The opinion
FLAHERTY, Justice,
dissenting.
I dissent from the majority Opinion, not because I disagree with its statement of the applicable principles of law, but because I disagree with the majority’s application of these principles to the facts of this case.
I agree, for example, that our standard of review for cases in which a classification has been challenged on an equal protection basis is articulated in Snider v. Thornburgh, 496 Pa. 159 , 436 A.2d 593 (1981), where this Court defined our inquiry as:
whether [the classification] is reasonable, not arbitrary, and rests upon a difference having a fair and substantial relation to the object of the legislation.
496 Pa. at 166-168 , 436 A.2d at 596-597 .
I also agree that there is a presumption of constitutionality of a classification, and that the taxpayer bears the *333 burden of demonstrating that the classification is unreasonable or that it is without fair and substantial relation to the object of the legislation.
I disagree, however, that the taxpayer in this case has not demonstrated the unreasonableness of the tax scheme. Dr. Buckley has established that New Jersey wage earners and self-employed persons who work in Pennsylvania are treated differently for Pennsylvania income tax purposes. He asserts that there is no valid reason for this difference in treatment and that there is no rational basis for the classification. Since there is no apparent significant tax difference between wage earners and self-employed persons, and because there is no apparent reason for classifying these persons differently, Dr. Buckley’s assertion that there is no justification for the distinction between wage earners and self-employed persons should be treated as demonstrating prima facie unreasonableness. To do otherwise would require Dr. Buckley to prove a negative: that no valid reason for the classification can exist. If that were required, his burden of demonstrating the unreasonableness of the governmental classification would become a virtual impossibility. See In re Appeal of Beaver Gasoline Company, 445 Pa. 571, 575 , 285 A.2d 501, 504 (1971).
I disagree, also, that the Commonwealth demonstrated that the classification is reasonable or that it has offered a reason for the treatment of the two types of taxpayers which has a fair and substantial relation to the object of the legislation. The majority suggests that the classification is justified by the fact that self-employed persons can locate where they wish, but wage earners cannot, and that the ease of administration of tax returns is facilitated by the classification.
To begin with, it could as easily be argued that individuals may work for wages where they choose as that individuals may be self-employed where they choose. If it is true that a sheet metal worker must go where there is sheet *334 metal work, it is also true that a doctor must go where there is a need for doctors. In the absence of evidence that doctors are as much needed in New Jersey as they are in Philadelphia, it is mere speculation on the majority’s part that Dr. Buckley was as free to set up a practice in one state as the other.
Secondly, it should never be the case that classifications may be promulgated by any governmental authority because of what the majority refers to as “ease of administration.” By that standard, equal protection of the laws would cease to exist, for it would surely be the case that any governmental classification would serve to make some bureaucratic function easier.
Thus, the majority has failed to establish that the classification is reasonable, for there is no significant difference between a person who pays taxes on wages and one who pays taxes on income from a business. The majority has also failed to establish that the classification rests upon a difference in the classes which has a fair and substantial relation to the object of the legislation. The only differences in the classes, according to the majority, is that one class pays installments on its Pennsylvania tax liability which are withheld by its employers, and the other pays its tax liability at the end of the year and bears the responsibility of paying its own taxes. Absent the reciprocal agreement with New Jersey, members of both classes would file Pennsylvania tax forms at the end of the year. Regardless of what the object of the legislation is, therefore, the majority must needs fail to establish the second prong of the test articulated in Snider v. Thornburgh, supra, (that the classification rests upon a difference having an important relationship to the object of the legislation) for there is no essential difference between the classes.
The Commonwealth’s case consists of a number of responses to the unreasonableness claim, which may be summarized as follows: (1) the agreement between the states fosters comity; (2) it creates an orderly, convenient and simple method of reporting and collecting taxes; (3) both states reconcile W-2 forms; (4) the agreement alleviates the *335 administrative burden on taxpayers living in one state and working in the other; (5) the agreement assists the states in enforcing withholding requirements against employers.
The flaw in these responses is that while the Commonwealth has given reasons for entering into the reciprocal agreement, not all of those reasons are relevant to the question of whether it is reasonable to exclude some classes of income earners and include others in a separate class subject to different tax burdens. Comity between the state (# 1), orderly operations (# 2), and easing the burdens on taxpayers (# 4), for example, have nothing to do with whether there is a reasonable distinction between the classes of self-employed and non self-employed which explains their difference in treatment. Such concerns may have to do with whether it is desirable for the Commonwealth to have a reciprocal income tax agreement with New Jersey, but they have nothing to do with whether there are differences between the groups of taxpayers which justify the difference in tax treatment.
The only reasons offered which might be relevant to the issue of whether the classification is reasonable and whether differences in the classes are significantly related to the object of the legislation are (#3), the reconciling of W-2 forms, and (# 5) the enforcement of W-2 reporting requirements against employers.
Even reasons (# 3) and (# 5) are not, however, self-evidently valid justifications of differential treatment. The argument that employees and employers utilize W-2 forms which can be reconciled and which can be used to enforce reporting requirements is, without more, not an argument at all, but merely a description of the fact that W-2 forms are utilized for one group of persons and not for another. Without explanation, we have no idea of the significance of the fact that one group of taxpayers files W-2 forms and the other does not: this fact may be of extreme importance, of some importance, or of no importance at all for Commonwealth enforcement efforts. We are not told how reconciliation works or how W-2 forms enhance enforcement or reporting requirements.
*336 In essence, the Commonwealth has described one feature which distinguishes the two classes, but it has not explained why this distinguishing feature justifies different treatment. Thus, since the Commonwealth has failed to rebut the prima facie unreasonableness of the classification, and since even the majority has failed to offer reasons which justify the different tax treatment of individual taxpayers, the classification should not withstand constitutional challenge.
For these reasons, I would hold that the Reciprocal Personal Income Tax agreement between the Commonwealth of Pennsylvania and the State of New Jersey is constitutionally infirm in that it contains a classification which violates both the Fourteenth Amendment of the United States Constitution and the Uniformity Clause of the Pennsylvania Constitution. *
PAPADAKOS, J., joins in this Dissenting Opinion.
I would not hold that any provision of the Tax Reform Code of 1971 is unconstitutional. To the contrary, Section 7356(b) of the Code, which authorizes reciprocal personal income tax agreements, also contains broad language authorizing “all other matters relating to cooperation between the states." I would conclude, therefore, that even though Section 7356 specifically authorizes the exemption of compensation from Pennsylvania income tax, its terms are broad enough to include, as well, an exemption for net profits.