video Pennsylvania. Commonwealth Court of spirituous or liquor vinous and malt or Argued June 2005. beverages drinks, brewed and soft inter- Sept. Decided state telecommunications service ... charged to a service address in this

Commonwealth, intrastate telecommuni-

cations service.... 7201(m). 201(m), Exclu- P.S. in- imposition

sions from of the sales tax personal

clude the sale at retail of com-

puters single-user licensed software

purchased with personal computer;

exclusion does not include the sale at re-

tail of multiple-user licensed software. multiple-user at license renewals is- present

sue case fall outside the

statutory tangible personal definition of amended, §§

1. Act as 72 P.S. of March P.L. 7101-8297. amended, §§ 7101-8297. *2 Kramer, pe- Philadelphia,

Donald W. titioner. Moury, respon- A. Harrisburg,

Kevin dent. COLINS, Judge,

BEFORE: President (P.), LEAJDBETTER, Judge KELLEY, Judge. Senior Judge BY President OPINION COLINS. (ALI) petitions

American Institute Law of Finance and for review of the Board (Board) the re- denying Revenue’s order exemption1 of its sales and use tax newal as an institute of 204(10) organization, fire any Tax Code of volunteer 1. Section Reform charitable Act of March as amend organization nonprofit educational men’s ed, 7204(10), exempts sales institution...." retail, (i) and use sale at or use "[t]he stipulated by parties2 principles nonprofit organiza- of the law of facts tions; ALI nonprofit corpora- ongoing analysis are as follows. is a of World Trade organized decisions; tion under the law of the Dis- Organization clarifying up- principal place trict of with its of dating Columbia the Restatements of the Law *3 Third, in Philadelphia. developed business ALI’s charitable it between 1923 reform; 1944; purposes legal are education and and development princi- and specifically, more as stated its certificate ples governing property intellectual incorporation, goals its are the clarifica- In aggregate litigation. collaboration with (ABA), simplification tion and of the law and its Bar the American Association needs, adaptation improving to social legal ALI-ABA offers education courses justice, administration of and the encour- through variety and materials of media. agement promotion scholarly developed Principles In ALI exempt ALI from scientific work. is Governance, Corporate which continue to federal income tax under IRC Section adopted throughout country. Its 501(c)(3). membership Its elected consists Rights Statement of Essential Human was scholars, of legal attorneys, and members used as the basis for the United Nations’ judiciary. Ex officio in- members Rights Universal Declaration of Human Justices, clude the U.S. adopted years in 1948. In recent ALI has judges the chief of the Circuit Courts of projects including on worked international Attorney the U.S. General and development of transnational rules and General, judge chief Solicitor of the jurisdiction procedures, international state, highest state court of each law judgments, Foreign and a Restatement of deans, presidents, school bar association Relations Law of the United States. prominent legal and the leaders of other 2002, ALI February applied In for re- organizations. required to Members are exemption, of its newal sales use actively participate ALI’s work. For Appeals which was denied. The Board of 22,000 spent volunteers an estimated upheld of Finance Revenue annually hours on ALI projects law reform exemption. the denial of 66,000 and an estimated hours on ALI- ABA programs education and materials. 2(a)(v) VIII, Article Section states, in

Among projects perti ALI’s current are the Constitution Assembly may by drafting proposed part, of a federal statute for nent “The General (v) from taxation: .... foreign judg- exempt the uniform treatment of law Insti ments; charity....” researching and evaluation of tution of Const, 2(a)(v). VIII, § sentencing criminal nationwide and under art. Because Code; exempt a tax acting the Model Penal as an edito- Constitution itself does not taxation, permits but rather payer rial board for the National Conference Laws, limits, legislature to do so Commissioners on Uniform State within entity seeking defending exemp a tax including development of international that it a purely annotations to the Commercial tion must first establish is Uniform Code; meaning of Arti collaborating development public charity on the within the VIII, by meeting the mini procedural system adjudicat- a uniform for cle developing qualifications mum constitutional set forth ing disputes; international Commonwealth, stipulated parties appeal Philadelphia on Gas Works v. The facts (Pa.Cmwlth.1999), affirmed, binding are and conclusive and should be 741 A.2d 841 (2000). regarded findings as this Court’s of fact. num Project it does benefit an indefinite v. Com- Hospital Utilization monwealth, large, rather a definite ber of but beneficiaries, primary and that (HUP), statutory- it class and second that meets are not attorneys, who beneficiaries qualifications under Section In sup legitimate Purely 5 of Char- the Institutions Public Act).3 arguments, of its the Board relies port (Charity Op- ity Act Edu tions, PICPA Foundation Property Inc. v. Board Assess- Commonwealth, v. and Research ment, Review, 672, cation 571 Pa. Appeals and (1993), A.2d 187 and Com determining Commonwealth, munity Accountants an institution is one of whether (Pa.Cmwlth.1995), affirmed, A.2d 652 val- public charity prior cases have limited *4 (1996). 259, In Pa. PIC 544 continually ue as because of precedent upheld PA the denial charity concept nature of the changing of exemption use tax after of a sales and time, and of the variable circumstances concluding that the facts demonstrated place, purpose. City Washington v. of general on the that the benefit bestowed Assessment 666 A.2d of pur was at most indirect. PICPA’s (Pa.Cmwlth.1995), affirmed, Pa. 352 550 encouragement was the of education pose 175, 120 (quoting 704 A.2d G.D.L. accounting, in and its ser and research District, Plaza v. Council Rock School 515 disseminating accounting vices consisted of (1987)). 59-60, Pa. 526 A.2d offering information and related confer entity An meets the constitutional ences whose attendees were ac as a if qualifications purely public Accountants, countants. In possesses following it characteristics: exemption was on the same denied 1) 2) purpose, advances charitable do provide to free grounds; purpose its was gratuitously nates or renders substantial accounting management financial ser 3) services, portion of its benefits a sub nonprofit organizations vices to small persons stantial and indefinite class of who of these small businesses. We find both 4) are legitimate subjects charity, re factually distinguishable. to cases be lieves government of some of its bur “charitable,” a legal word 5) den, operates entirely free from sense, every for a gift includes HUP, private Pa. at profit motive. use, applied, to consistent with 12-13, at 1311-12. At issue laws, of an indef- existing for benefit present only case question is persons, designed to inite number of ALI benefits a substantial and whether educational, from an reli- benefit them persons legiti indefinite class of who are moral, physical or social stand- gious, subjects charity.4 mate meaning it is In its broadest point. something argues ALI is understood “to refer to done The Board of our fellows or given not entitled to the because services, purpose provide public.” to educational is 26, 1997, the issue 3. P.S. both ALI and the Board frame Act of November solely fourth this Court as before Charity requirements, Act whether HUP 4. The Board’s order states that ALI failed and indefinite class ALI benefits a substantial qualifies it as a establish that legitimate who specifically charity but does not state which charity. requirements The briefs it failed meet. School, 21, 25, In re Hill 87 A.2d dertaken the restatement of the common (1952) (quoting Taylor Hoag, v. 273 law for the benefit of all those affected (1922)). 194, 196, law, developed 116 A. 826 the Uniform “[W]hat- Commer- Code, gratuitously ever is ... requires done for the ad- cial an achievement that no public good vancement of the is a public explanation, developed further the Model Code, In every such case as the making Penal criminal codes nation- beneficiary, is the is a wide more rational and coherent. ALI’s charity.” Academy Trustees Rights Protes- Statement of Essential Human Episcopal Taylor, tant Church formed the basis for international human law, 25 A. rights developing and its work procedure, transnational civil restatements Society Testing American Mate law, jurisdic- foreign and international Taxes, rials v. Board Revision judgments tion and are fundamental (1967) (ASTM), developing established and nations world- upheld Society’s ex Judges justices highest wide. emption purely public charity as a over the of the nation’s courts contribute to the objection of Philadelphia’s accomplishment goals through of ALI’s principal beneficiaries were its member *5 membership participation. their To ship, which not open public, was to the ASTM, paraphrase in Supreme the Court Society that the had no contact with the apparent meager it must from even this be public through save library, its which was spheres activity summarization of ALI’s of not a library rarely interest attorneys. that it is than benefit does more public. used the concluded Court lawyer, Henry As New York trial G. Mil- that Society primarily the benefited the ler, said, system legal once “The is often a general public. The Court has since rein we, mystery, preside priests, over concept purely forced the that a public baffling everyday rituals to citizens.” Le- charity provide gener can members of the gal simplifica- and clarification and reform al with resources that would not adaptation tion of the and its to social law reach, otherwise be within their and that clearly society needs as a whole. fully “it is consistent with fundamental ,To public charity character of a purely to the extent that the Board focused general public.” activities, benefit the Unionville- solely on legal ALI’s education ASTM, Chadds Ford School District v. Chester again paraphrasing gain whatever County Board Assessment attorneys can be to accrue to eventu- said of Pa. See also ally accrues as to the benefit YMCA, Appeal Sewickley Valley Continuing legal gener- well. education is of (Pa.Cmwlth.2001). 1A.2d ally attorney for an requirement annual practice or her license to to maintain his argues, As ALI analysis the Board’s law; however, purpose continuing of only considers a portion ALI’s purpose responsibili- legal professional education is undisputed and activities. It is that ALI’s attorneys ty, helps which ensure that are primary purposes, as stated in its articles discharge public. able to their duties to the incorporation exemplified by and as Understanding Be- See Memorandum of activities, reform, bulk of its are clar- ABA, tween ALI and Stipulations simplification ification and of the law and Fact, Exhibit B. needs, its adaptation improv- to social ing justice. the administration of In fur- that ALI benefits a Having determined thering precise goals, persons those ALI has un- substantial class of and indefinite majority charity, holding, of its subjects support we legitimate who are Society American upon it the statu- relies similarly conclude that meets Board Revision Materials v. Testing under tory qualifications (1967) Taxes, 5(e) Act, Charity P.S. (ASTM), Supreme up wherein 375(e), provides § that an institution which a Society’s exemption as held the charity is that purely public one meets (b) of Philadel over set in the criteria forth subsections (e). objection principal that its beneficia (e), Charity phia’s through Subsection membership, was not ries were persons, in terms identical those used Society public, and that the test, open to the institution requires the HUP public save had no contact with the class of benefit a substantial and indefinite Therein, Supreme library. through its legitimate who “[wjhatever 375(e)(1). gain accrues Court stated Under the eventually industry through ASTM ac statutory qualification, crues to the benefit of well.” may taxation exempt from one ASTM, at 225 A.2d at provides pub- to the general services However, questioned this later Sewickley lic. Appeal Valley YMCA. reliance in ASTM an Court’s Accordingly, the order of the Board of public benefit determined that indirect Finance and Revenue is reversed. longer was no valid as result of same the criteria established ORDER subsequent Hospital decisions Court’s Commonwealth, Project v. Utilization NOW, day AND September this 15th (HUP) order Finance *6 v. Rock Corporation G.D.L. Plaza Council above-captioned and Revenue mat- District, 54, 526 A.2d 1173 School 515 ter is reversed. their Board progeny. See of Chief Clerk is directed enter City Taxes Philadel Revision of judgment in favor of American Law Insti- phia American Board Internal Medi v. tute against the Commonwealth of cine, 204, 418, A.2d 154 623 Pa.Cmwlth. exceptions unless are filed (1993), appeal allowance petition days within Pa. R.A.P. pursuant denied, 636, 1671(9. In Board Revision Taxes Philadelphia, this Court stated that decisions in Dissenting Opinion by Judge Senior have followed those “[w]e charitable ac KELLEY. that the institution’s holding ‘object’ tivity directly must I I respectfully dissent. believe ma- benefits to charity, and that ‘indirect’ jority’s holding, the American that Law public are considered charitable.”1 not (ALI) a renewal of Institute is entitled to Id. as an exemption its sales use majority that recognize I that the states purely public charity, erodes institute reinforced the [Supreme] Court has meaning “charity.” “[t]he of the term Charity Purely Act Supreme Public suggest 1. I that the Court’s reliance Institutions public longer Act), benefit is also no an indirect (Charity of November Act statutory qualifications valid a result of the 10 P.S. 375. exemption in Section 5 of the set forth charity that a lie concept quality gives can or unrestricted that it its ” provide general public members of the character.’ Id. at 714 A.2d at with not Donohugh’s resources that would be (quoting Appeal, otherwise (1878)). words, within that fully their reach and ‘it is In other a chari- with ty consistent the fundamental character all persons regard can benefit without purely public charity of a to benefit the per- to economic or such status whether ” public.’ general Majority Opinion at poor are requirement sons rich but the 1092 (quoting Unionville-Chadds Ford entity remains that an a must benefit sub- County School District v. Chester (re- stantial and indefinite class of Assessment 552 Pa. status) gardless of legit- economic who are (1998)). However, I believe that the imate order meet majority has misinterpreted Supreme qualifications purely constitutional as a holding Court’s in Unionville-Chadds public charity. See HUP. expanded Ford District and School I that Accordingly, do not believe beyond Supreme same Court’s intent.2 Supreme Unionville-Chadds In Unionville-Chadds Ford School Dis- Ford School District the notion revalidated trict, reviewing proper- when whether real general public indirect benefits to the Gardens, ty Longwood owned Inc.3 was Therefore, I considered charitable. tax, exempt real estate akin believe this case is more to the rejected that the notion line of cases that the majority finds factu- subject cannot a of charity be be- ally distinguishable upheld have cause such class of beneficiaries would the denial of a sales and use tax limited to incapaci- those who are concluding after demonstrat- the facts financially

tated or distressed. so do- ed that gener- the benefit bestowed on the ing, Court held that the ben- al was at most indirect. of charity eficiaries not be need limited to those who are in and that For example, distress there is PICPA Foundation for no requirement that all of the benefits be- Education Research Common- wealth, (1993), aby stowed go only PICPA, financially needy. to the nonprofit corporation, Unionville- involved *7 District, Ford which purpose Chadds School Pa. at was established for the 219, Supreme encouraging 714 A.2d at 400. The education and research ac- counting. pe- stated further that “an essential feature of The Board PICPA’s denied public charity determining ‘is that it is not confined to tition for a after that refund individuals, privileged open qualify nonprofit is to PICPA did not as a edu- but the public. pub- any indefinite It is this indefinite cation institution because benefit to by County, just Nigro Philadelphia 2. in his As stated Justice dissent to Chester outside the District, Unionville-Chadds Ford School "the area. Unionville-Chadds Ford School Dis- applied HUP should to test instead be rein- trict, 215, at at 398. 714 A.2d The force the traditional characteristics of chari- gardens open public been have to the since expand scope ties rather than their to the have the 1920s and been under the control of point meaningless.” that the term is nonprofit operating a since foundation 1970. District, Unionville-Chadds Ford School 800,000 year per Id. More make than visitors (dissenting opin- Pa. at 714 A.2d at 402 gardens. Longwood operates use of Id. the Nigro). ion J. heavy on since reliance endowment funds Gardens, Inc., operating expenses far revenues. exceed its Longwood very large 3. is a and public garden Id. at A.2d at 399. world-renowned located in businesses, proprietors, and small only sole general public was incidental. the prof- with limited organizations This Court affirmed the Board’s determi- nonprofit resources, opposed gen- nation and review to to the as Court, Accountants, that to the Court found receive Community public. eral 204(10) of the exempt status under Section 655 A.2d at 654. 1971,4 corporation Tax Reform a Code Herein, stipulated clearly facts show purely public a chari- had to be considered gener- any upon that benefit bestowed ty, organization pro- to meaning had is, most, by ALI indirect. The al at provided a valuable to the

vide service who benefit class beneficiaries other- government that would consisting class ALI’s services is definite PICPA, provide. Pa. at wise have to attorneys and those associated 634 A.2d at 190. The may ALI profession. with the legal While not concluded that PICPA did meet this reform, clarification undertaken have stating “[ajlthough that requirement [PIC- adap- simplification of the law and its study open groups seminars and PA’s] needs, improving tation to social to the and in fact are advertised in justice thereby engaging administration of circulation, newspapers general several activity, spheres several bottom only 38% of attendees are not PICPA activity is to line is all this directed Furthermore, subject members. is of attorneys parale- professionals such as nature, such a technical it is clear that the scholars, gals, legal judi- members geared courses are and intended to benefit ciary legal organizations and other professional individuals who have a or oc- indirectly society as a whole. only benefits cupational in accounting interest fact remains that ALI a defi- services not an intended to benefit indefinite nite, large, albeit class beneficiaries. people.” number Id. at at Accordingly, the Supreme Court held Moreover, while it is true that whatever upon benefit bestowed attorneys to gain can be said to accrue public by PICPA’s seminars study eventually accrues to benefit of groups was at and ruled that most indirect well, is an gain as said still indirect PICPA was entitled to a tax refund. opposed to general public Id. PICPA, Pursuant direct benefit. Accountants, and the

In Community Accountants v. Com Phila Revision Taxes (Pa.Cmwlth. monwealth, 655 A.2d 652 is insufficient delphia, such indirect benefit 1995), affirmed, 676 A.2d entity as a quality (1996), this Court likewise determined charity under the Constitu per a nonprofit corporation HUP, tion, Charity Act. also and the See non accounting formed services other Com Service v. Biosciences profit was not enti groups and charities *8 Information monwealth, 384, 516 A.2d 101 Pa.Cmwlth. exempt tled to sales tax status under 204(10) benefited (Although the Tax Reform Code service, pur secondarily from BIOSIS’ Specifically, of 1971. this Court conclud BIOSIS, knowledge advance pose of Accountants was not ed re applied biology through theoretical because it directed definite, was not charitable publications, search large, its services at but class primary in that the beneficiaries of small nature which consisted beneficiaries amended, 7204(10). Act March organizations were various who subscribed Pennsylvania Encyclopedia, Law could for a fee periodicals easily satisfy to BIOSIS’ and re- the third prong the HUP quested library.). searches of its test and be considered a on the any guidance basis that advice or con- I believe that the majority’s holding publications may tained in their eventually clearly weakens the stringent standards general public. members Thus, set forth in HUP. majority’s if the I Accordingly, would affirm. stands, position any publisher, they if be- nonprofit, materials, came related

such as Publishing, West which publishes Practice,

Standard

Lawyers Cooperative which Publishing,

publishes Pennsylvania Appellate Prac-

tice, Lexis-Nexis, publishes