Twp. of Washington, Westmoreland County v. Twp. of Upper Burrell, Westmoreland County and Burrell SDTwp. of Washington, Westmoreland County v. Twp. of Upper Burrell, Westmoreland County and Burrell SD
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge1
OPINION BY JUDGE WOJCIK
FILED: April
This case of first impression concerns a uniquely situated commercial property that straddles the boundary between two municipalities, Washington Township and Upper Burrell Township, each of which claims a share of the annual local services tax of $52 paid by each of the 750 employees who work there. In this appeal, Washington Township contends that the Court of Common Pleas of Westmoreland County (trial court) erred and abused its discretion in its interpretation of the Local Tax Enabling Act (Act)2 and its unequal allocation
I. Background
Washington Township and Upper Burrell Township are contiguous townships of the second class located in Westmoreland County. Welsh Leedsworld is a manufacturing and office/call center located at 400 Hunt Valley Road, New Kensington, Pennsylvania, which employs approximately 750 people. The Welsh Leedsworld facility is located in both Washington and Upper Burrell Townships; the township line runs through the facility building.
Both townships impose a local services tax of $52 per year per employee as authorized by Section 301.1(f)(9) of the Act,
On April 29, 2014, Washington Township initiated this action by filing a complaint for declaratory judgment requesting the trial court to determine the parties’ respective rights to claim the local services tax on Welsh Leedsworld employees. Washington Township asserted that it was entitled to half the tax.
The trial court held an evidentiary hearing. The parties presented testimony and documentary evidence, including two exhibits depicting the location оf the boundary line between the two townships relating to the Welsh Leedsworld building. Reproduced Record (R.R.) at 244a, 273a. Robert Beckwith, Welsh Leedsworld‘s facility manager (Manager), testified that Welsh Leedsworld‘s main entrance, reception area, offices, human resources, conference rooms, elevators, restroom facilities, cafeteria and parking lot are located in Washington Township. The manufacturing facilities and mailroom are located in Upper Burrell Township. Manager further testified that, although its 750 еmployees move back and forth between the two townships frequently throughout the day, approximately 180 people are primarily employed in Washington Township and 570 are primarily employed in Upper Burrell Township. R.R. at 107a-120a.
In addition, the parties stipulated to the following. Both Washington Township and Upper Burrell Township lawfully impose the local services tax in the amount of $52 per employee. Burrell School District collects $5 per year per person from Upper Burrell Township; Kiski Area School District dоes not impose the $5 share. Both townships provide emergency service responses to the Welsh Leedsworld facility. Both townships have their own police departments, ambulance companies, fire departments, and both respond, depending upon who gets the call. Although the boundary line between Washington Township and Upper Burrell Township goes through the Welsh Leedsworld building, the exact location is not able to be determined. Upper Burrell Township acknowledged that Welsh Leedsworld employees
Washington Township argued that it was entitled to one-half of the local services tax for all employees who work at Welsh Leedsworld because the facility is fully integrated and located within both townships. Upper Burrell Township and the Burrell School District (collectively, Appellees) countered that the tax should be assessed and collectеd based upon the location within the facility where the employee actually performs the majority of his or her work. Significantly, Appellees conceded that 180 Welsh Leedsworld employees who primarily work in Washington Township should pay their local services tax to Washington Township.
The trial court examined Section 301.1(f)(9)(iv) of the Act in determining the priority of the claim. The trial court held that the local services tax applicable to those persons employed at Welsh Leedsworld facility at 400 Hunt Valley Road “shаll be determined based upon their specific place of employment, that is, the township and school district within which they are performing the functions of their employment on the first day that that person becomes subject to the tax for that payroll period.” Trial Court Opinion, 9/28/15, at 4 (emphasis added). Based on the evidence presented, the trial court determined that “570 persons performed the functions of their employment within that portion of the Welsh Leedsworld facility situated in Upper Burrell Township and the Burrell School District, and 180 persons performed the functions of their employment within that portion of the Welsh Leedsworld facility situated in Washington Township.” Id. at 4-5. Thus, the trial court held that Welsh Leedsworld must collect and remit taxes attributable to each person accordingly. The trial court treated the claim as arising on April 29, 2014, when Washington Township filed its petition. The trial court directed Appellees to remit all monies assessed and collected from April 29, 2014 to the present for those persons performing the functions of their employment in Washington Township. From this decision, Washington Township appealed.
II. Issues
In this appeal,3 Washington Township contends that the trial court acted in contravention of the plain language of the Section 301.1(f)(9) of the Act,
III. Contentions
Washington Township asserts that the trial court misinterpreted the Act by injecting
Appellees counter that the plain language of the Act is free of ambiguity. It requires that the local services tax be paid to the political subdivision where a person maintains his or her “principal office” or is “principally employed,” in other words, where the person spends the majority of his or her workday. Although employees can and do move through the building during the day, the Act determines the priority of which municipality gets the tax. The trial court‘s use of the word “specific” did not alter the Act. Appellees concede that Welsh Leedsworld employees who spend the majority of their workday in Washington Township should pay the tаx to Washington Township. Further, Appellees assert that a similar scenario was squarely addressed in Octorara Education Association v. West Fallowfield Township, 7 Pa. D. & C.4th 209 (C.P. Chester 1990). There, the court, applying a former version of the Act, held that the tax was limited to the township in which the taxpayer works. Appellees argue the same analysis applies here. For these reasons, Appellees maintain that the trial court‘s interpretation of the Act and allocation of the tax should be affirmed.
IV. Discussion
“[I]n statutory interpretation, our task is to discern the intent of the General Assembly, with the foremost indication bеing the statute‘s plain language.” Oliver v. City of Pittsburgh, 11 A.3d 960, 965 (Pa. 2011). Where the intent of the legislature is clear from the plain meaning of the statute, courts must not pursue statutory construction.
Where the words of a statute are not defined or not explicit, “we resort to considerations other than the plain language to discern legislative intent.” Commonwealth v. Kerstetter, 94 A.3d 991, 1001 (Pa. 2014). We may consider “the occasion and necessity for the statute; the circumstances under which the statute
We are mindful that when statutory construction is necessary, “the General Assembly does not intend an absurd result or one that is impossible of execution.” Board of Revision of Taxes, 4 A.3d at 622 (emphasis added). Moreover, courts “have no authority to add or insert language into a statute” and should not, through interрretation, add a requirement that the General Assembly did not include. Summit School, Inc. v. Department of Education, 108 A.3d 192, 199 (Pa. Cmwlth. 2015); see Vlasic Farms, Inc. v. Pennsylvania Labor Relations Board, 734 A.2d 487, 490 (Pa. Cmwlth. 1999). With these principles in mind, we examine Section 301.1(f) of the Act.
Section 301.1(f)(9)(iv), (vi) of the Act provides, in relevant part:
(f) Such local authorities shall not have authority by virtue of this act:
(9) To levy, assess or collect any tax on individuals for the privilege of engaging in an occupation except that such a tax, to be known as the local services tax, may be levied, assessed and collected only by the political subdivision of the taxpayer‘s place of еmployment. The following apply:
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(iv) With respect to a person subject to the local services tax at a combined rate exceeding ten dollars ($10), the situs of the tax shall be the place of employment on the first day the person becomes subject to the tax during each payroll period. . . . In the event a person is engaged in more than one occupation, that is, concurrent employment, or an occupation which requires the person working in more than one political subdivision during a payrоll period, the priority of claim to collect the local services tax shall be in the following order: first, the political subdivision in which a person maintains the person‘s principal office or is principally employed; second, the political subdivision in which the person resides and works, if the tax is levied by that political subdivision; and third, the political subdivision in which a person is employed and which imposes the tax nearest in miles to the person‘s home.
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(vi) The local services tax shall be no more than fifty-two dollars ($52) on each person for each calendar year, irrespective of the number of political subdivisions within which a person may be employed. A political subdivision shall provide a taxpayer a receipt of payment upon request by the taxpayer.
However, the Act does not define “place of employment.” The trial court determined that the “place of employment” was not “400 Hunt Valley Road” as a whole, but rather the location within the facility where the employee performs the majority of his оr her work on the first day that person becomes subject to the tax each payroll period. To assign each employee to
First, it is a canon of statutory construction that “a court has no power to insert a word into a statute if the legislature has failed to supply it.” Vlasic Farms, 734 A.2d at 490. The insertion of the word “specific” has resulted in an overly restrictive and narrow interpretation of an employee‘s “place of employment” to mean an employee‘s specific work station within an employer‘s premises, as opposed to the premises as a whole. Althоugh the trial court recognized that “[t]here are occasions during the work day in which persons employed there will go from one township to the other, in order to park their car or leave the premises from the parking lot, to have a meal or a snack in the cafeteria, to use the restroom facilities, or to attend to personnel matters . . ., [it found] the majority of a person‘s work day is spent within the area of the facility where they are assigned to work.” Trial Court Opinion at 3.
In other contexts where “placе of employment” is relevant, courts do not give a comparably narrow read to the concept. For example, in workers’ compensation, an employer‘s place of employment includes any area integral to the employer‘s business. ICT Group v. Workers’ Compensation Appeal Board (Churchray-Woytunick), 995 A.2d 927, 931 (Pa. Cmwlth. 2010) (parking lot held to be part of premises because it provides access to the workplace); see also, e.g., Allegheny Ludlum Corp. v. Workers’ Compensation Appeal Board (Hines), 913 A.2d 345 (Pa. Cmwlth. 2006) (public sidewalk аdjacent to plant gate deemed to be on employer‘s premises); Fashion Hosiery Shops v. Workmen‘s Compensation Appeal Board, 423 A.2d 792 (Pa. Cmwlth. 1980) (entranceway to lessor‘s building that was a means of ingress and egress to employer‘s shop).
Moreover, such a narrow reading of “place of employment” creates an exacting standard that is extraordinarily burdensome to apply. Under the trial court‘s construction, Welsh Leedsworld personnel office will have to pinpoint an employee‘s specific lоcation within the building, right down to a person‘s desk or work station, at the beginning of every payroll period. This exercise may be impossible in certain areas of the building where the boundary line agreed to by the parties appears to bisect employee work stations. See R.R. at 244a. The General Assembly could not have intended such an exacting and problematic standard. See Board of Revision of Taxes, 4 A.3d at 622.
In defense of the trial court‘s interpretation, Appellees rely on Octorara. Therein, the Chester County Court of Common Pleas confronted a similar issue. The schoоl district had four school buildings, three of which were in West Fallowfield Township and one that was in Highland Township. The school district‘s administrative offices were located in West Fallowfield Township, while the elementary school building where the teachers taught was located in Highland Township. Octorara, 7 Pa. D. & C.4th at 210. West Fallowfield Township attempted to impose its “occupational privilege tax”4 on the teachers
to the township in which the taxpayer works. Id. at 212. The Octorara court reasoned, “Section 6902(9) does not state that the situs of the tax is the location where the paychecks originate, but rather where the taxpayer is employed, i.e. where he or she works.” Id. (emphasis added). Thus, the court held that the teachers who worked in the Highland Township building were not subject to the West Fallowfield Township tax. Id.
Although we are not bound by the Octorara decision,6 it is readily distinguishable. In Octorara, the teachers and the administrative staff performed separate functions in separate buildings loсated in different townships. The school building where the teachers worked each day was located in a different township from the building where the administrative staff worked. The teachers did not work in both locations. According to the record, the teachers had few contacts with the administrative offices.
By contrast, the Welsh Leedsworld facility involves a single building that houses fully-integrated administrative and manufacturing divisions, where, on any given day, the employees move freely throughout the building and use space and resources in both townships. R.R. at 116a-17a. Therefore, Octorara is not persuasive.
Appellees also rely on the priority of claim language in Section 301.1(f)(9)(iv) to support the trial court‘s allocation of taxes based on where
employees are “principally employed.” Such reliance is misplaced.7 The priority of claim language applies to persons “engaged in more than one occupation” or “an occupation which requires the person working in more than one political subdivision during a payroll period.”
However, Welsh Leedsworld‘s employees are not working for more than one
Applying the foregoing analysis here, we conclude that the place of employment for Welsh Leedsworld is a single location -- 400 Hunt Valley Road. The place of employment must be treated as a whole, not a collection of individual
workstations within the facility. Such an interpretation is logical where, as here, the place of employment is an integrated facility in which each part of the facility supports and correspondingly depends on the other parts and employees move freely throughout the building and use space and resources in both townships. R.R. at 116a-17a. Considering the interdependence of all portions of the facility, employees work in both townships, not just the specific location where the employee is standing or sitting on the first day of the payroll period. Consequently, the “place of employment” encompasses the building, including cafeterias and conference rooms, the parking areas, and the land used in connection therewith. Treating the whole facility as the “place of employment” also comports with the purpose of the local services tax, which is to defray the cost of providing emergency and other municipal services. Indeed, the parties stipulated that both townships provide such services to Welsh Leedsworld.
The question remains as to what is the appropriate standard for tax allocation under the Act for integrated facilities that span more than one political subdivision. In other words, how should the local services tax be shared between them?
Washington Township argues that the taxes should be shared equally between the taxing authorities. Washington Township explains that, because the tax itself has been designated by each township for the provision оf emergency services, road construction and maintenance, reduction of real estate taxes and property relief through Homestead and Farmstead exclusions, those common purposes should require the equal sharing of the tax revenues.
However, an equal division allocation has no relation to the actual “place of employment.” Although the place of employment is located in two townships, the dividing line between Washington and Upper Burrell Township is not equal. See R.R. at 244a, 247a. Becausе the place of employment encompasses the whole facility, not just the building, the proper tax allocation must relate to the division between the townships.
The Welsh Leedsworld parcel is divided for real estate tax purposes. The dividing line is clearly shown on the recorded subdivision plan. R.R. at 99a; Original Record (O.R.), Trial Exhibits, Defendant‘s Exhibit A. Moreover, “[t]he specific boundary line between the townships herein has been established in previous litigation regarding real estate taxes, by the consent of the townships. In re: Welsh Leеdsworld PA, L.L.C., appeal filed by Township of Washington, Westmoreland County, Pennsylvania, tax map number 62-09-00-0-060 at No. 8789 of 2007.” Trial Court Opinion at 2. According to the order, 28 percent of the property of Welsh Leedsworld is located in Washington Township and 72 percent
Applying this formula here, Washington Township is entitled to taxes levied for 28 percent of the Welsh Leedsworld employees and Upper Burrell Township is entitled to taxes levied for 72 percent of the Welsh Leedsworld employeеs.
V. Conclusion
In sum, where, as here, an integrated facility straddles two (or more) townships, the proper allocation of local services taxes must reflect the division of property between (or among) them. Therefore, the proper assessment is based on the percentage of the property within a particular township. Such an allocation along boundary lines is not only consistent with the intent and purpose of the Act, but is a manageable standard that is inherently fair to both townships, which provide services to Welsh Leedsworld.
For these reasons, we reverse the order of the trial court and remand for an allocation of local services taxes between Washington Township and Upper Burrell Township based on the foregoing standard.
MICHAEL H. WOJCIK, Judge
ORDER
AND NOW, this 11th day of April, 2018, the order of the Court of Common Pleas of Westmoreland County (trial court), dated September 28, 2015, is REVERSED and this matter is REMANDED to the trial court for an allocation of local services taxes between Washington Township and Upper Burrell Township in accordance with the foregoing opinion.
Jurisdiction relinquished.
MICHAEL H. WOJCIK, Judge