5 Pa. Commw. 548 | Pa. Commw. Ct. | 1972
Lead Opinion
Opinion by
Olan Mills, Inc. of Ohio (Olan) filed exceptions to the opinion and order of this Court reported as Commonwealth of Pennsylvania v. Olan Mills, Inc. of Ohio, 1 Pa. Commonwealth Ct. 230, 274 A. 2d 272 (1971). We held that, although the taking of pictures in Pennsylvania for processing in another state for return and sale as finished portraits in Pennsylvania literally qualifies as the manufacturing of personal property under the Act of May 29, 1963, P. L. 49, 72 P.S. §3403-1, et seq., the manufacturing exclusion allowed by the statute does not apply to the cameras and unexposed film used in Pennsylvania since the entire production of the custom-made portrait is performed in Ohio. It was determined that only" after the arrival of the film in Ohio did the actual first production stage of the portrait begin and the various procedures by Olan’s skilled employees take place that result in the final product.
We have carefully considered Olin’s exceptions and find them to be without merit. We only deem it necessary to discuss the assertion now made by Olan that our interpretation of the Act of May 29, 1963, 72 P.S. §3403-1, et seq., is unconstitutional as being in violation of the Commerce Clause of the United States Constitution. Olan cites Halliburton Oil Well Cementing Company v. Reily, 373 U.S. 64, 83 S. Ct. 1201, 10 L. Ed. 2d 202 (1963), rehearing denied, 374 U.S. 858, 83 S. Ct. 1861, 10 L. Ed 2d 1082 (1963), in support of this contention.
In Halliburton it was held that a Louisiana use tax, as applied to the labor and shop overhead cost of assembling in Oklahoma specialized equipment brought by the taxpayer to Louisiana for use in Louisiana, discriminated against interstate commerce in violation of
Accordingly, we make the following
Order
And now, this 31st day of May, 1972, the exceptions filed to the opinion and order dated February 11, 1971, are dismissed and judgment is directed to be entered in favor of the Commonwealth and against Olan Mills, Inc., of Ohio, in the amount of $871.58, together with interest from October 1, 1966 and costs.
Dissenting Opinion
Dissenting . Opinion by
I dissent. This Court has held that Olan Mills uses the purchased cameras and films in the “manufacture of personal property.” 1 Pa. Commonwealth Ct. 230, 235, 274 A. 2d 272 (1971). As I said in my dissenting opinion, I do not, however, agree with the majority that the sales and use tax exclusion sought by Olan Mills is dependent upon the location within this Commonwealth of the production stages of the manufacturing process. 1 Pa. Commonwealth Ct. 237-40.
On exceptions Olan Mills contends that this Court’s interpretation of the statutory requirements for the exclusion sought is unconstitutional under the rationale
In Halliburton, special equipment, assembled outside Louisiana, was subject to a use tax for assemblage costs, while equipment assembled in Louisiana was not subject to the tax. Such a system of taxation was held in violation of the United States Constitution. Here the only distinction between tax excluded cameras and films and those subject to taxation is whether the processing of the product resulting after their use is carried on in the Commonwealth. I can see no distinction between the illegal discrimination against interstate commerce in Halliburton and the practice this Court sanctions today.