Appendix — Grant-Oliver Corp. v. Moon Area School District

APPENDIX

Appendix A

JAMEs E. Tricco, JAMEs A. Drvis, et al.,

Appellees,

V.

Moon AREA SCHOOL DISTRICT,

Appellant

Supreme Court of Pennsylvania.

Before ROBERTs, Nix, LARSEN, MCDERMOTT and

HUTCHINSON, JJ.

Opinion

N, Justice.

The Moon Area School District (District) imposed a

local tax on paid parking in the district. In this consoli-

dated appeal', we are asked to consider whether 1)

appellees have standing to prosecute the actions, 2) the

tax violates the Commerce and Due Process Clauses of

the United States Constitution and 3) such a tax is autho-

rized under the Local Tax Enabling Act, Act No. 511 of

1965, as amended, 53 P.S. §6901 et seq. (the Act).

I.

On March 26, 1979 Moon Area School District pur-

suant to the Act enacted Resolution 79-2 which sets out

a parking tax upon parking in all non-residential parking

1. Jurisdiction to hear this ap is conferred upon

this Court by the Act of 1976, July 9, P.L. 586, No. 142,

§2, as amended, 42 Pa.C.S.A. §724.

2a Appendix A.

facilities located within the district for the purpose of

raising revenues for the operation of the schools in the

district. The resolution requires patrons to pay a tax at

the rate of 15% of the consideration for each parking

transaction. Operators of non-residential parking places

are required to obtain a registration certificate at an

annual cost of Ten ($10.00) Dollars, to collect the parking

tax from patrons, keep chronological records of all

transactions, and file monthly returns with the tax col-

lector. Any operator’s failure to comply with certain con-

ditions subjects the operator to a monetary penalty that

may equal 100% of the proper tax as well as penalty and

interest. Criminal sanctions not to exceed $500.00, or

upon default, imprisonment of less than thirty days are

also provided.“

2. The relevant sections of Resolution 79-2, Parking

be = Resolution, of the Moon Area School District pro-

e:

SECTION 3. IMPOSITION AND PAYMENT OF

TAX: For the period of April 25, 1979 to June 30,

1979, and thereafter on the fiscal year basis of from

each July 1 to each following June 30, a tax for

general revenue purposes is hereby levied upon each

and 2 patron for each and — | . transac-

tion at the rate of 15 per centum (15%) on the con-

sideration thereof. Every operator with each trans-

charged and shall obtain payment of said tax from

an payment o tax from

the patron as a condition for the allowance of the

or storing, and the fact of such allowance

shall, and the fact of collection of the consideration

shall conclusively presume the collection of the tax.

SECTION 4. PARKING REGISTRATION CER-

TIFICATES:

(a) On or after the effective date of this Resolu-

tion, it shall be unlawful for any person and/or —

operator to conduct, continue to conduct, or the

ter begin to conduct any parking transaction with

Appendix A. 3a

reference to a pea pane ee within

the School District until or unless a Parking Regis-

tration Certificate or Certificates shall have been

issued to said operator, and unless the tax im

hereunder is accounted for in accordance with the

provisions of this Resolution.

(b) Every person and/or operator desiring to

continue to conduct or to begin to conduct any park-

ing transaction, with reference to a non-residential

par place within the School District shall file

annually an application for Par tion

Certificate or Certificates for each par with

the Collector. Every application for such Certificate

or Certificates 8 be made upon a form a

and furnished by the Collector, and autho by the

Board of School Directors cf the School District.

Such application shall set forth the name under

which the applicant conducts such — en —

tions, the location of the place of said par place,

the size and vehicle — 4 of said parking 2

and other such 1 — ormation as may be re-

quired by the Collector. If the applicant has or in-

tends to have more than one place of such parking

within the School District, the applicant shall state

the required information with respect to each and

every such place of parking. If the applicant is other

than an individual, the names and addresses of the

—— — officers thereof, and any other reasonable

ormation — by the Collector, shall be stated

in the application. The application shall be signed

and sworn to by the applicant. The Collector may

1— the application be verified by oath or

on.

(e) Upon a proper application being made, the

Collector shall charge a registration and certificate

fee of Ten Dollars ($10.00) annually for each certifi-

cate which shall be paid by the applicant and the

Collector shall grant and issue to such applicant a

Parking tion Certificate for each place of

non-residential parking as set forth in the applica-

tion. A Registration Certificate shall not be

assignable an be valid only for the person

4a Appendix A.

and/or operator in whose name it is issued, and it

shall be valid only for the conducting of non-

residential parking at the place designated therein.

Said Parking Registration Certificate shall at all

times be conspicuously displayed at the place for

which issued.

(d) The Collector may suspend, or after hearing,

revoke a — ee Certificate whenever

the Collector finds that the holder thereof has failed

8 comply — 4 any — „ of — wm

n suspen or revoking any tra-

tion Certificate, the Collector shall uest the

holder thereof to surrender immediately all Par

Registration Certificates and duplicates thereof.

Whenever the Collector suspends a Parking :

tration Certificate, he shall notify the holder thereof

immediately of such action and shall afford the

holder a hearing, if one is desired and has not al-

ready been afforded. After such hearing, the Collec-

tor may either rescind his order of suspension, con-

tinue said suspension, or revoke the Registration

Certificate or Certificates.

SECTION 5. RECORDS:

(a) Each operator shall maintain, en |

with respect to each king place, complete and

accurate records of transactions, of the total

amount of consideration received from all transac-

tions, and the total amount of tax collected on the

basis of such consideration, and the same shall be

done on a uniform daily basis. Each operator shall

issue to the person paying the consideration such

written evidence of the transaction as the Collector

may prescribe by regulations.

(b) As to all transactions otherwise than on a

unit per occurrence basis, the Operator shall make,

have and keep ted records of all such transac-

tions, or if oral, then to do so by a record of relevant

data as adequately describes each such transaction

for calculation of the proper tax. Records shall be

made at the time of the transactions. They shall be

kept in chronological order.

Appendix A.

Bis

11151

e

-~ Bay hh

his intentional failure of consid-

voluntary surr-ader of euvzu

SECTION 6

ator in co

so as the

the

on the

th him

on all

geal y to

pay

82

the full tax

1 1—

2%) thereof as com

8 .

258

Hue n

— U

6a Appendix A.

There are presently six non-residential parking oper-

ations which provide an approxiuiate aggregate of six

thousand one hundred fifth (6,150) parking spaces. A

substantial number of these spaces are used by persons

utilizing the Greater Pittsburgh International Airport as

all of the parking lots are closely situate in the locale of

be to the Collector. Any Operator who fails to

ea propet report as due who fails to make

— to liabilities under Section 50d) and

SECTION 9. PENALTIES: Any person who vio-

inten eng peovieten of thio Messtatien, or ang sequie-

oe 14— 41 conviction

thereof before any for a fine not

to exceed more than ve Hundred Dollar ($500 00),

or, in default thereof shall be for a period

addition to all other liabilities oth-

a under any other of the provisions

hereof, shall be in tion to any other liability

that may be under any other provisions of

law, ci ty, and criminal

3. The 11. one cae

concessionaire-Gran

Appendix A. Ta

Challengers to the tax are residents of the school

district, non-residents of the district, two airlines that

service the airport and have an interest in the parking lot

at the airport, operators of several of the lots, and the

owner/lessors of the realty on which the parking

concessions operate. These challengers filed appeals

from the tax levy on April 6, 1979. On the same day, by

order of then Judge John Fiahe:ty, the appeals acted as

a supersedeas until hearing which was held May 7, 1979.*

The lower court declared the tax unconstitutional. The

Commonwealth Court affirmed the lower court. The

District petitioned for allowance of appeal from the deci-

sion of the Commonwealth Court in both cases to this

Court. The petitions were granted and the appeals con-

solidated.

Appellant raised the questions of appellees standing

to attack the validity of the tax through preliminary

objections which were denied below. The essence of ap-

pellant’s standing argument on appeal is that appellees

did not ze specifically that they were “taxpayers” and

“aggrieved parties,” the standing requirements of the

Act,“ and that being subjected to the tax if appellees

choose to park in one of the non-residential parking

facilities is insufficient as a matter of law to establish

standing. We find the arguments unpersuasive.

4 agreement of the parties, to the

ont Soa ot See or a bond

were withdrawn for a perio extending until thirty (30)

days after the trial court’s decision on the merits. The

with tae bond question have been

before this Cou t. 2

5. 53 P. S. 56906 prov des in pertinent part: 56906.

Appeals by taxpayers.

rr

vision to which this applies shall go effect until

8a Appendix A.

The argument that appellees have not specifi-

in enacting Section 6 of the Act.“ Further, such formal-

ism is “a reversion to seventeenth century pleading“

contra the modern trend. See, e.g., Lutz Print. v. Com.

Dept. of Property, 472 Pa. 28, 370 A.2d 1210 (1977);

William Penn Parking Garage, Inc. v. City of Pittsburgh,

464 Pa. 168, 169, 346 A.2d 269 (1975) (plurality opinion);

Pa.R.Civ.P. 126; Rosden v. Leuthold, 274 F.2d 747, 750

(D.C. Cir. 1960) (purpose of Rules 15(b) and 54(c), Fed.R.

Civ.P. is “to avoid the tyranny of formalism”). The em-

ployment or lack of employment of the terms “taxpayer”

and “aggrieved” is not decisive. Rather, the question is

thirty days from the time of the of the ordi-

— Sed ution — — — y-

1 twenty-five or more

of the .

vision as assessed for taxation or of

fect and for payment of costs. shall set

forth the to the tax and the facts in support of

such ob and shall be accom by the affida-

Appendix A. 9a

whether facts have been alleged which support the legal

conclusion that they are taxpayers who are aggrieved.

An examination of the record including the

pleadings indicate appellees are liable to pay or collect

the tax and are, thus, aggrieved taxpayers.* The argu-

ment raising the insufficiency of the assertion that they

are subjected to the tax if they elect to use the facilities

attempts to interject a voluntary aspect into the inquiry.

If such a concept were adopted in determining standing

to object, it would effectively preclude objection to all

sales and use taxes because the operating incidents of

such taxes are voluntary.

As a corollary to this voluntary argument, ap-

pellants have also implicitly suggested that the

appellees’ challenge is premature. The argument of pre-

maturity is particularly inappropriate in this case since

under Section 6 of the Act, challenges to a tax imposed

pursuant to the Act must be filed within the thirty (30)

days following the adoption of the taxing ordinance or

resolution, which thirty (30) days are a mandatory wait-

ing period for the taxing authority. In other words, tax-

ing authorities, when levying a tax for the first time,

Is not insistence on such empty formalism a rever-

sion to seventeenth — my | p which required

talismanic phrases, as for instance that a seller could

not be held to warrant that he sold what he pur-

ported to sell unless the buyer pleaded

warrantizando vendidit or barganizasset?

8. Allegheny Airlines (USAIR) and Trans-World

Airlines are neither potential patrons nor operators of

the non-residential lots. However, we need not

reach the on of their standing. If the re

number more than — pay (25) have

— , the appeal cannot be on the ground

10a Appendix A.

must allow thirty (30) days for taxpayer appeals to be

filed by prescribing an effective date at least thirty (30)

days from the time of adoption of the taxing ordinance or

resolution. If appellants were to succeed in their conten-

tion of prematurity, appeals not premature would be too

late and no patron would be able to challenge the tax. All

patrons able to file timely appeals from the tax are poten-

tial patrons. To hold that such persons do not have

standing, which is absurd, contravenes the presumption

“that the General Assembly does not intend a result that

is absurd...or unreasonable.” Statutory Construction

Act, Act of December 6, 1972, P.L. 1339, No. 290, 1

Pa.C.S.A. §1922.

So, too, the tax-collection liability of the operators

confers standing upon appellee/operators. See, e.g., Na-

tional Geographic Society v. California Board of Equali-

zation, 430 U.S. 551, 97 S.Ct. 1386, 51 L.Ed.2d 631 (1977)

(sole challenger of tax had only use-tax-collection liabil-

ity and standing was assumed); Wm. Penn Park., Inc. v.

City of Pitts., supra, (plurality opinion, no dissents) (tax

collection liability of parking operators sufficient for

standing). The owner/lessors are persons subjected to

the taxing resolution as are the resident and non-

resident appellees, and thus, have standing.

II.

Appellees contend that that the tax violates the

Commerce Clause“ of the Constitution of the United

9. The Congress shall have Power

To regulate Commerce with foreign Nations, and

among the several States and with the Indian Tribes

Vs. const., Art I, 68, cl. 3.

Appendix A. lla

States. It is argued that the tax imposes an impermissi-

ble burden upon interstate commerce.

The threshold question is whether the courts need

review this local state tax under the “negative implica-

tions” of the Commerce Clause. Judicial review of such

taxes under the Commerce Clause is intended

...to ensure that States do not disrupt or burden

interstate commerce when Congress’ power remains

unexercised: it protects the free flow of commerce,

and thereby safeguards Congress’ latent power from

encroachment by the several States.

Merrion u Jicarilla Apache Tribe, IU

— 102 S. Ct. 894, 910] 71 L.Ed.2d 21, 40 (Slip opin-

ion, filed January 25, 1982).

And “{cjourts are final arbiters under the Commerce

Clause only when Congress has not acted.” Merrion u

Jicarilla Apache Tribe, supra, US. at , 102

S.Ct. at 910, 71 L.Ed.2d at 40. See, e.g., Japan Line, Ltd.

v. County of Los Angeles, 441 U.S. 434, 454, 99 S.Ct. 1813,

1824, 60 L.Ed2d 336 (1979); Prudential Ins. Co. v. Benja-

min, 328 U.S. 408, 421-427, 66 S.Ct. 1142, 1150-53, 90

L.Ed 1342 (1946).

In this case, Congress has acted affirmatively when it

expressly prohibited head taxes on persons traveling in

air commerce and expressly permitted “sales or use

taxes on the sale of goods or services.” Pub. L. 85-726,

Title XI, §1113, as added Pub.L. 93-44, §7(a), June 18,

1973, 87 Stat. 90, 49 U.S.C.A. §1513.'°

10. 1513. State taxation of air commerce

Prohibition; exemption

(a) No state (or political subdivision thereof,

uding the Commonwealth of Puerto Rico, the

12a

Appendix A.

V Islands, Guam, the District of Columbia, the

territories or Bye mange of the United States or

political agencies of two or more States) shall levy or

collect a tax, fee, head charge, or other charge, di-

rectly or indirectly, on persons traveling in air com-

merce or on the — of persons traveling in air

commerce or on the sale of air transportation oi on

the gross receipts derived therefrom; 1 that any

State (or political subdivision thereof, including the

Commonwealth of Puerto Rico, the Virgin Islands,

Guam, the District of Columbia, the territories or

possessions of the United States or political agencies

of two or more States) which levied a tax, fee, head

charge, or other charge, directly or indirectly, on

persons trave in air commerce or on the carriage

of persons trave in air commerce or on the sale of

air transportation or on the receipts derived

therefrom prior to May 21, 1970, shall exempt

— 2 — of this subsection until Decem-

r 31, .

Permissible State taxes and fees

(b) No in this section shall prohibit a State

(or political subdivision thereof, including the Com-

monwealth of Puerto Rico, the Virgin Islands, Guam,

the District of Columbia, the territories or

possessions of the United States or political agencies

of two or more States) from the levy or collection of

taxes other than those enumerated in subsection (a)

of this section, including property taxes, net income

taxes, franchise taxes, and sales or use taxes on the

sale of goods or services; and nothing in this section

shall prohibit a State (or political subdivision

thereof, inclu the Commonwealth of Puerto

Rico, the Virgin ds, Guam, the District of Co-

lumbia, the territories or possessions of the United

States or political agencies of two or more States)

— or — + 2 t le or =

ecting reasonable ren , landing fees, an

other service from aircraft operators for the

use of airport facilities.

Appendix A. 13a

If the tax here is a head tax, we need not look fur-

ther for Congress has spoken. Allegheny Airlines, Inc. u

City of Philadelphia, 453 Pa. 181, 309 A.2d 157 (1973).

Although appellees have argued that the tax in question

here is a head tax, that position is clearly untenable. A

head tax is a tax reckoned at a fixed amount for each

head (person) in a designated class.“ The tax here is not

on the heads of “persons traveling in air commerce or on

the carriage of persons traveling in air commerce.” The

operating incidence of the tax is the transaction of park

ing in non-residential parking lots (which are located at

or near an airport). The tax is to be borne by the patrons

of the non-residential parking operations. The measure

of the tax is the consideration paid for the parking

transaction. It is collected by the operator of the parking

facility. It is not a tax on the right to travel and clearly

Congress has not prohibited such a tax under 49 U.S. C. A.

§1513.

But the permissability of sales or use taxes on the

sale of goods or services in air commerce is not a con-

gressional ratification of the specific tax in question here.

Thus, judicial scrutiny of whether this tax violates the

“negative implications” of the Commerce Clause is war-

ranted.

We do not look to whether the tax attaches only

to a “local” or intrastate activity to determine whether

the tax is immune from Commerce Clause scrutiny. See

Hunt v. Washington Apple Advertising Comm’n, 432

US. 333, 350, 97 S. Ct. 2434, 2445, 53 L.Ed.2d 383 (1977);

11. Black’s Law Dictionary (5th ed. 1979), p. 648,

defines “head money” as “a sum of money reckoned at a

fixed amount for each head (person) in a designated

class. Particularly (1) a capitation or poll tax.”

l4a Appendia A.

Pike u Bruce Church, Inc., 397 U.S. 137, 141-142, 90 S.Ct.

844, 846-47, 25 L.Ed.2d 174 (1970); Nippert u City of

Richmond, 327 U.S. 416, 423-424, 66 S.C:. 586, 589-90, 90

L.Ed. 760 (1946). In reviewing a Commerce Clause chal-

lenge to this local tax, we focus upon “the practival effect

of [the] challenged tax,” Commonwealti: Edison Co. u

Montana, 453 U.S. 609, 101 S.Ct. 2946, 6% L.Ed.2d 884

(1981); Mobil Oil Corp. v. Commissioner of Taxes, 445

U.S. 425, 443, 100 S.Ct. 1223, 1234, 63 L.Ed.2d 510 (1980),

to determine whether the tax substantially affects or is

connected with interstate commerce.

Interstate commerce is not immune from state taxa-

tion. 12 To restate, the Supreme Court “has rejected the

notion that state taxes levied on interstate commerce are

per se invalid.” Commonwealth Edison Co. v. Montana,

supra, 453 U.S. at 615, 101 S.Ct. at 2952 citing, Washing-

ton Revenue Dept. v. Association of Wash. Stevedoring

Co., 435 U.S. 734, 98 S.Ct. 1388, 55 L.Ed. 2d 682 (1978);

and Complete Auto Transit v. Brady, 430 U.S. 274, 97

S.Ct. 1076, 51 L.Ed.2d 326 (1977). Yet, not all state taxa-

tion of interstate commerce is valid. It will be sustained,

however, if it passes scrutiny under the four part test

articulated in Complete Auto Transit v. Brady, supra.

That test says a state tax does not offend the Commerce

Clause if it “is applied to an activity with a substantial

nexus with the taxing state, is fairly apportioned, does

not discriminate against interstate commerce, and is

fairly related to services provided by the state.” 430 U.S.

at 279, 97 S.Ct. at 1079.

12. “Even interstate business must pay its way.”

Western Live Stock Bureau v. Bureau of Revenue,

Postal Tel h-Cable Co. v. Richmond, 249 U.S. 252,

259, 39 S.Ct. 266, 63 L.Ed. 590 (1919).

Appendix A. | 15a

Appellant posits that the tax is purely local in nature

because the act of parking a car occurs prior to any

interstate commerce. As previously stated, the local na-

ture of the activity does not prevent Commerce Clause

scrutiny. Because of the geographical location of the

parking lots, at or near the airport, the commerce of the

airport would be substantially impeded without the park-

ing operations. There is a near interlocking relationship

between the airport, the airline/appellees and the largest

parking lot operator—Grant-Oliver Corporation. The re-

cord here indicates that the vast majority of patrons of

the parking lots are traveling in air commerce. During

1977, 88.5 percent of the passengers flying to and from

the airport flew to or from a point outside the Common-

wealth of Pennsylvania. The remaining 11.5 percent of

the passengers were intrastate passengers. The conclu-

sion that the parking activity is a part of the flow of or

connected with interstate commerce is inescapable.

Turning to the four-part test of Complete Auto Tran-

sit u Brady, supra, we find no serious challenge by

appellees to the first three prongs of the text. The only

nexus of the activity or incidence of patrons’ parking is

within the District. There is no problem of apportion-

ment or multiple taxation on the subject of the tax. Since

patrons’ parking at a non-residential parking lot in Moon

Area School District is the legal incidence or subject of

the tax, and it can occur in no other place, no other

locality or state can tax the patrons’ parking. The Moon

Area Township’s gross receipts parking tax is on the

incidence of doing business measured by gross receipts,

Mellon Square Garage, Inc. v. Public Parking Authority

of Pittsburgh, 442 Pa. 229, 275 A.2d 654 (1941) and can-

not support a claim of multiple taxation.

18a Appendix A.

The claim that the tax discriminates against inter-

state commerce because the patrons bearing the tax are

largely engaged in interstate commerce does not with-

stand examination. A similar argument in Heisler u

Thomas Colliery Co., 260 U.S. 245, 251-253, 43 S.Ct. 83,

84, 67 L.Ed. 237 (1922) to the effect that Pennsylvania

had “a virtual monopoly of anthracite coal and that,

because 80% of the coal was shipped out of state, the tax

discriminated against and impermissibly burdened inter-

state commerce. [was dismissed] as ‘adventitious con-

siderations. Commonwealth Edison Co. u Montana,

supra, 453 U.S. at 618, 101 S. Ct. at 2954. The tax burden

in this case is borne according to the extent of use of the

parking facilities and not on a distinction between

patrons using interstate air commerce and patrons en-

gaged in intrastate air commerce or local commerce.

The serious challenge to the tax is under the

“fairly related” prong of the Complete Auto Transit test.

It is repeatediy urged, and the lower court found, that

there were no benefits afforded the patrons of the park-

ing facilities by the District. The type of benefits found to

be non-existent can be characterized as particular bene-

fits afforded the patrons directly.'* This is not the benefit

or service requirement of the fourth prong of the Com-

plete Auto Transit test. Under the fourth prong “ ‘the

measure of the tax [must be] reasonably related to the

taxpayers activities or presence in the state—from which

it derives some benefit such as the substantial privilege

of [the operating incidence the taxpayer will realize, in

proportion to the taxes it pays, [t]he only benefit to

13. It was uncontroverted that the public may use

the recreational facilities of the school district. The court

WWW

Appendix A. 17a

which it is constitutionally entitled. ] that derived

from his enjoyment of the privileges of living in an or-

ganized society, established and safeguarded by the devo-

tion of taxes to public purposes (citations omitted).’”

Commonwealth Edison Co. u Montana, supra, 453 U.S.

at 628-29, 101 S.Ct. at 2960. Public education is a benefit

of an organized society.

Nor is this a case such as Nippert v. City of Rich-

mond, supra, which involved a local license and gross

receipts tax to be born by interstate, itinerant drummers

or salespersons whose activity of selling—the operating

incidence of the tax—was not so regular, continuous or

persistent in the taxing district as to constitute a “course

of business.”

The measure of the Moon Area School District tax is

related to the taxpayers presence or activities in the

district. The tax is assessed under a formula which re-

lates the tax liability to the value of the patrons’ parking

within the district. Therefore, under Commonwealth

Edison Co. v. Montana, supra, the fourth prong of the

Complete Auto Transit test is met. We are satisfied that

the Moon Area School District tax comports with the

four requirements of the Complete Auto Transit test. We

now turn to the Due Process Clause challenge to the

parking tax.

III

Appellees vigorously argue again, as a corollary

to the Commerce Clause argument, that the District pro-

vides no benefits“ in exchange for the tax, and as such

violates the Due Process Clause of the Constitution of

the United States. U.S. Const. amend. XIV, §1. A state’s

taxing power is subject to the constitutional restraints of

the Fourteenth Amendment to the Constitution of the

United States. And the test for determining whether

18a Appendiz A.

property has been taken without due process of law is:

... whether the taxing power exerted by the state

bears fiscal relation to protection, opportunities and

benefits given by the state. The simple but control-

ling question is whether the state has given any-

thing for which it can ask return.” [Emphasis added.]

Wisconsin v. J. C. Penney, 311 U.S. 435, 444, 61 S.Ct.

246, 249, 85 L.Ed. 267 (1940).**

Three years before Wisconsin v. J. C. Penney, supra,

in Carmichael u Southern Coal & Coke Co., 301 U.S. 495,

522, 57 S. Ct. 868, 878, 81 L.Ed. 1245 (1937) where in-

fringement of the Due Process and Equal Protection

Clauses of the Fourteenth Amendment by the Unem-

ployment Compensation Act of Alabama was at issue the

Supreme Court made quite clear that:

Atſhe only benefit to which the taxpayer is consti-

tutionally entitled is that derived from his enjoy-

ment of the privileges of living in an organized soci-

ety, established and safeguarded by the devotion of

taxes to public purposes. 301 U.S. at 522, 57 S.Ct. at

87815

14. In Wisconsin u J. C. Penney, 311 U.S. 435, 61

S. Ct. 246, 85 L.Ed. 267 (1940) the Supreme Court upheld

the validity of a state tax on the privilege of d

and recei dividends out of income derived from pro

erty located and business transacted in the state, in the

face of a Fourteenth Amendment challenge.

15. The fourth prong of the four test of Com-

lete Auto Transit v. Brady, 430 U.S. 274, 97 S.Ct. 1076,

1 L.Ed.2d 326 (1977), for erce Clause scrutiny of

state taxes, as refined in Commonwealth Edison Co. v.

Montana, 453 U.S. 609, 101 S.Ct. 2946, 69 L.Ed.2d 884

(1981) is derivative of Carmichael v. Southern Coal &

Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245 (1937),

Appendix A. 19a

In this case, the lower court and the Commonwealth

Court found that there was no benefit afforded appellees.

We do not agree. The question in the framework of this

case is almost frivolous. The district provides public ed-

ucation for the children residing in the district. It bor-

ders on the trite but we note again that public education

is an advantage of a civilized society. A corporation can-

not object to paying school taxes. Thomas v. Gay, 169

U.S. 264, 280, 18 S.Ct. 340, 346, 42 L.Ed. 740 (1897). A

taxpayer may not successfully object, on the ground of

the “benefit” theory, to taxation for a general public use

which includes taxes for schools. Kelly v. City of Pitts-

burgh, 104 U.S. 78, 26 L.Ed, 658 (1881). Appellees’ ar-

gument is basically what this Court rejected in Kelly u

City of Pittsburgh, 85 Pa. 170, 179 (1877) when it stated:

Now it may be true that the plaintiff is not per-

sonally benefited by either the educational or poor

department of the city; but neither is any one not

having children to educate, and not being himself a

pauper. Yet, for such reason we are hardly prepared

to stop the hand of the collector of school and poor

rates. He may not be personally benefited by the fire

and police department; but the general municipality

is largely benefited thereby, and his welfare is found

in the prosperity of that municipality. [Emphasis

S.Ct —

224 40 (1964) ),and National Geographic. Sock

6

Co. v. Montana, supra, 453 U.S. at 625 n. 14, 18, 101 S. Ct.

at 2958 n. 14, 18.

Wisconsin n J. C Rig By on rc te Patt Motors

20a Appendix A.

The activity of parking within the school district in

order to have easy access to the airport, as well as the

availability to the public of the school district’s recrea-

tional facilities are more than sufficient personal benefits

which concretize the necessary general benefit of partici-

pating in an orderly and civilized society.

We see no reason to depart from these sound princi-

ples and thus find the tax does not offend the Due Proc-

ess Clause of the Fourteenth Amendment to the United

States Constitution.

IV.

Appellees argue, and the lower court agreed, that the

taxed transaction at the valet parking lots is a “retail

sale” of a valet parking service which involves the trans-

fer of possession of tangible personal property. It is

urged that the amount of the tax exceeds the limit set by

Section 8(4) of the Act, 53 P.S. 569084). “ Appellees rely

upon Taylor v. Philadelphia Parking Authority, 398 Pa.

9, 156 A.2d 525 (1959) and Mellon Square Garage, Inc. u

Public Parking Authority of Pittsburgh, 442 Pa. 229, 275

A.2d 654 (1971) as authority for their position. Their

reliance is misplaced.

In attempting to apply Section 8(4) of the Act to the

valet parking transactions primary emphasis has been

16. 53 P.S.A. 56908. Limitations on rates of specific

taxes

panty I ree - +44 -

fe -I ILIE

this section:

>

(4) On retail sales involving the transfer of title

or possession of tangible personal property, two per

cent.

Appendix A. 21a

given improperly by appellees to the transference of

possession of the vehicles. In order to show transference

of possession or a bailment, Taylor v. Philadelphia Park-

ing Authority, supra, is cited. That case held that when

the owner of an automobile parked on a commercial

parking lot retains control of that vehicle by keeping the

keys to it, the nature of the arrangement between the

proprietor of the lot and the car owner is one of a lease of

parking privileges. The nature of the legal relationship

was defined for the purpose of determining who assumes

the risk of loss when a theft of contents of the parked

automobile occurs. Mr. Justice McBride, speaking for the

Court, commented, “The characterization of the relation-

ship as a bailment or a lease...is based solely on

whether the alleged bailor delivered the custody and

control of the item to the bailee.” 398 Pa. at 12, 156 A.2d

at 527. But the categorization of the transaction as a

bailment, and thus a transference of possession of prop-

erty, does not aid in analysis here. The emphasis in Sec-

tion 8(4) is upon “retail sale” primarily, and upon the

22a Appendix A.

nition C a sales tax: a tax imposed upon a transaction

whereby property is acquired. Mellon Sq. G. Inc. v. Pub.

P. Auth. of Pitts., supra; Blauner s, Inc. u Philadelphia,

330 Pa. 340, 198 A. 889, 892 (1938). Neither in our defini-

tion of a sales tax nor under Section 8(4) was the acquisi-

tion or possession of property intended to be a temporary

one for the benefit of another. Further examination of

the secondary consideration of transfer of possession is

unnecessary. We hold there has been no sale when a valet

parking transaction occurs.

Seeking further support of their proposition that the

transaction is a sale, appellees cite dicta in Mellon Sq. G.

Inc. u Public P. Auth. of Pitts., supra.** The gratuitous

statement in Mellon is not operative in this analysis and

the advancement of it is a profound disservice to the

fundamental soundness of the holding in that case.

When the patrons of valet parking pay the parking

operators, they pay, not for the acquisition of property,

but for the use of the parking lot and the valet service.

Possession of the vehicle is temporarily transferred to

the operator of the lot for the patrons benefit and is

returned. This is not a “retail sale.” The court below was

in error in concluding that the tax upon valet parking

transactions was controlled by Section 8(4) of the Act

such ob and either to redeliver the

yy ot ot trast

formity with the purpose of the trust.

Black’s Law Dictionary (5th ed. 1979) p. 129.

18. “If Mellon Square Garage were a collector

II- Se ee Se ee the tax

was a sales tax] be persuasive.”

442 Pa. at 233, 275 A.2d at 657.

Appendix A. 23a

and the rate of the tax on valet parking need not be

reduced to 2%.

A close reading of the record reveals that the agree-

ment entered into by the District regarding no require-

ment of the posting of a bond by appellees pending ap-

peal was operative for only thirty (30) days after the trial

court’s decision on the merits. Therefore, appeilant is not

prevented from raising the issue. However, the require-

ments of Section 6 of the Act, 53 P.S. 30906 provide for

the posting of security in the amount of five hundred

dollars ($500.00). A bond in this amount was posted by

appellees. Additional security was not necessary as the

tax moneys have been collected from the patrons and

placed in escrow by the parking lot operators. (R. 449a).

Accordingly, the order of the Commonwealth Court

affirming the order of the Court of Common Pleas of

Allegheny County is reversed and the objections to the

tax are dismissed.

ROBERTs and McDermott, JJ., concurred in the re-

sult.

FLAHERTY, J., did not participate in the consideration

or decision of this case.

24a Appendiz B.

Appendix B

JAMEs E. TRICCO et al.

V.

Moon AREA SCHOOL DISTRICT

Appeal of Moon AREA SCHOOL

DISTRICT. APPELLANT.

COMMONWEALTH COURT OF PENNSYLVANIA.

Argued Nov. 18, 1980.

Decided April 30, 1981.

Before CRUMLISH, President Judge, and WILKINSON,

ROGERS, BLATT, CRAIG, WILLIAMS and PALLADINO, JJ.

WILLIAMS, Judge.

This case comes before the Court on an appeal from

the determination of the Court of Common Pleas of Alle-

gheny County that a resolution passed by the Moon Area

School District which imposed a fifteen per cent parking

tax on users of the parking lots adjacent to the Greater

Pittsburgh International Airport is unconstitutional. The

lower court found the tax to be in derogation of the

Commerce Clause of the United States Constitution and

the Due Process Clauses of the United States and Penn-

sylvania Cc.istitutions. It further held that it exceeded

the limitations set by Section 8(4) of the Local Tax En-

abling Act No. 115, Act of December 31, 1965, P.L. 1257,

as amended, 53 P.S. §6908(4).

Having examined the record and relevant law, we

hereby affirm and adopt as our own the able Opinion of

Judge Narick, entered to No. S.A. 421-1979 below.

Appendix B. 25a

Order

AND Now, the 30th day of April, 1981, the Order of

the Court of Common Pleas of Allegheny County dated

June 8, 1979 (No. S.A. 421-1979) is hereby affirmed.

WILKINSON, J., did not participate in the decision in

this case.

26a Appendix C.

Appendix C

TRICCO, ET AL.

v.

Moon AREA SCHOOL DISTRICT, ET AL.

No. SA398 and No. SA 421 of 1979. In the C.P. of

Allegheny County, Civil Division.

Opinion and Order of Court

NARICK, J., June 8, 1979.—This is an appeal from the

Resolution of the Moon Area School District (District)

imposing a 15% parking tax on persons parking motor

vehicles in parking lots at or adjacent to the Greater

Pittsburgh International Airport (Airport). We dis-

missed the District’s Preliminary Objections attacking

the Petitioners’ standing to appear as parties based on

our finding that the Petitioners had a sufficient interest

to confer standing under Section 6 of The Act. William

Penn Parking Lot, Inc. v City of Pittsburgh, 464 Pa. 169,

346 A.2d 269 (1975) and cases cited therein. We find that

the Resolution imposing the tax violates the Commerce

Clause of the United States Constitution, the Due Proc-

ess Clause of the Pennsylvania and United States

Constitutions and the tax is excessive and unreasonable

in violation of Section 8(4) of the Local Tax Enabling Act

No. 511, Act of December 31, 1965, P.L. 1257, 53 PS.

§6908(4) herein referred to as The Act.

Based on the stipulations and evidence presented at

the evidentiary hearing, arguments and briefs, we make

the following findings:

Appendiz C. 27a

RESOLUTION

The District, on March 26, 1979, pursuant to The Act,

adopted Resolution No. 79-2 imposing the above tax for

the following purposes:

“Whereas, in recent years the cost of operating the

Schools of the Moon Area School District has so

increased that it is necessary to raise additional

funds for the proper op-ration of said schools and for

the furnishing of an adequate public education in

said school district; and

“Whereas, budgetary deficits are contemplated by

said school district; and

“Whereas, the law of the Commonwealth of Pennsyl-

vania under Act No. 511 of 1965, and its amend-

ments, known as the ‘Local Tax Enabling Act’ under

the authority of which this resolution is enacted,

have provided for the raising of school funds.”

The Resolution requires the operators of the com-

mercial parking lots to add the 15% tax to the considera-

tion charged for parking and on the 15th day of each

month to file a return with the collector of the District.

Each operator of a parking lot is required to obtain a

parking registration certificate and to pay a Ten Dollar

annual fee for such certificate. The consideration for

parking specifically shall not include the above-imposed

tax. Each operator is the collector of the tax from each

patron for the District.

PARTIES

The Petitioners in SA 398 of 1979 include 26 resident

taxpayers of the District and four nonresidents that may

become subject to the tax imposed by Resolution: Grant-

Oliver Corporation (Grant Parking), which operates the

28a Appendix C.

parking lots and valet concessions at the Airport; Alle-

gheny Airlines; Trans World Airlines (airlines) who

share in the revenues generated by the parking lot con-

cession operated at the Airport by Grant Parking.

The Petitioners in SA 421 of 1979 are Airway Arms,

Incorporated, d/b/a Airport Mobil Service (Mobil Park-

ing), an operator for a parking lot within the District and

whose patrons are subject to the tax herein; Greater

Pittsburgh Service Corporation, d/b/a/ Airways Airport

Parking (Airways Parking), operator of a parking lot

within the District and whose patrons are subject to the

above tax; Pittsburgh’s Airport Motel, Incorporation

(Airport Motel), an owner of land leased on a percentage-

of-income basis to Airways Parking; J. C. Koch, a resi-

dent taxpayer and a patron of the parking lots within the

School District and subject to the above tax; 23

nonresidents of the District, patrons of the parking lots

within the District and subject to the above tax; and five

nonresident-owners of land leased on a percentage-of-

income basis to Airways Parking.

DISTRICT AND MOON TOWNSHIP

The District is made up of Crescent and Moon

Townships with a population of approximately 23,000

and a student enrollment of approximately 4,959. The

District imposes and collects Earned Income Tax from

resident-employes within the District and Occupation

Tax from persons employed within the District, whether

residents or nonresidents. Moon Township (Township),

the location of the Airport, imposes and collects real

estate taxes from Airways Parking and Mobil Parking lot

operators and collects a 10% gross receipts tax on their

parking transactions at Airways Parking and Mobil Park-

ing lots. The monies collected by the Township are ex-

Appendix C. 29a

pended for the normal municipal services, including

highway and road maintenance, police and fire protection

and similar services for its residents. The District, on the

other hand, expends no money from its treasury for any

of the above Township-related services.

Further, the taxed users of the parking lots herein,

who with few exceptions are nonresidents of the District

and are travelers in interstate commerce, do not receive

and will not receive any benefits, services or protection

from the District. The District Resolution is not and does

not purport to be a police regulation of local aspects of

interstate commerce to safeguard local interest. The re-

ceipts from the tax herein will be used solely for the

District’s general revenue purposes.

AIRPORT

The Airport is one of the major commercial airport

facilities in the United States connecting the Greater

Pittsburgh Metropolitan Area, either directly or indi-

rectly, with other major airports within and without the

United States. It is owned and operated by Allegheny

County (County). In operating the Airport, the County

provides services such as crash, fire and rescue, general

maintenance and operation in clearing of runways and

necessary utilities such as electricity, heat and water. It

provides and pays for police, who are stationed at the

Airport for security and traffic control purposes. The

County’s revenues consist of landing fees, field usage,

office and hangar revenues and revenues from

concessioners that operate shops and restaurants within

the terminal buildings and parking lots.

There are nine major scheduled passenger airlines

which serve the Airport in providing transportation for

in excess of 80% of the persons engaged in interstate

30a Appendix C.

commerce and international travel. The number of

passengers serviced by the Airport during 1978 was

9,631,577; in 1977—8, 739,491. All commercial airlines

during the year 1977 scheduled 4,454,750 air passengers

between Pittsburgh and other points in Pennsylvania, of

which 3,943,520 passengers traveled in interstate com-

merce whereas 511,230 were intrastate commerce, or

11.5% of the overall interstate traveling passengers. The

number of aircraft operations at the Airport, including

landings and takeoffs, in 1978 was 336,366; in 1977—

319,845.

The parties stipulated that a substantial number of

the passengers departing from the Airport drive to the

Airport in their personal cars and park at lots located on

and off the Airport premises or use the courtesy or valet

parking discussed below. Within an eight-day period,

from April 24, 1979 through May 1, 1979, of the 1,005

patrons responding to a survey taken by Airways Park-

ing, six were residents of the District and all but three

persons were traveling in air commerce. One hundred

fifty-three persons were nonresidents of Pennsylvania. In

a survey conducted by Grant Parking, 509 parking

patrons responded with only 12 of those patrons—or

2.3%—who were residents of the District. Further, 481 of

the 509 were airline passengers on the day they were

leaving the parking lot or had others in their car who had

been airline passengers the day of the survey.

PARKING LOTs

There are six commercial parking lots within the

District located adjacent to or in close proximity to the

Airport. There are no nonresidential parking facilities

located within Crescent Township. The County granted

the operation of its County-owned parking lots and valet

Appendix C. 31a

parking concession to Grant Parking. Grant Parking, un-

der its concession agreement with the County, pays the

County a minimum of $3,000,000 per year, plus a substan-

tial percentage of the gross revenue from parking and

valet service receipts.

The 6,150 parking spaces at the parking lots involved

herein, located within the District, are broken down as

follows:

Grant Parking—5,465 Airport Arco—20

Airways Parking—940 Globe Wash—40

Mobil Parking—100 Allegheny Motor Inn—

10 to 60

Grant Parking uses 1,800 of its 5,465 spaces for valet

parking. Airways and Mobil Parking and Airport Arco

are located approximately 1,200 feet from the Airport.

A patron of the parking facility operated by Airways

Parking leaves his automobile in an area outside of the

entrance to the office where he surrenders the keys to his

automobile. Employees of Airways Parking drive a cour-

tesy bus which transports the patron to the Airport. A

ticket is given to the patron. The automobile is parked by

employes or agents of Airways Parking and the keys are

retained by the parking operator. Upon his return to

Pittsburgh, the patron informs Airways Parking by tele-

phone, and the courtesy bus returns to the Airport, picks

up the patron, and drives him back to the parking lot.

The automobile is brought to him by employes or agents

of Airways Parking, and a consideration is paid for the

valet parking at a current rate of four dollars per day.

The parking rate reflects the entire charge for the valet

parking service.

A patron of Mobil Parking drives his automobile to

the parking facility where an agent or employe gets into

32a Appendix C.

the vehicle and drives the patron to the Airport. The

patron is given a ticket, and the employe or agent drives

the automobile to the parking lot, parks the automobile

and retains the key. When the patron returns to Pitts-

burgh, he informs Mobil Parking by telephone, and an

agent or employe drives the patron’s automobile to the

Airport, picks up the patron, and returns him to the

parking lot, where he pays the consideration for the valet

parking at a current rate of four dollars per day, plus

15% tax or $.60. The parking rate reflects the entire

charge for the valet parking service.

A patron seeking to use Grant Parking’s valet serv-

ice would drive his automobile to the Airport terminal

where an employee gets into his vehicle and drives it to

its valet parking lot. The patron is given a ticket and

upon his return to Pittsburgh, he presents the ticket to

an employee of Grant Parking, who removes the vehicle

from the lot and delivers it to the patron, who pays the

consideration of five dollars per day, plus a 15% tax or

$.75.

The parking lots are economically dependent on the

patronage of interstate travelers traveling to and from

the Airport and in furtherance of air commerce. The

parking facilities and transactions are an integral part

and a link in the chain of interstate travel. The District

provides no services or benefits to the travelers parking

at the lots to facilitate the travel of the patrons of the

parking lots nor does it contribute to the regulation of

traffic or any other aspects of interstate commerce.

CONTENTIONS

The Petitioners challenge the imposition of the tax,

contending as follows:

Appendiz C. 33a

(1) Parking at the lots nerein is a link and an

integral part of travel in interstate commerce.

(2) The parking tax of the District is unlawful

because it imposes a constitutionally impermissible

burden on the right to travel by interstate commerce.

(3) The tax is unlawful because it provides for an

arbitrary taking of property without compensation

and due process clauses of the United States and

Pennsylvania Constitutions.

(4) The tax imposed on transactions covered by

Section 6908(4) of The Act involving business

transactions of the transfer of title or possession of

tangible personal property is excessive and unrea-

sonable and, therefore, invalid or in the alternative,

it should not exceed a rate of 2%.

(5) The Act does not authorize a District to re-

quire businesses located within the District to reg-

ister and collect taxes imposed on individuals pa-

tronizing those businesses except in the case of an

Earned Income Tax.

(6) The tax exceeds the authority granted to the

District by The Act because of the provisions of the

Resolution which require withholding and collecting

of taxes at the source.

(7) The Resolution and tax is federally pre-

empted by 49 USC §1513 as it is a tax, fee, head

charge directly or indirectly levelled on persons

traveling in air commerce or on the carriage of

persons traveling in air commerce.

CONCLUSIONS

(1) It is appropriate to note, before considering perti-

nent decisions relating to Petitioners’ first two conten-

tions, that the tax is a violation of the Commerce Clause,

34a Appendiz C.

Article 1, §8 of the United States Constitution, the tax

herein is imposed solely on the citizens, primarily

nonresidents of the District, parking in lots at the Air-

port who, with few exceptions, travel by commercial

airlines in interstate commerce. Further, the 15% tax

which the travelers are asked to pay for parking does not

contribute to or bear a fair share of the cost of providing

facilities, services or benefits that further interstate com-

merce or that the tax will contribute to the operation or

maintenance of the Airport and facilities related thereto,

including the parking lots. It is not a gross receipts tax or

a tax on the lot operators who are responsible only for

collecting the 15% tax.

We start with the presumption that the tax herein

passed pursuant to and under The Act is valid unless

shown to be in violation of the Constitutions of the Com-

monwealth of Pennsylvania or the United States or appli-

cable statutory law. Neither the parties nor our research

have found any Pennsylvania appellate court decisions

whether a tax on patrons of parking lots at or near

airports constitute an impermissible burden on inter-

state commerce. Although our Supreme Court, in Alle-

gheny Airlines, Inc., et al. v Philadelphia, 453 Pa. 181

(1973), was presented this constitutional contention in-

volving a local airport $2.00 head tax on departing airline

passengers, it did not consider that contention, basing its

decision on the federal legislation pre-empting any state

or local head tax at airports.

We believe the best decision on the power and limita-

tions upon state tax in the area of interstate commerce is

found in Freeman v Hewit, 329 U.S. 249, 91 L.Ed.

265(1946), which states as follows:

“The power of the States to tax and the limita-

tions upon that power imposed by the Commerce

Appendix C. 35a

Clause have necessitated a long, continuous process

of judicial adjustment. The need for such adjustment

is inherent in a federal government like ours, where

the same transaction has aspects that may concern

the interests and involve the authority of both the

central government and the constituent States.”

(Footnote omitted.) p. 251.

“The history of this problem is spread over hun-

dreds of volumes of our Reports. To attempt to har-

monize all that has been said in the past would nei-

ther clarify what has gone before nor guide the

future. Suffice it to say that especially in this field

opinions must be read in the setting of the particular

cases and as the product of preoccupation with their

special facts.

“Our starting point is clear. In two recent cases

we applied the principle that the Commerce Clause

was not merely an authorization to Congress to enact

laws for the protection and encouragement of com-

merce among the States, but by its own force created

an area of trade free from interference by the States.

In short, the Commerce Clause even without imple-

menting legislation by Congress is a limitation upon

the power of the States. Southern Pacific Co. v Ari-

zona, 325 U.S. 761; Morgan v Virginia, 328 U.S. 373.

In so deciding we reaffirmed, upon fullest considera-

tion, the course of adjudication unbroken through

the Nation’s history. This limitation on State power,

as the Morgan case so well illustrates, does not

merely forbid a State to single out interstate com-

merce for hostile action. A State is also precluded

from taking any action which may fairly be deemed

to have the effect of impending the free flow of trade

between states. It is immaterial that local commerce

Appendix C.

is subjected to a similar encumbrance. It may com-

mend itself to a State to encourage a pastoral instead

of an industrial society. That is its concern and its

privilege. But to compare a State’s treatment of its

local trade with the exertion of its authority against

commerce in the national domain is to compare

incomparables.

These principles of limitation on State power

apply to all State policy no matter what State inter-

est gives rise to its legislation. A burden on inter-

state commerce is none the lighter and no less objec-

tionable because it is imposed by a State under the

taxing power rather than under manifestations of

police power in the conventional sense. But, in the

necessary accommodation between local needs and

the overriding requirement of freedom for the na-

tional commerce, the incidence of a particular type

of State action may throw the balance in support of

the local need because interference with the national

interest is remote or unsubstantial. A police regula-

tion of local aspects of interstate commerce is a

power often essential to a State in safeguarding vital

local interests. At least until Congress chooses to

enact a nation-wide rule, the power will not be de-

nied to the state. The Minnesota Rate Cases, 230 U.S.

352, 402 et seq.; S. C. Hwy. Dept. v Barnwell Bros.,

303 U.S. 177; Union Brokerage Co. v Jensen, 322 U.S.

202, 209-12. State taxation falling on interstate com-

merce, on the other hand, can only be justified as

designed to make such commerce bear a FAIR

SHARE of the cost of the local government whose

protection it enjoys. But revenue serves as well no

matter what its source. To deny to a State a particu-

lar source of income because it taxes the very proc-

ess of interstate commerce does not impose a crip-

Appendix C. a

pling limitation on a State's ability to carry on its

local function. Moreover, the burden on interstate

commerce involved in a direct tax upon it is inher-

ently greater, certainly less uncertain in its conse-

quences, than results from the usual police regula-

tions. The power to tax is a dominant power over

commerce. Because the greater or more threatening

burden of a direct tax on commerce is coupled with

the lesser need to a State of a particular source of

revenue, attempts at such taxation have always been

more carefully scrutinized and more consistently re-

sisted than police power regulations of aspects of

such commerce.” (Emphasis added.) pp. 252-253.

“An exaction by a State from interstate commerce

falls not because of a proven increase in the cost of

the product. What makes the tax invalid is the fact

that there is interference by a State with the freedom

of interstate commerce.” (Emphasis added.) pp.

256-7.

Also pertinent and in substantial respects similar to

the present case is Crandall v Nevada, 6 Wall 35, 18 L.Ed.

745 (1868). There the Court invalidated a Nevada statute

that levied a “tax of one dollar upon every person leaving

the State by any railroad, stage coach, or other vehicle

engaged or employed in the business of transporting

passengers for hire.” The Court considered whether any

tax of that character, whatever its amount, impermissi-

ble burdened the constitutionally-protected right of

citizens to travel. In holding that it did, the Court rea-

soned:

lll f the State can tax a railroad passenger one

dollar, it can tax him one thousand dollars. If one

State can do this, so can every other State. And thus

38a Appendix C.

one or more States covering the only practicable

routes of travel from the east to the west, or from

the north to the south, may totally prevent or seri-

ously burden all transportation of passengers from

one part of the country to the other.“ 18 L.Ed. at 748.

In the Nevada case, (the charge —similar to the tax in the

instant case) the travelers were not asked to bear a fair

share of the cost of providing public facilities or services

that further travel in interstate commerce. Thus the tax

was charged without regard to whether Nevada provided

any facilities or services for the passengers required to

pay the tax. Cases decided since Crandall, including

Evansville-Vanderburg Airport Authority v Delta

Airlines, et al., 405 U.S. 707, 31 L.Ed. 620 (1972), have

distinguished it on the ground and have sustained taxes

designed to make interstate commerce bear a fair share

of the cost of the local government whose protection it

enjoys. Freeman v Hewit, supra; Henfrick v Maryland,

235 U.S. 610, 59 L.Ed. 385 (1915). In the latter case, a

District of Columbia resident was convicted of driving in

Maryland without paying a fee charged to help defray

the costs of road construction and repair. He challenged

his conviction on the ground that the fee burdened inter-

state commerce in violation of the rights of citizens to

travel into and through the state. The Court rejected that

argument, holding that:

“(W)here a State at its own expense furnishes special

facilities for the use of those engaged in commerce,

interstate as well as domestic, it may exact competi-

sation therefor.”

In Evansville-Vanderburg, supra, a local municipal head

tax imposed on passengers departing the airport was

sustained because they were necessary for the operation

and maintenance of airport facilities. The Court stated:

Appendiz C. 39a

“We therefore regard it as settled that a charge

designed only to make the user of state-provided

facilities pay a reasonable fee to help defray the costs

of their construction and maintenance may consti-

tutionally be imposed on interstate and domestic

users alike. The principle that burdens on the right

to travel are constitutional only if shown to be nec-

essary to promote a compeliing state interest has no

application in this context... The facility provided

at public expense aids rather than hinders the right

to travel. A permissible charge to help defray the

cost of the facility is therefore not a burden in the

constitutional sense.” (Emphasis added.) (Citation

omitted.)

Unlike the tax before us, the Court found the head tax

reflected a fair approximation for use of the facilities for

whose benefit they were imposed. Significantly, in the

instant case, there is no suggestion that the District’s

charges on the travelers in interstate commerce in fact

advances the constitutionally-permissible objective of

having interstate commerce bear a fair share of the cost

to the District of the facilities relating to or aiding inter-

state air travel.

Since the Evansville-Vanderburg decision, supra,

Congress enacted Section 1113 of the Federal Aviation

Act, 49 U.S. Code §1513 prohibiting states and political

divisions thereof from levying or collecting a “tax, fee,

head charge or other charge directly or indirectly on

persons traveling in air commerce.” This Federal Act

pre-empts local head taxes on those traveling in air com-

merce, which our Supreme Court relied upon in its Alle-

gheny Airline decision, supra.

We now turn to (1) whether the Petitioners were

engaged in interstate commerce and, if so, (2) whether

40a Appendix C.

the Resolution and tax in question impose an imper-

missible burden on interstate commerce. The actual

point in time and place at which interstate commerce

actually commences and ceases has been the subject of

discussion in many varied fact applications. Thus, in

United States v Capital Transit Co., 338 U.S. 276, 94

L.Ed. 93 (1949), the Supreme Court found a motor carrier

which operated buses and streetcars solely within the

District of Columbia to be an integral part of an inter-

state movement. The Court reasoned that although the

defendant’s vehicles never left the confines of the Dis-

trict, the fact that a large portion of the passengers

occupying those vehicles were government employes

traveling to or from Federal offices across the Potomac

River in Virginia, effectively operated to bring defend-

ants within the stream of interstate commerce.

In a somewhat different context, a number of cases

have been determined that activities involving parking

facilities at an airport are interstate commerce. In Jack-

son v Airways Parking Co., 297 F. Supp. 1366 (N.D. Ga.

1969), the employe of a parking concessionaire, whose

lots were adjacent to the Atlanta Municipal Airport, was

found to be engaged in interstate commerce. The Court

looked at numerous facets in rendering its decision,

among them that the employer’s lots were used by airline

passengers who leave their cars in the lot before plane

flights, many of which are interstate. The Court also

found that the employer’s lot was almost totally, if not

completely, dependent upon the existence of the airport

for its revenue. Thus, the geographic location, the inter-

state character of the lot patrons and the economic de-

pendence on the airport all served to convince the Court

that the lot and its employes were directly related to the

ultimate interstate transaction—the flight.

Appendix C. 4la

In Park N' Fly of Texas, Inc. v City of Houston, 327 F.

Supp. 910 (S. D. Texas 1971), the Court struck down a

municipal ordinance which regulated the operation of a

shuttle bus serving an airport parking lot. The Court

stated when a number of the passengers departing by air

from the City of Houston drive to the airport and park

their cars in the airport parking lot:

“Park N’Fly and Budget are directly and totally de-

pendent economically upon the patronage of inter-

state travelers. Both are in close physical proximity

to an interstate facility. And their clientele, with

obvious and considered forethought, commence and

end their interstate sojourns at plaintiff's and

intervenor’s parking lots, rather than at the air ter-

minal. As a rule they are not concerned with just

another local fare. Instead, their customers are al-

most exclusively bound for interstate travel.” Id. at

921.

In United States v Yellow Cab Co., 332 U.S. 218, 90

L.Ed. 2010 (1947) although the Court found that cabs

transporting purely local fares were not in interstate

commerce, they held that a transfer concession operation

of cab wholly within the city between railway stations

and the city was interstate in nature. We believe the

Yellow Cab case is distinguishable and not controlling in

the instant case. The Court noted the following:

We must. mark the beginning and end of a partic-

ular kind of interstate commerce by its own practical

consideration.

“Here we believe that the common understand-

ing is that a traveler intending to make an interstate

rail journey begins his interstate movement when he

boards the train at the station and that his journey

ends when he disembarks at the station in the city of

42a Appendix C.

destination. From the standpoint of time and con-

tinuity, the taxi cab trip may be quite distinct and

separate from the interstate journey. To the taxi cab

driver, it is just another local fare.”

However, the Court then went on to limit the applicabil-

ity of the holding in that case:

“We do not mean to establish an absolute rule

that local taxi cab service to and from railroad sta-

tions is completely beyond the reach of federal

power.”

Further

When persons or goods move from a point of

origin in one state to a point of destination in an-

other, the fact that part of that journey consists of

transportation by an independent agency solely

within the boundaries of one state does not make

that portion of the trip any less interstate in charac-

ter.”

In the instant case, the parking which would be the

subject of the tax is such an integral part of interstate

commerce that it cannot be realistically separated from

it and is not subject to tax. Michigan-Wisconsin Pipe

Line Co. v Calvert, 347 U.S. 157, 166 (1954): [A] tax

imposed on local activity that is related to interstate

commerce is valid if, and only if, the local activity is not

such an integral part of interstate commerce that it can-

not be realistically separated from it.” The parking lots

which serve the Airport are economically dependent

upon the patronage of interstate travelers, the parking

patrons—with few exceptions—commence and end their

interstate travel at these parking lots rather than at the

air terminal itself. Interstate travel would be signifi-

cantly impeded without the availability of parking lots

Appendix C. 43a

and the parking by interstate travelers. The parking lots

are within walking distance of the Airport. It would be

exceedingly difficult to read the above cases, including

the Yellow Cab case, supra, as holding that interstate

commerce arbitrarily and absolutely ends at the air ter-

minal. Under the circumstances present in this case,

practicality and logic clearly dictate that parking activity

is an integral part of interstate commerce and an impor-

tant facet of the right to travel in interstate and thus

cannot be subject to the tax herein. Accordingly, we find

that the parking patrons at the Airport parking lots are

an integral part of the interstate package. We also find

that the Resolution and tax impose an impermissible

burden on interstate commerce. From our analysis of the

above cases, the Constitution does not prohibit a charge

designed to make interstate or a domestic user of a

locally-provided facility pay a reasonable fee to help de-

fray the cost of maintaining or constructing that facility.

In the instant case, the tax at issue is a direct burden on

persons traveling in interstate commerce and in which

the District provides no facilities for the persons re-

quired to pay it or any contribution to interstate travel.

As noted in the facts above, the patrons subject to the

tax are overwhelmingly engaged in interstate commerce

and are nonresidents of the District. The District pro-

vides no services or facilities for the nonresident inter-

state travelers because there are none available. The

practical operation of the Resolution and the tax directly

burdens or effectively prevents the free flow of interstate

commerce. As stated by the Court of Appeals for the

Fifth Circuit, in Toye Bros., Yellow Cab Co. v Irby, 437

F.2d 806 (5th Cir. 1971):

“Because state and local bodies have valid authority

to prescribe regulations in many areas, the test of

whether a particular state or local enactment con-

44a Appendix C.

flicts with an exercise by Congress of its commerce

powers entails ascertainment of whether the na-

tional interest in unfettered flow of interstate com-

merce outweighs local needs to protect public health,

safety, welfare, or morals. Moreover, since conflicts

with the commerce power are not always patent, it is

often necessary for courts to determine whether a

state or local enactment not facially in conflict is

nonetheless (1) in application a discrimination

against interstate commerce.”

Contrary to the contention of the District, a tax

having effects forbidden by the Commerce Clause will

not be saved merely because it is encased in terms of

bearing upon some “local incident.” As stated by Justice

Rutledge in his concurring opinion in the Freeman case,

supra, at 267:

“As we then said, all interstate commerce takes

place within the states and the consequences forbid-

den by the commerce clause cannot be achieved le-

gally simply by the device of hooking the tax or

other forbidden regulation to some selected ‘local

incident.’ That such a factor may be chosen for bear-

ing the ‘direct’ incidence of the tax may be a consid-

eration to be taken into account in determining its

validity. But it cannot validate a tax or regulation

which produced the forbidden consequences, any

more than a ‘direct tax’ which does not produce them

can be outlawed because it is direct. Not ‘directness’

or ‘immediacy’ of incidence per se, whether ‘upon the

commerce itself’ or upon a ‘local incident,’ is the

outlawing factor, but whether the tax, regardless of

the special point of incidence, has the consequences

for interstate trade intended to be outlawed by the

commerce clause.”

Appendix C. 45a

In the Nippert v Richmond case, 327 U S. 416 at 423,

the Court stated:

“If the only thing necessary to sustain a state tax

bearing upon interstate commerce were to discover

some local incident which might be regarded as sepa-

rate and distinct from ‘the transportation or inter-

course which is’ the commerce itself and then to lay

the tax on that incident, all interstate commerce

could be subjected to state taxation and without re-

gard to the substantial economic effects of the tax

upon the commerce.”

The District’s reliance on McGillick v City of Pitts-

burgh, 415 Pa. 581 (1964) is misplaced and distinguisha-

ble from the instant case. In that case the parking tax

was imposed on all parking transactions within the City

of Pittsburgh and whose transactions were local and not

shown to be related to interstate commerce since it in-

volved parking lots in the City of Pittsburgh approxi-

mately twelve miles from the Airport. Further, the Court

recognized in citing a case, that even interstate com-

merce must pay its way but that the case before the trial

court was a purely local transaction.

(2) Although not necessary to this Court’s decision,

since the Resolution has been found to violate the United

States Constitution, two other contentions merit consid-

eration. Petitioners contend that the District’s 15% park-

ing tax is violative of the Equal Protection and Due

Process Clauses of the 14th Amendment of the United

States Constitution and the Due Process Clause of the

Pennsylvania Constitution since the said tax will provide

no benefits to nonresident taxpayers and therefore

amounts to an arbitrary taking of property without com-

pensation.

46a Appendix C.

The test to be applied in determining whether the

tax herein violates the Due Process Clause of the Consti-

tution is set forth in Wisconsin v J. C. Penney Co., 311

US. 435 (1945).

“A state is free to pursue its own financial policies,

unembarrassed by the Constitution, if by the practi-

cal operation of a tax the state has exerted its power

in relation to opportunities which it has given, to

protection which it has afforded, to benefits which it

has conferred by the fact of being an orderly, civi-

lized society.” (Emphasis supplied.)

Thus, the test to be applied is:

“(Wjhether the taxing power exerted by the state

bears fiscal relation to protection, opportunities and

benefits given by the state. The simple but control-

ling question is whether the state has given anything

for which it can ask return.” (Emphasis supplied.)

The general applicability of the benefit theory has re-

ceived reaffirment by the United States Supreme Court

in Standard Pressed Steel Co. v Washington Department

of Revenue, 419 U.S. 560, 561 (1975); Morton Salt Co. v

City of South Hutchinson, 159 F.2d 897 (10th Cir. 1947);

and U.S. Tobacco Co. v Commonwealth of Pennsylvania,

386 A.2d 471, 473 (1978) wherein Justice Manderino,

writing for the majority of the Pennsylvania Supreme

Court, stated the general proposition that:

“A nexus must exist between the tax and activities

within the state for which the tax is exacted, and

‘the [controlling] question is whether the state has

given anything for which it can ask return.’ Standard

Steel Co. v Washington Dep’t. of Revenue, 419 US.

560, 562, 95 S.Ct. 706, 708, 42 L.Ed.2d 719, 722

Appendix C. 47a

(1975), citing Wisconsin v J. C. Penney Co., 311 U.S.

435, 444, 61 S.Ct. 246, 85 L.Ed. 267, 270-71 (1940).”

In American Airlines, Inc. v City of Saint Louis, 368

SW2d 161 (Mo. S.Ct. 1963), the Supreme Court of Mis-

souri held that a statute authorizing a city to collect

taxes based on the value of aircraft located for any time

at an airport operated by the city situated outside of the

city’s corporate limits violated the Due Process Clauses

of the Missouri and federal Constitutions. The court ap-

plied the “benefit theory”, which it articulated as fol-

lows:

“While the legislature is vested with the power to fix

the situs of property for taxation, its action must not

be an arbitrary one. The power is subject to the rule

of uniformity ‘and to the limitation that there must

be some appreciable relation between the municipal-

ity exacting the tax and the person upon whom the

burden is cast, either directly or by reference to the

property taxed, from which there can reasonably be

seen reciprocal duties to accord benefits on the one

hand, and to respond therefor on the other...” Id.

at 164.

The court found that while substantial services were

provided by the city to the aircraft, and airline compa-

nies, in the form of protection from crashes and fire,

rescue operations, maintenance and operation of

runways, and provision of utilities; the cost of these ser-

vices was defrayed from landing fees, usage charges, and

rentals paid by the airlines pursuant to lease agreements

negotiated with the city.

In the instant case, the District does not and cannot

deny that it must confer some benefit upon those it taxes

for the tax to be valid. The District contends primarily

48a Appendix C.

that it does confer some direct benefit to nonresident

parkers since the District’s facilities are open to the

public, which may be used by the guests of the motels at

the parking lots who probably would be patrons of the

parking lots located at the Airport. Also, it argues that

since the Grant Parking lot is not subject to real estate

tax, the District has suffered a loss of tax revenues while

the general public receives a benefit in lower operating

cost of the Airport. We are satisfied, under all the circum-

stances, that those persons subject to the tax, which

includes near 100% of those parking at the parking lots

herein, will receive no benefit in return from the District.

Accordingly, we find in agreement with the contention of

the Petitioners that the proposed tax is clearly unconsti-

tutional.

(3) The Petitioners contend the tax is excessive and

unreasonable and, therefore, it is invalid or, in the alter-

nate, the tax should not exceed 2%. It relies on Section 8

(4) of the Act, 53 P.S. §6908 (4), the rationale of the

concurring opinion of Judge Crumlish in Chwatek v

Parks, 5 Pa. Commonwealth Ct. 414, 291 A.2d 333 (1972)

and the William Penn case, supra. Section 8 (4) of the Act

provides as follows:

“No taxes levied under the provisions of this Act

shall be levied by any political subdivision on the

following subjects exceeding the rates specified in

this section:”

“(4) On retail sales involving the transfer of title or

possession of tangible personal property, two per-

cent.”

Judge Crumlish, in the Chwatek case, supra, indicated in

his concurring opinion that a 10% gross receipt tax of

Appendix C. 49a

commercial parking lots is a bailment transaction. He

stated:

II] am compelled to comment on appellant's further

argument that the transaction is a bailment and

hence the transfer of possession of tangible personal

property for a fee, upon which the Local Tax Enabl-

ing Act, 53 PS. §6908 (4) limits taxation to two

percent. The City’s answer to this contention is that

the tax is not on the bailment transactions but rather

on the transfer of moneys in the form of gross re-

ceipts.

“Obviously, the City believes that while individual

bailment transactions are protected by the two per-

cent limitation, the gross receipts of these transac-

tions are not, even if all receipts of a business come

from the bailment of personal property. I cannot

agree with this interpretation and would therefore

hold the tax is also invalid as it applies to the re-

ceipts from the bailment of personal property.” Id.

291 A.2d at 335.

Neither the majority opinion of the Commonwealth

Court nor the Pennsylvania Supreme Court (450 Pa. 62,

299 A.2d 631 (1972)) considered the bailment contention

because it had not been raised in the trial court.

Under the William Penn case, the Court may declare

a tax invalid if it exceeds the limit set forth in Section

17(a) of the Act. Further, that if a tax exceeds the limits

of the rates in Section 8(4), the Court may reduce the

tax. The Court also noted that because of the variety of

taxes authorized by the Act, taxes that are not specifi-

cally set forth under Section 8(4), if sufficiently similar to

a member of the class of cases referred to therein, the

Court may look to the taxes in Section 8(4) in determin-

ing whether the rate is excessive.

50a Appendix C.

The Petitioners claiming that the tax herein, if not

within the “Generic” definition of retail sales, it is a

bailment transaction and, therefore, similar to the limits

set forth in Section 8(4); accordingly the tax should not

exceed 2% if not otherwise found invalid as herein.

Airways Parking, Mobil Parking and Grant Parking

clearly constitute bailment transactions. In Taylor v

Philadelphia Parking Authority, 398 Pa. 9 (1959), the

Supreme Court—considering a case of first impression on

fixing liability on parking lot operators for loss by theft

affirmed the trial court’s decision that there was no

bailor-bailee relationship but instead a lease of parking

privileges and consequently no liability for loss by theft

in the absence of culpable negligence. Thus in Taylor,

supra, in discussing the classes of legal relationship in

dealing with the present type of parking lots, stated:

“(T)he first is where an owner rents space in a park-

ing lot, drives his automobile therein, locks it or not

as he chooses, and for all practical purposes retains

control thereof. The second is where the garage

attendants collect fees, assume control of cars, park

them and move them about within the garage as they

find convenient, the keys are left in the cars and

tickets are issued as means of identifying cars upon

redelivery. The first class of cases has almost univer-

sally been held to be that of a mere lease of parking

privileges because the owner has paid a fee only for

the privilege of parking his automobile without any

actual delivery to the parking lot operator and with

no corresponding right to redelivery...”

“The second class of cases has been held to con-

stitute a bailment and the lot owner held responsible

for loss of the car or damage to it...” (Citations

omitted.)

Appendix C. 51a

Accordingly, since the parking transaction is sufficiently

similar to the permitted tax in Section 804), we find that

the District’s 15% tax is excessive and unreasonable and

should be reduced to 2% at Airways Parking, Mobil Park-

ing and the Grant Parking Valet lot.

We also consider for the purpose of taxes under Sec-

tion 8(4) whether the tax herein is not a “sales or other

similar tax.” In Mellon Square Garage, Inc. v Public

Parking Authority of Pittsburgh, 442 Pa. 223 (1971), the

Court—in affirming the trial court’s decision that the

parking tax was not excludible from gross receipts under

the terms of a lease, the Court considered whether for

the purposes of computing rent under a lease between

the parties a parking tax was a sales tax. The Court

found that the tax more closely resembled a mercantile

tax, a tax on the privilege of doing business and meas-

ured by the gross volume of business annually trans-

acted. However, in discussing the distinction between

taxes, the Court stated: “A sales tax is imposed upon a

transaction whereby property is acquired. Usually the

tax is on the purchaser, and the vendor acts as merely a

collecting agent for the taxing authority.” On the other

hand, “A mercantile tax is a ... ‘tax upon the privilege

of transacting business measured by the gross volume of

business annually transacted.’” (Citations omitted.) The

Court concluded that the ordinance more closely resem-

bled a tax on the privilege of doing business than one on

the sales of parking space. However, it stated “If Mellon

Square Garage were merely a collector of the tax from its

patrons, its argument would be persuasive.” A converse

reading of the Court’s holding indicates that the tax

imposed on parking lots in the instant case would be

classified as a sales tax. If the tax is a sales tax, it would

52a Appendix C.

follow that the tax imposed would be limited to 2% as

provided under Section 8(4) and we so find.

(4) We have carefully considered Petitioners’ conten-

tions (5), (6) and (7) and find they are without merit and,

therefore, rejected. Relating to contention (7), the Fed-

eral Statute 47 U.S.C., Section 1513 has pre-empted any

state or local intervention in the field of airport head

taxes in response to the Evansville-Vanderburg decision.

The legislation was not intended to pre-empt the parking

tax herein.

We find and conclude that the Resolution and tax

herein, challenged by the Petitioners for the reasons

stated herein, are unconstitutional, void, invalid and

unenforceable. Further, we find that the tax exceeds the

limitation of Section 8(4) of the Act and, therefore, is

excessive.

ORDER

AND Now, to-wit, this 8th day of June 1979, upon

consideration of the above Court’s findings and conclu-

sions, it is ORDERED, ADJUDGED and DECREED that the

District’s Resolution and tax are hereby found to be

invalid in violation of the Commerce Clause of the U. S.

Constitution, Due Process Clauses of the Pennsylvania

and U. S. Constitutions and excessive in violation of

Section 8(4) of The Act, 53 P.S. §6908(4). Further, it is

hereby ORDERED that the District and their agents are

enjoined from enforcing Resolution No. 79-2 against the

Petitioners and all other present and future parking

patrons at the Airport parking lots herein and

Petitioners’ parking lot operators.

By THE CouRT:

/s/ NARICK, J.

Appendix C. 53a

Order

AND Now, to-wit, this 8th day of June 1979, upon

consideration of the above Court’s findings and conclu-

sions, it is ORDERED, ADJUDGED and DECREED that the

District’s Resolution and tax are hereby found to be

invalid in violation of the Commerce Clause of the U. S.

Constitution, Due Process Clauses of the Pennsylvania

and U. S. Constitutions and excessive in violation of

Section 8(4) of The Act, 53 P.S. §6908(4). Further, it is

hereby ORDERED that the District and their agents are

enjoined from enforcing Resolution No.79-2 against the

Petitioners and all other present and future parking

patrons at the Airport parking lots herein and

Petitioners’ parking lot operators.

By THE COURT:

/s/ Naricx, J.

54a Appendiz D.

Appendix D

SUPREME COURT OF PENNSYLVANIA

WESTERN DISTRICT

JAMES E. Tricco, JAMES A. Davis,

M. RALPH GUNTER, MARY ELLEN ANDREW,

JOHN Fiore, E. J. MAGNEUSON,

R. U. MOORMAN, WAYNE Barr, M. D.

Houser, A. S. Acrk1, GLENN HARDIN, No. 81-1-67

HENRY ROUGIER, RACHELLA PALAIO,

ARTHUR Cox, ROBERT BIEM, CHARLES

Bower, C. DONALD HANSBURG,

GEORGE E. LONG, CHARLES EBNER,

WILLIAM C. DOWLING, GRANT-OLIVER

CORPORATION, ALLEGHENY AIRLINES AND

TRANS WORLD AIRLINES,

v.

Moon AREA SCHOOL DISTRICT

Judgment

On CONSIDERATION WHEREOF, it is now here ordered

and adjudged by this Court that the judgment of the

Commonwealth Court , be, and the same is

hereby reversed and the objections to the tax are dis-

missed.

By THE COURT:

Car. Rick, Esquire

Prothonotary

Dated: May 28, 1982

Appendix E. 55a

Appendix E

IN THE SUPREME COURT OF PENNSYLVANIA

WESTERN DISTRICT

No. 81-1-67

GRANT OLIVER CORPORATION, TRANS WORLD AIRLINES,

USAIR, et al.

Petitioners-Appellees,

V.

Moon AREA SCHOOL DISTRICT,

Appellant.

Notice of Appeal to the Supreme Court of

The United States

Notice is hereby given that Grant-Oliver Corpora-

tion, Trans World Airlines, USAir, et al., Petitioners-

Appellees, in the above captioned action, hereby appeal

to the Supreme Court of the United States from the final

judgment of this Court which was entered on May 28,

1982, reversing the judgment of the Commonwealth

Court of Pennsylvania and dismissing Petitioners’

objections to the patron parking tax imposed by Reso-

lution 79-2 of the Moon Area School District.

This appeal is taken pursuant to 28 U.S.C. §1257(2).

JEFFREY S. BLU, Esquire

JOHN H. BINGLER, Esquire

THORP, REED & ARMSTRONG

2900 Grant Building

Pittsburgh, PA 15219

(412) 288-2558

56a Appendix E.

CERTIFICATE OF SERVICE

It is hereby certified that service of the foregoing

Notice of Appeal has been made on this 5th day of Au-

gust, 1982 by delivering three copies thereof to the

offices of the following attorneys, who are counsel for all

parties required to be served:

JOHN A. Ross, Esquire

1212 Frick Building

Pittsburgh, PA 15219

RICHARD H. MARTIN, Esquire

Frick Building, 10th Floor

Pittsburgh, PA 15219

Appendix F. 57a

Appendix F

Resolution No. 79-2

A RESOLUTION OF MOON AREA SCHOOL DISTRICT PROVID-

ING FOR THE LEVYING AND ASSESSING A TAX OF FIFTEEN

PER CENTUM (15%) UPON THE CONSIDERATION PAID BY

THE PATRONS OF A NON-RESIDENTIAL PARKING PLACE FOR

EACH PARKING TRANSACTION, TO BE COLLECTED FROM THE

PATRON BY THE OPERATOR OF EACH Such Nor-

RESIDENTIAL PARKING PLACE; REQUIRING PARKING REG-

ISTRATION CERTIFICATE; PROVIDING FOR THE LEVYING AND

COLLECTION OF SUCH TAX; PRESCRIBING THE REQUIRE-

MENTS FOR RETURNS AND RECORDS; CONFERRING POWERS

AND DuTIEs UPON THE COLLECTOR; AND, IMPOSING

PENALTIES.

WHEREAS, in recent years the cost of operating the

schools of the Moon Area School District has so in-

creased that it is necessary to raise additional funds for

the proper operation of said schools and for the furnish-

ing of an adequate public education in said school dis-

trict; and,

WHEREAS, budgetary deficits are contemplated by

said school district; and,

WHEREAS, the law of the Commonwealth of Pennsyl-

vania under Act No. 511 of 1965, and its amendments,

known as the “Local Tax Enabling Act”, under the au-

thority of which this Resolution is enacted, have pro-

vided for the raising of school funds.

Now, THEREFORE, the Board of School Directors of

the Moon Area School District, Allegheny County, Penn-

sylvania, comprising the Townships of Moon and Cres-

cent, hereby resolves as follows:

58a Appendix F.

SECTION 1. NAME OF RESOLUTION: This Resolu-

tion shall be known as the “Parking Tax Resolution”.

SECTION 2. DeriniTions: The following words

and phrases when used in this Resolution shall have the

meaning ascribed to them in this Section unless the con-

text clearly indicates a different meaning:

(a) Collector -The person or persons appointed or

elected by Resolution of the Board of School Directors of

the School District, to collect all taxes imposed by this

Resolution.

(b) “Consideration” — The payment or compensation

of whatever nature, of whatever amount, and however

stated or calculated, received by the operator from the

patron, upon an express or implied contract, or under

lease, or otherwise, whether or not separately stated, and

whether paid in cash or credit to an account, for each

parking or storing of a motor vehicle by a patron. The

consideration shall not include the tax imposed and col-

lected under this Resolution. Whenever the considera-

tion is not fixed in a cash amount or in a stated and bona

fide cash equivalent, the Collector shall make a reason-

able determination of its cash value.

(e) “Month”—a calendar month.

(d) “Non-Residential Parking Place” or "Parking

Place —any place within the School District, whether

wholly or partially enclosed or open, at which motor

vehicles are parked or stored for any period of time in

return for a consideration, not including: (i) any parking

area or garage, to the extent that it is provided or leased

to occupants of a residence on the same or other prem-

ises, for use only in connection with, and as accessory to,

the occupancy of such residence, and (ii) any parking

area or garage operated exclusively by an owner or

Appendix F. 59a

lessee of a hotel, motel, apartment hotel, tourist court or

trailer park, to the extent that the parking area or ga-

rage is provided to guests or tenants of such hotel, motel,

apartment hotel, tourist court, or trailer park for no

additional consideration.

The term “Hotel” shall mean a building designed for

occupancy primarily as the temporary abiding place of

individuals who are lodged with or without meals.

The term “Motel” shall mean a building designed for

occupancy primarily as the temporary abiding place of

individuals who are lodged with or without meals, and

which is customarily designated as a motel.

The term “Motor Vehicle” or “Vehicle” shall include

every kind of vehicle used for transportation and con-

veyance and allowed for those uses on the highways of

the Commonwealth.

The term “Tourist Court” shall mean a group of

attached or detached buildings containing only individ-

ual sleeping rooms or living units, designed for tempo-

rary use by automobile tourists or transients; including

auto courts, motels, or motor lodges and the like.

The term “Trailer Park” shall mean any camp,

trailer, camp, trailer court, lot, parcel or tract of land

designed, maintained or intended for the purpose of sup-

plying a location or accommodation for two (2) or more

trailers. “Trailer Park” shall not include automobile or

trailer sales lots upon which unoccupied trailers are

parked for the purpose of inspection or sale.

(e) “Operator”—Any person conducting the opera-

tion of a parking place and charging and collecting the

consideration for the parking or storage of motor

vehicles at such parking place including, without limiting

60a Appendix F.

the generality of the above, any governmental body,

governmental subdivision, municipal corporation, public

authority, non-profit corporation, or any person so per-

forming as an agent of any of the above.

(f) “Patron”—any natural person who drives a vehi-

cle of his own or of another into and upon a non-

residential parking place, as herein defined, for the pur-

pose of having such vehicle parked or stored for any

length of time.

(g) “Person”—any natural person, partnership,

unincorporated association, or corporation, non-profit or

otherwise. Whenever used in any provision prescribing a

fine or penalty, the word “Person” as applied to

partnerships, shall mean and include all of the partners

thereof, as applied to unincorporated associations, shall

mean and include all of the members thereof, and as

applied to corporations, shall mean and include all

officials thereof.

(h) “School District”—Moon Area School District.

(i) “Transaction” -The parking or storing on a unit

per occurrence basis of a motor vehicle at a non-

residential parking place, and such parking or storing on

any other basis, and one consideration for the parking or

storing.

(j) Pronoun references shall be read and construed

as appropriate to the relevent circumstances.

SECTION 3. IMPOSITION AND PAYMENT OF Tax: For

the period of April 25, 1979 to June 30, 1979, and thereaf-

ter on the fiscal year basis of from each July 1 to each

following June 30, a tax for general revenue purposes is

hereby levied upon each and every patron for each and

every parking transaction at the rate of 15 per centum

Appendix F. 6la

(15%) on the consideration thereof. Every operator with

each transaction shall add said tax to the consideration

charged and shall obtain payment of said tax from the

patron as a condition for the allowance of the parking or

storing, and the fact of such allowance shall, and the fact

of collection of the consideration shall conclusively pre-

sume the collection of the tax.

SECTION 4. Parking Registration Certificates:

(a) On or after the effective date of this Resolution,

it shall be unlawful for any person and/or any operator

to conduct, continue to conduct, or thereafter begin to

conduct any parking transaction with reference to a non-

residential parking place within the School District until

or unless a Parking Registration Certificate or Certifi-

cates shall have been issued to said operator, and unless

the tax imposed hereunder is accounted for in accord-

ance with the provisions of this Resolution.

(b) Every person and/or operator desiring to con-

tinue to conduct or to begin to conduct any parking

transaction, with reference to a non-residential parking

place within the School District shall file annually an

application for Parking Registration Certificate or Certif-

icates for each parking place with the Collector. Every

application for such Certificate or Certificates shall be

made upon a form prescribed and furnished by the Col-

lector, and authorized by the Board of School Directors of

the School District. Such application shall set forth the

name under which the applicant conducts such parking

transactions, the location of the place of said parking

place, the size and vehicle capacity of said parking place,

and other such pertinent information as may be required

by the Collector. If the applicant has or intends to have

more than one place of such parking within the School

District, the applicant shall state the required informa-

62a Appendix F.

tion with respect to each and every such place of parking.

If the applicant is other than an individual, the names

and addresses of the principal officers thereof, and any

other reasonable information required by the Collector,

shall be stated in the application. The application shall

be signed and sworn to by the applicant. The Collector

may require that the application be verified by oath or

affirmation.

(c) Upon a proper application being made, the Col-

lector shall charge a registration and certificate fee of

Ten Dollars ($10.00) annually for each certificate which

shall be paid by the applicant and the Collector shall

grant and issue to such applicant a Parking Registration

Certificate for each place of non-residential parking as

set forth in the application. A Parking Registration Cer-

tificate shall not be assignable and shall be valid only for

the person and/or operator in whose name it is issued,

and it shall be valid only for the conducting of non-

residential parking at the place designated therein. Said

Parking Registration Certificate shall at all times be con-

spicuously displayed at the place for which issued.

(d) The Collector may suspend, or after hearing, re-

voke a Parking Registration Certificate whenever the

Collector finds that the holder thereof has failed to com-

ply with any provision of this Resolution. Upon suspend

ing or revoking any Parking Registration Certificate, the

Collector shall request the holder thereof to surrender

immediately all Parking Registration Certificates and

duplicates thereof. Whenever the Collector suspends a

Parking Registration Certificate, he shall notify the

holder thereof immediately of such action and shall af-

ford the holder a hearing, if one is desired and has not

already been afforded. After such hearing, the Collector

may either rescind his order of suspension, continue said

Appendix F. 63a

suspension, or revoke the Registration Certificate or Cer-

tificates.

SECTION 5. REcoRDs:

(a) Each operator shall maintain, separately with

respect to each parking place, complete and accurate

records of all transactions, of the total amount of consid-

eration received from all transactions, and the total

amount of tax collected on the basis of such considera-

tion, and the same shall be done on a uniform daily basis.

Each operator shall issue to the person paying the con-

sideration such written evidence of the transaction as the

Collector may prescribe by regulations.

(b) As to all transactions otherwise than on a unit

per occurrence basis, the Operator shall make, have and

keep segregated records of all such transactions, or if

oral, then do so by a record of relevant data as adequately

describes each such transaction for calculation of the

proper tax. Records shall be made at the time of the

transactions. They shall be kept in chronological order.

(c) Each Operator shall afford the Collector and his

designated agents and employees access to all such re-

cords and evidence at all reasonable times and shall pro-

vide verification of the same as the Collector may re-

quire. The Collector and his agents are hereby authorized

at reasonable times and in reasonable manner to exam-

ine the books, papers and records of any operator in

order to verify the accuracy of any return made.

(d) If no return has heen made, or if a false return

has been made, or if the operator’s records are not prop-

erly made or kept, or if the operator of anyone under his

control in any way obstructs an orderly audit or investi-

gation relating to the determination of the proper tax

due, then the Collector may make such assessment of

64a Appendix F.

what he reasonably determines to be the proper tax due,

and in addition to the penalty and interest thereon as

may be due, may add a liquidated damages assessment of

up to one hundred per centum (100%) of the proper tax,

and any fine as may be imposed under Section 9 shall be

in addition to the liabilities hereunder.

SECTION 6. RETURNS AND PAYMENTs: Each Opera-

tor in collecting the tax (under Section 3.) shall do so as

the agent and trustee for the School District under the

provisions and for the purposes hereof; and, on the form

prescribed by the Collector, shall file with him by the

15th day of each month, returns on all transactions of the

Operator in the preceding calendar month. With such

filing the Operator shall pay to the Collector all taxes

due hereunder for such preceding month, such “taxes

due” being the full tax that the Operator was charged

hereunder to obtain from his patrons less two per centum

(2%) thereof as compensation to the Operator for his

services. Every Operator who fails to comply with the

provisions hereof shall be deemed to have acknowledged

his intentional failure of consideration and of his volun-

tary surrender of such compensation.

SECTION 7. COLLECTOR’s POWERS AND DUTIEs:

The Collector, on behalf of the School District, shall re-

ceive and collect the taxes, interest, fines and penalties

imposed hereunder and shall have the power, in the

event that any Operator has, in the judgment of the

Collector, failed to pay over the amount of the tax due, to

collect the tax directly from the Patron and charge the

cost of collection to the Operator, and shall maintain

recorés showing the amounts received and the date such

amounts were received. The Collector shall, with the

approval of the Board of School Directors of the School

District, adopt and enforce regulations relating to the

Appendix F. 65a

administration of this Resolution, such regulations in-

cluding but not limited to those relating to evidence,

records, forms, applications, registration certificates and

returns.

SECTION 8. COLLECTION AND PENALTY AND INTER-

EsT: All taxes, assessments, penalties and interests due

from the Operators under this Resolution shall be paid to

the Collector. Any Operator who fails to file a proper

report as due or who fails to make proper payment as

due, shall pay also a penalty of an additional ten per

centum (10%) of the amount of the tax, and in addition,

shall pay interest on the tax at the rate of one per cen-

tum (1%) per month or fraction thereof from the due

date, the same being in addition to liabilities under Sec-

tion 5(d) and Section 9.

SECTION 9. PENALTIEs: Any person who violates

any provision of this Resolution, or any regulation

adopted pursuant to it shall, upon conviction thereof

before any magistrate, be liable for a fine not to exceed

more than Five Hundred Dollars ($500.00), or, in default

thereof shall be imprisoned for a period not to exceed

thirty (30) days. Each violation shall constitute a sepa-

rate offense. Such penalties so imposed shall be in addi-

tion to all other liabilities otherwise imposed under any

other of the provisions hereof, and shall be in addition to

any other liability that may be applicable under any

other provisions of law, civil, equity, and criminal.

SECTION 10. SEveRasBrLItTy: The provisions of this

Resolution are severable and if any of its provisions shall

be held invalid or unconstitutional, such decision shall

not effect or impair any of the remaining provisions of

the Resolution. It is hereby declared to be the intention

of the Board of School Directors of the School District

that this Resolution would have been adopted if such

66a Appendix F.

invalid or unconstitutional provision had not been in-

eluded herein.

SECTION 11. REPEALER: Any Resolution or any

part of any Resolution conflicting with the provisions of

this Resolution is rescinded insofar as such conflict ex-

ists.

SECTION 12. Errective Date: This Resob:tion

shall take effect April 25, 1979.

MOON AREA SCHOOL

DISTRICT

Adopted Mar. 26, 1979