*1 eligible then it is to have its costs paid, that the Act also observes Young’s tank. by gas- caused cleanup on associated with the fees on all tanks not does state by the must be oline contamination reimbursed by a claimant owned properties all Fund. any present- claim before current Young’s. with agree We
ed. ORDER out, the Act itself Young’s points As For of individual tanks. speaks in terms NOW, July, day AND this 20th eligible for Fund in order to be example, Underground Storage the order of the prove a claimant must reimbursement dated Decem- Tank Indemnification Board 15, 2008, hereby is and the ber VACATED (1) owner, or certi- operator ... matter REMANDED for further consider- installer the tank which is fied tank opinion. ation consistent with the attached subject the claim. relinquished. Jurisdiction (2) required current fee under sec- paid. tion 705 has been
(3) registered been ac- The tank has requirements of with the sec-
cordance 503.
tion (3) Act, 706(1), 35 P.S. added). (3) 6021.706(1), (emphasis in the Act to a “site”
There is no reference tanks owned a claim- multiple
on which legisla- It follows that the ant are located. NORTHEASTERN PENNSYLVANIA required current fee for “the ture intended CENTER, IMAGING Petitioner per tank. apply Section 705” under we are unable resolve eligibility for Fund reim- Young’s issue of Pennsylvania, COMMONWEALTH witness bursement. The Fund’s testified Respondent. however, fees; unpaid amount of Pennsylvania. Commonwealth Court specify ivhich fees that witness did findings by the Presid- unpaid. were March Argued he incomplete Officer are ing July Decided paid, simply that all “fees” were not found unpaid those specifying without whether throughput capacity were fees.
fees on which finding
Without a assessments tank, not current and for
were
adjudication incomplete. vacate the
Accordingly, we must Board’s remand this matter for more
order and fees, findings throughput on which
specific tank capacity, owing, are and on which Only time. period for what ar- findings, Young’s can we address
such throughput if all fees
gument *2 Varner, Randy
Sharon R. Paxton and L. petitioner. Harrisburg, DeLuca, Jr., Deputy Sr. Attor- Bart J. General, ney Harrisburg, respondent. McGINLEY, Judge, BEFORE: McCLOSKEY, LEAVITT, Judge, and Judge. Senior Judge OPINION BY LEAVITT. ips Systems Medical North American Company addition, (Philips). North- Pennsylvania agreements eastern entered into with Phil- (Northeastern) petitions Center for review ips the maintenance servicing adjudication of an of the Board of Finance *3 the MRI Scan PET/CT denying and Revenue peti- Northeastern’s which paid Northeastern also sales tax.3 Pennsylvania tion for a refund of sales tax $362,811.88 Northeastern seeks a refund of paid it for the acquisition and installation plus interest. of an system MRI and a Scan PET/CT system.1 argues Northeastern the With respect system to the MRI pur- equipment was in installed connection with Philips, chased from paid Northeastern a construction contract and thereafter be- $129,774.02. sales tax in the amount of came a of the real estate. Given The agreement sales between Philips and circumstances, these Northeastern asserts Northeastern fixed the price of that it obligation was the of its vendor to $2,172,375, which acquisition, covered the
pay a use tax on price the wholesale installation, transportation, training, and equipment, and it was not Northeastern’s one-year warranty on system. the MRI obligation pay to a sales tax on the retail The MRI was installed in Northeastern’s price equipment, of this by as found Imaging Center December of 2003. Concluding Board. that Northeastern’s prepare To for the installation of the merit, position has we reverse the Board. system, MRI in accordance with Philips’ Background specifications, Northeastern made exten part,
For the most
sive structural changes
the facts relevant to
to
building.
its
appeal
were
These
by
joint
changes
established
structural
included revi
stipulation
electrical,
paid
facts.2 Northeastern
sions to
building’s
heating,
tax
separate
sales
on two
acquisitions: the ventilation and air conditioning, and
purchase of an
MRI
pur-
plumbing
systems.'4
and the
chase of
Scan
from Phil-
strengthened the floors and ceiling sup
PET/CT
(MRI)
magnetic
1571(f).
A
imaging
sys-
1.
resonance
Pa. R.A.P.
equipment
tem
identify
used to
disease and
135,027.86
damage
$
to soft
paid
tissue areas of the human
Of the
tax
sales
on service
(27th
body.
$98,486.47
agreements,
is for the MRI and
Dictionary
Stedman’s Medical
ed.2000).
positron
A
tomogra-
$36,541.39
emission
system.
is for the
Scan
(PET/CT Scan)
phy/computerized tomography
agreements
planned
Both service
include
system equipment
that uses radioactive sub-
maintenance,
repairs
replace-
as well as
patient
stances
image
administered to the
to
ment services due to
malfunction.
anatomic information from a cross-sectional
plane
body.
of the human
Id. at 1842.
4. A remote air conditioner and a remote chil-
ler for the MRI were installed
Northeast-
Stipulations
2. The
and Exhibits constitute the
ern’s HVAC contractor. The chiller was in-
pursuant
Pennsylvania
record of this case
to
Imaging
stalled outside the
Center and is
1571(f),
Appellate
Rule of
Procedure
which
through pipes
connected
the MRI
pass
provides that
through
Imaging
the walls of the
Center.
[n]o record shall be
certified to the court
(collec-
The MRI was installed in three rooms
the Board of Finance and Revenue. After
Rooms”):
tively, the “MRI
review,
the room in
filing
petition
Room),
magnet
(Magnet
parties
was installed
appropriate steps
shall take
pre-
adjoining
pare
containing power
stipulation
and file a
room
of such facts as
control
agreed
identify
components
adjoining
and an
issues
room contain-
fact,
any,
(Control Room).
ing
if
which remain to be
computer equipment
tried.
material;
Imaging
Center on or about
excess ferrous
stalled
removing
ports,
sizes;
and removed an out December
changed room
move the
to be able to
wall
order
side
preparations
un-
Again, extensive
into
MRI
sys-
dertaken to install
15,201
weighs
pounds
magnet
at the
Center. These includ-
tem
Troughs
by a crane.
only be moved
can
power;
new
the installation of
electrical
ed
the walls and conduit
were installed
ventilation,
air
new
condition-
heating,
the MRI Rooms to
ceilings
above
troughs
ing systems; and installation
wire needed
the cables and
accommodate
above the
and conduits
walls and
the MRI. Radio fre
operate
power
*4
ceiling
scanning
of
control rooms
the
and
panels,
of zinc
shielding, consisting
quency
the
wires
to accommodate
cables and
need-
walls,
in the
floor and
to be
had
installed
power
operate
to
the
Scan
ed
and
PET/CT
of
signals
the radio
the
prevent
ceiling
enlarged
system. Northeastern
also
interfering with oth
equipment from
MRI
rooms;
panels
provide
lead
installed
install
Finally, Northeastern
er devices.
shielding;
doors to al-
enlarged
radiation
the
removal
a vent
safe
of
ed
to allow
entry
system
building;
the
into the
low
of
generated by
vapor
the
cryogenic helium
supports.
and installed additional floor
magnet.
sys-
The total
Scan
weight
PET/CT
delivery
system
the MRI
the
After
of
12,375
including
power
the
pounds,
tem
Center,
personnel assem-
Philips
Imaging
equipment.
bled,
sys-
MRI
the
installed and connected
Philips
approximately two
spent
weeks
building’s plumbing, cooling,
to the
tem
the
of
on
installation
the
Scan
PET/CT
systems. The installation of
and electrical
engineers
system.
Philips
Two
worked on
days.
ñve
approximately
the MRI took
system
day.
gantries
the
each
The
and
magnet
table were bolted
patient
The
patient
the
table
bolted to
installed in
using
to the
anchors
building,
using masonry anchors installed
con-
Magnet
the floor of the
concrete beneath
the floor of the room. Var-
crete beneath
Room.
installed wires
cables were
ious
place
Imag-
The MRI
at the
remains
components
connect
the various
magnet
ing
remove the MRI
Center. To
building’s systems
to each other.
require
from the
would
Imaging Center
system
The
Scan
is hardwired to
PET/CT
days of construction work on the
several
system.
Imaging
electrical
Center’s
of
It would also
interior
system
The
Scan
remains in
PET/CT
an
wall
require
exterior
removal
place
at the
Center. To remove
give
a crane access
building to
require
days
would
several
magnet.
remove
construction to dismantle and
sys-
Scan
PET/CT
components
Imag-
Scan
PET/CT
purchased
Philips,
tem
from
Northeastern
ing Center.
$98,010.
paid sales tax in the amount of
7, 2006, Northeastern
agreement
Philips
On December
between
Department
filed a claim with
Reve-
Northeastern fixed
total
$1,815,000.
refund in
price
(Department), seeking
at
in- nue
a
agreement
$362,811.88
the sales tax
acquisition
Scan amount of
cluded
PET/CT
Scan
transportation,
paid
sys-
on the MRI
system, together with its
PET/CT
tems,
installation,
paid
as well as the sales tax
training,
one-year
and a
war-
systems.
agreements
was
these
ranty.
Scan
in-
service
during period
Appeal
request
this
of transi-
filed
Issues
tax
Department
at the
about how to
tion
Northeastern
a reversal of
seeks
systems.
such
decision.5
Board’s
It contends
Department got
right
in its
letter
20, 2004,
July
Department
issued
On
ruling, in which it
the sale
advised that
ruling
letter
stated that
of an
system triggers
installation
MRI
sale
prospectively the
and installation
seller,
obligation by
opposed
use tax
entity
an MRI to
taxable
is consid-
[a]
obligation by
purchaser.
to a sales tax
ered a construction contract. The
argues
Depart
permanent
is considered to become a
reasoning
ment’s
letter ruling
part of
estate upon
the real
installation.
should
resuscitated
Court
Pennsylvania Sales and Use Tax Letter
that this
should
Court
hold that Northeast
SUT-04-021, 7/20/2004, at 1.
Ruling No.
ern’s
acquisition MRI and
20, 2005,
May
On
issued
trigger
tax
did
a sales
event.
SUT-05-008, rescinding
Ruling
Letter
No.
Alternatively, Northeastern
con
stating
Ruling No. SUT-04-021 and
Department’s
tends that the
denial of its
*5
tangible
be
installed MRI would
taxed as
Equal
refund claim violates the
Protection
property. Northeastern
the
personal
paid
Clause of the Fourteenth Amendment to
systems
tax on its
in various install-
sales
the
States
United
Constitution
ments between December 2003 and Janu- Uniformity
Pennsylvania
Clause of the
2005,
ary
Ruling
while Letter
No. SUT-
The Department granted
Constitution.6
effect; however,
04-021 was in
Northeast-
tax to
taxpayers
paid
refunds of
other
that
requested
refund after that letter
ern
its
systems during
sales tax on their MRI
ruling was rescinded.
period
paid
same
which Northeastern
26, 2007,
On April
Department
de-
on its MRI system.
sales tax
Refunds
20, 2004,
in its
granted
nied Northeastern’s refund claim
were
between July
20, 2005,
entirety.
peti-
then
May
taxpayers
Northeastern
filed a
who came for
Department’s
20,
deci-
May
Taxpayers
tion
review of
ward before
of
Re-
delayed
requests
sion
the Board
Finance
who
their
refund
until
view,
20, 2005,
it
Department’s
May
affirmed the
after
such as Northeastern
petitions
decision.
now
its
request
this who made
refund
on December
7, 2006,
Court
review of
Board’s decision.
denied
were
refunds.7 Northeast-
tax,
appeals
authority
levying
standard of review
and shall be
general
Board of Finance and Revenue
novo.
and collected
is ele
levied
under
laws.
VIII,
Johnston,
Commonwealth,
§
v.
art.
Glenn
Inc.
712
1. In Commonwealth v.
Const,
Pa.
Inc.,
212,
817,
208,
(Pa.Cmwlth.1998).
Molycorp,
481 Pa.
392
A.2d
2
A.2d
819 n.
itio
Add
321,
(1978) (citations omitted),
nally,
323
we stated
strictly
tax
be
statutes must
con
Commonwealth,
"[tjaxpayer allegations
that
against
any
of violations of
strued
equal protection
the federal
clause and the
application
reasonable
of
doubt as
Pennsylvania uniform taxation clause are ana-
statute must
tax
be resolved
favor of the
lyzed
1928(b)(3);
in the same manner.”
payer.
Borough
§
1 Pa.C.S.
Plum
Commonwealth,
School
A.2d
District
860
argues
Department
7.Northeastern
that
1155,
(Pa.Cmwlth.2004).
n. 3
1157
made
policy
should have
the new
effective for
2005,
20,
paid
May
tax
or after
on
8,
Pennsylvania
6. Article
1 of the
Section
the determinative factor was not the date the
provides:
Constitution
but, rather,
refund determination was made
uniform, upon
taxpayer
All taxes
same
paid.
shall be
the date the sales tax
A
was
“deliberate,
subjects,
class
purposeful
of
within the territorial limits
must demonstrate
dis-
to be a
of
tangible
treatment
considered
disparate
asserts
ern
is unconstitu-
taxpayers
personal
subject
similarly
property
situated
and would
Accordingly,
tional.
sales
tax.
Pennsylvania
systematic,
claim
un-
Northeastern’s
claim that
Northeastern’s
response
equal
is unfounded.
taxpayers
treatment
were installed
systems
contract,
Department
construction
Analysis
Northeastern,
Philips,
not
that
counters
with a review of the relevant
begin
We
need-
for the construction
responsible
was
tax principles.
and use
sales
building for
prepare
Northeastern’s
ed
202(a)
1971,
Tax
Reform Code
systems.
the MRI and PET/CT
6,
amended,
Act
P.L.
of March
are items
argues
also
7202(a),9
§
a tax on
imposes
P.S.
that
not
personal property
tangible
personal
retail” of tangible
proper
“sale at
be-
so annexed
ty
certain services. A “construction
real
structures.
came
contract,”
as a
which
defined
“contract
constitu-
to Northeastern’s
construction,
recon
agreement
claim,
denies
Department
tional
struction, remodeling,
or repair
renovation
any
systematic
was
deliberate
there
structure,”
or a
real estate
real estate
explains
discrimination.
goods
sale of
or services
considered
change
was uniform and
policy
that its
trigger
imposition
will
sales
5,May
Depart-
prospective. On
(nn)
tax.
P.S.
(emphasis
adde
public
ruling
ment
letter
issued
d).10 Instead,
pays
website,8
contractor
a use
stating
on its
placed
tangible personal property
now tax
all
ac
purchase or lease of an
was
*6
Department
application
public
of
tax ...
believes that broad
crimination
safeguards
appropriate
before constitutional
are violated.”
is
to
dissemination
ensure uni-
212,
Molycorp,
application
481 Pa. at
A.2d at 323
formity in the
of the law ato
omitted).
(quotation
Northeastern contends
factual
common
situation.
Department
3.2(a)(2).
en-
that the
exercised selective
§
61 Pa.Code
laws,
deliberate,
is
forcement of tax
202(a)
9. Section
states:
purposeful discrimination.
hereby imposed upon
sepa-
each
There is
public
Department
that a
letter
8.The
states
personal
tangible
prop-
at retail of
rate sale
ruling
provide interpretive
is "intended to
services,
herein,
erty or
as defined
within
guidance
general public
to
and does not
per
Commonwealth a tax of six
of
cent
Department
any entity
bind the
to
than
other
price,
which tax shall be col-
http://www.reven
original Taxpayer.”
by
purchaser,
lected
the vendor from the
ue.state.pa.us/revenue/cwp/view.asp?a=23 &
paid
and shall
over
Common-
3.3(a)-(b).
§
q=215435. See also 61 Pa.Code
provided.
herein
wealth as
Code,
According
Pennsylvania
there are
7202(a).
§
72 P.S.
two vehicles the
to issue
use
201(nn)
of the Tax Reform
Section
Code of
policy:
pronounce-
statements
Revenue
states,
part,
as follows:
relevant
rulings.
61 Pa.Code
ments
Revenue
3.2(a).
words,
policy
published
following
phrases
§
Statements of
are
terms
separate part
Pennsylva-
a
of Title 61
when used in this Article II shall have the
section,
authority
nia Code and are
under the
meaning
issued
ascribed
them in this
Deputy Secretary
Secretary,
or the
clearly
except where
context
indicates a
3.2(b).
§
Chief Counsel.
For
meaning:
61 Pa.Code
different
* -s
example,
ruling”
purpose
"Revenue
agreement
guidelines
or oral
or
provide
interpretations by
A written
contract
construction, reconstruction,
advising
Department's ap-
public
remodel-
repair
plication
general
ing,
or
of real estate or a
of the tax laws to a
factual
renovation
ruling
situation. A
when
real estate structure.
Revenue
issued
perform
the contractor
quired by
tures.”12
this amendment ap-
a construction or services contract.
plies only
non-profit
organizations.
ance of
7201(o)(17).11
§
72 P.S.
is a for-profit corporation
and, thus,
(qq)
Section 201
of the Tax Re-
truly
a contract is
for the con-
Whether
dispositive.
form Code of 1971 is not
struction or renovation of a “real estate
differing interpre-
developed
structure” lends itself to
Precedent
in other areas of
tations.
In an effort to
some clari-
provide
provides guidance
law
on what constitutes
ty
point,
legislature
on this
amended
a “real estate structure” for purposes of
202(a)
the Tax Reform
of 1971 to provide
Code
of the Tax Reform
Code
examples
discrete
of “real estate strue-
Appeal
1971.13 In In re
(nn).
(1)
§ 7201
organization,
72 P.S.
a charitable
a volunteer fire-
organization, nonprofit
men’s
educational
201(o)(17)
11. Section
of the Tax Reform Code
religious organization
institution or a
of 1971 defines “Use" as:
religious purposes
qualifies
and which
obtaining by
a construction contractor
purely public charity
an institution of
under
tangible personal property
or services
(P.L.
the act of November
No.
provided
tangible personal property
55),
Purely
known as the "Institutions of
pursuant
which will be used
to a construc-
Act”;
Charity
Public
tangible
tion contract whether or not the
(2)
States;
the United
or
personal property or services are trans-
(3)
Commonwealth,
its instrumentalities
ferred.
political
subdivisions.
7201(o)(17).
regulation
adopted
72 P.S.
A
The term
machinery
includes
Department provides
equipment;
developed
undeveloped
[¡imposition of tax on construction activities
land; streets;
roads; highways;
following:
parking
shall conform with the
lots;
(1)A
seating;
pay
upon
contractor shall
tax
stadiums and stadium
pur-
recre-
courts;
sidewalks;
price,
foundations;
chase
as defined
the [Tax Reform
ational
1971],
property,
walls; floors;
Code
including
of all
supports;
ceilings;
structural
materials, equipment, components
sup-
roofs; doors;
millwork;
canopies;
eleva-
plies, which he
furnishes
installs in the
tors;
windows
external window cover-
performance of his construction activities.
ings;
advertising
signs;
outdoor
boards or
Example
1: As
of a contract for the
dams; dikes;
airport
runways; bridges;
*7
construction of a house "X” Contractor has
devices,
including
traffic control
traffic
agreed to install a built-in dishwasher for
dishes; antennas;
signs;
guardrail
satellite
pays
sup-
his
"X”
customer.
Contractor
his
posts; pipes;
fittings; pipe supports plier
$150 for the
of the dishwash-
valves;
tanks; wire;
hangers;
underground
pays $9
er. “X” Contractor
sales tax to his
conduit;
boxes;
receptacle
junction
in-
supplier
subsequently
installs
dish-
sulation;
thereof;
coverings
ductwork and
washer in the kitchen of the house he is
any
any
structure or item similar to
The dishwasher becomes a
foregoing,
whether or not the structure
realty
and is included in the overall
or item constitutes a fixture or is affixed to
price of the house to the customer.
“X”
estate,
damage
the real
or whether or not
charge
Contractor does not
sales tax on this
would be done to the structure or item or
transaction to his
customer.
contrac-
surroundings upon
its
removal.
may
pay
tor
include the tax he
in
must
his
7201(qq).
72 P.S.
proposal
separately
bid
but not as a
stated
item.
parties agree
13.The
that Commonwealth v.
31.12(a)(1).
Pa.Code§
61
Construction, Inc.,
Beck Electric
485 Pa.
(1979),
201(qq)
12. provide
Tax Reform Code of
Subsequently, clarified Christ this Court (E.D.Pa.1999), the F.Supp.2d 494-495 Mobile holding in Shenandoah Board, a grass considered whether District Court Company Dauphin County v. realty. whether an item was mined tax-exempt tax to like the Common- entities Electric, regulation analysis upon a that was based wealth. held that In Beck the Court superseded. been portability ease of deter- has since of the 1063 (1985), Superior thir- approximately Court considered mixer that stood seed tall, weighed approxi- feet teen to fifteen skydome skylight whether a was “so ton, was mately three-quarters a building annexed” to school consti per- plant foundation was bolted into always realty. tute chattel that realty. The District Court con- sonalty or window, skylight to a compared Court realty. not personalty, it was cluded plainly part realty which was of the of the arrived at this conclusion District Court building. skylight It noted that the was so for the third class of using the Sheetz test integrated building into the its de Nevertheless, focused chattels. the Court injury tachment would cause material annexation, observing that extent building. Accordingly, it concluded into the real estate is critical integration realty. constituted skylights is not and that the size of We find this “extent determinative. system Northeastern’s does not analysis persuasive. annexation” chattels, fall into the class of such second Lienhard, 433,167 Pa. Clayton In v. skylight sprinkler as a or an automatic (1933), Supreme A. 321 our Court consid- system, always realty. that are The MRI sys- sprinkler an automatic ered whether system original was not installed in the and, thus, fell tem was an “annexation” of the building; per- construction a into the second class of chattels identified improvement manent that remains with Supreme in Sheetz. The Court concluded sale; building upon its and is not so sprinkler system that the fell into the sec- affixed that its detachment from the ond class of chattels. It reasoned fol- building damage will building lows: magnet. There is a difference between in the instant case sprinkler system damaging building merely a making must, think, falling we be considered as changes building structural to a in order above within the second class described- large tangible to remove a item of proper- realty purposes. for all It part a of the ty.14 Size alone cannot render chattel original construction was installed case, property realty. Were this the a permanent building; it was realty become if a piano would window upon a improvement pass which would enlarged door had to be or a crane used freehold; it was affixed so sale piano’s without installation or removal. it could not be removed injury building material and dam- absurd, legal a silly, would be and indeed criteria, By ap- to itself. age these piano to be real- outcome for considered realty integral paratus became as an ty. building. added). A. (emphasis short,
Id. at at 322 agree Depart with the ment that Northeastern’s MRI has Prod Finally, in Catanzaro Wasco the, ucts, Inc., 262, not been so Pa.Super. 489 A.2d “annexed” view, appreciate fails to be removed. Under Northeastern's size damage deciding caused the actual detach- will be the factor whether chat- must be Nei- tel constitutes real estate. The need to create ment of *9 large building system opening appli- the ther the nor the MRI itself an removal of by detaching materially piece the ance or of furniture is an accommoda- will be harmed tion, contrast, building preparing damage. By sprinkler system the it for from damaging damages system physical The to the build- cannot be removed without removal. larger building way building ing need create a the in a that makes the will result from the system opening through the MRI can which unusable. sys- Imaging of the Center. These class of chattels walls the second it falls within tems, means that we the canopies This as did the in Sheetz and identified Sheetz. Mobile, under the test systems both the possess must review tower in Shenandoah chattels, third class developed “attachment;”16 for the degree of requisite personalty or that be either those that the has been at- conclude on the circumstances.15 realty, depending tached. Sheetz, three factors used In this Court factor, respect With the second within the a chattel
to determine whether Department argues systems it becomes is so affixed third class occupancy are not essential for the of the estate, apply these real and we part of the only building’s but for the use as con- Accordingly, we must factors here. center. imaging Department attachment an physical the manner of sider: extent systems; places of the too narrow construction on this or installation systems are essential to to which the second Sheetz factor.17 is the owner’s building; sys- and whether the use of the property of the chosen use determines permanent. to be tems were intended essential. In whether both Sheetz and Mobile, this Shenandoah Court held factor, first the De- to the question part the items in were of the an- minimizes the extent partment realty were essential to the to the nexation of the particular pur of real estate use reduces the installation to by the pose chosen owner or lessor of and wire connections. one of mere bolts Sheetz, land. In found that the an Court incomplete description an This is canopies necessary were for the use of the unpersuasive argument. property gasoline as a modern with station days, Philips per- Over a of five period pumps. self-service In Shenandoah Mo the MRI sonnel connected bile, the conceded that the tower Court cooling, and electrical building’s plumbing, was not essential use land. systems. Components of the MRI and pad the concrete was installed systems Scan have been bolted tower, solely to support land sub-floor; into into the concrete hardwired pad and the concrete served no function by the electrical system; and connected tower; tower, together without Additionally, inter-wall cables and wires. pad, with the concrete was held to be is connected to a remote essential to chosen use of land for chiller Cen- installed outside through through placement telephone ter of a cellular tower. pipes pass Sheetz, long deep bolts that were imbedded canopies installed base, Accordingly, it does in-ground not the vendor. concrete foun- was not matter that did the con- dation. preparation the MRI struction in systems. point real is that Department's argument 17.The incon- is also installed without could not be Department's regulation sistent with the at 61 construction that rather extensive. was 31.11, Pa.Code where such items as labora- tables, steamers, tory restaurant bun and re- canopies 16. In were mounted on frigerated display presumed coolers are pillars ground by bolts sunk in attached to the estate, though become of the real even which, turn, poured concrete foundations necessary are not for other these items uses were also The com- covered concrete. premises. was munications tower in Shenandoah Mobile eight-foot- attached to the four *10 out, has im- significant purpose Northeastern made until tuom until the fixed including realty rein- to which is building, to its is devoted accom- provements sub-floors; plished superseded or until the item forcement of the installation is troughs in the walls and con- conduit and another item more for suitable ceilings; purpose. duit above the installation chiller; ah’
remote conditioner revi- Sheetz, at (quotation 657 A.2d omit- plumbing system; installation sions ted) added). (emphasis walls, frequency radio shields in the floor, The ceiling; cryogenic systems creation of a MRI and Scan PET/CT vent; alteration of dimen- they and the room were installed with the that intention openings. These numerous and long building sions remain there so con- structural, electrical, specialized and me- tinues be used Northeastern an improvements Imaging chanical imaging center or until systems must no would serve function without Center replaced they be have become ob- systems Accordingly, themselves. systems solete. The have been that the MRI and Scan conclude years, building for five and Northeastern systems are essential to the use of ongoing replace does not until intend them ei- as an Center. age ther the equipment advance- ments technology medical necessitate factor, to the third facts, replacement. their Given these Department argues equipment that the shown, Northeastern objectively, has an permanently not is installed because is intention systems per- that the become a removable be replaced and can new manent of the real estate.18 However, intention, equipment. as ex is plained by objective measured Thus, we that MRI hold “permanent” criteria and is not be con systems are “real estate literally. We stated strued that meaning structures” within (nn) permanence required equat not [t]he is of the Tax Reform Code 1971. ed with perpetuity. they Just because Each the three satisfies factors have can been and does not moved established Sheetz chattel could mean the intention was to make personalty realty. not be either Northeast- them permanent. supports ern’s evidence conclusion that sufficient if intended, case, item is to remain where in this chattels af- parties replace systems dissent contends that the did wore before out or stipulate equipment Rather, that Northeastern's became obsolete. the Common- place long building would remain in so as the argued "permanent,” wealth that to be imaging equip- was used as an center and the equipment review under has be essential ment did not wear out or become obsolete. anyone’s any building purpose use of parties systems stipulated as, air-conditioning example, system. center,” parts imaging "essential anof holding. was not the this means would have to be leasing The dissent’s statement long there so as the was used anas becoming the norm is not de- imaging Supplemental Stipulation center. stipulation. rived parties’ from the It comes Facts, parties stipulated No. Ruling Department's Letter No. "presently” plans has no to re- SUT-05-008, rescinding Ruling Letter No. place the because Northeastern has such, repre- way knowing SUT-04-021. As the statement replacement no when will belief, Further, Department's necessary. sents but it is not a become the Common- argue might wealth did not that Northeastern fact in evidence.
1066 MRI realty, ity also concludes the and constituted systems, Sean PET/CT remain systems were intended to personalty.19 PET/CT as as the continued place long in Conclusion center, until the imaging be used as an met its burden of Because Northeastern or until either systems become obsolete MRI and that its proving age PET/CT the or advancements estate structures” ac- systems are “real technology their re- in medical necessitate the standards cordance with these conclu- placement. I believe that chattels, of we will reverse the third class accurately are overbroad do not sions peti- of Northeastern’s Board’s denial stipulated by as the reflect facts of sales tax. for refund tion parties. simply stipulations, parties In the
ORDER cases, some MRIs and noted “[i]n 2009, NOW, July, day this 29th of AND are relocated scanners PET/CT Finance order of the Board of reused. An MRI scanner PET/CT matter, above-captioned Revenue in the be before generally would refurbished 18, 2007, hereby September is RE- dated required be reuse recalibration would Clerk is directed to VERSED. Chief may ... An be MRI or scanner PET/CT exceptions final this unless enter order reasons, replaced including, for several days pur- filed within 30 of this order are others, a new among placement of ” 1571(i). to Pa. R.A.P. suant technically proficient model.... more Facts, (Supplemental Stipulation of Para- BY Senior DISSENTING OPINION 5). Additionally, parties graph p. Judge McCLOSKEY. stipulations indicated in the “presently” plans replace had no respectfully disagree I dissent I with (Partial systems. Stipu- majority MRI or by reached conclusions PET/CT Facts, 5; Paragraph p. Sup- lation by that this is a begin noting this case. I Facts, plemental Stipulation Paragraph subject finance and revenue matter de 10). 45, p. record in by novo review this Court.1 solely case and a partial this consists facts, upon stipulated Based the above I fact, stipulation along supplemental accept simply cannot conclusion exhibits, par- attached submitted majority reached that at the time ties. MRI systems building, placed these Northeastern in- Upon stipulations, review of systems permanent majority that Northeastern tended that these concludes (Northeast- Moreover, part rapid Pennsylvania Imaging Center said ern) technology fights in medical an intention advancement objectively has shown fact, against majority’s conclusion. be- leasing of major- type this becom- come real estate. their merits, Commonwealth, Corporation A.2d 6 19. Because on the we decide case (Pa.Cmwlth.2006), affirmed, we need constitu- not address Northeastern's Pa. arguments. (2007). tional stipulation A of facts A.2d 883 Court, binding upon but conclusive Although appeals this Court hears legal own conclusions from draw our appel- Board Finance and Revenue in our those Id. facts. jurisdiction, late this Court functions essen- tially as a trial court. Network Concentric *12 ing the norm because of the need to re- technology. current with the
main reasons, I
For these would affirm the
order of the Board of Finance and Reve-
nue.
FIRETREE, LTD., Petitioner
DEPARTMENT OF GENERAL
SERVICES, Respondent. Pennsylvania.
Commonwealth Court of
Submitted on Sept. Briefs July
Decided