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Saulsbury v. Bethlehem Steel Co., 413 Pa. 316, 196 A.2d 664

Facts

On December 1, 1961, the City of Johnstown enacted an ordinance imposing a $10 occupational privilege tax on individuals earning $600 or more annually. The Borough of Franklin enacted a similar ordinance on March 1, 1962. Individuals employed in these municipalities filed separate actions challenging the validity of these ordinances, leading to judgments on the pleadings in favor of the plaintiffs, which the municipalities subsequently appealed.

On December 1, 1961, the City of Johnstown in Cambria County, pursuant to the authority given by the Act of June 25, 1947, P.L. 1145, as amended, 53 P.S. § 6851, enacted an ordinance levying an occupational privilege tax of $10.00 per annum for the year 1962, on every individual engaged in an occupation within the corporate limits of the city, whose gross earnings would amount to $600. or more during the year.

Issue

Did the ordinances imposing a tax on individuals earning $600 or more violate the Pennsylvania Constitution's requirement that taxes be uniform upon the same class of subjects?

Has Johnstown in imposing no tax upon persons who earn less than $600.00 from pursuit of their Johnstown occupations infringed the Pennsylvania Constitution's requirement that taxes be uniform upon the same class of subjects?

Rule

All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, as stated in Sections 1 and 2 of Art. IX of the Pennsylvania Constitution.

Sections 1 and 2 of Art. IX of the Constitution of Pennsylvania, P.S. require that ‘All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax.’

Analysis

The court determined that the tax imposed by the ordinances lacked uniformity because it was only applied to individuals earning more than $600, thereby exempting a portion of the class from taxation. The court emphasized that if a tax is levied on an occupational privilege, it must apply uniformly to all individuals sharing that privilege, and the ordinances did not meet this requirement.

Therefore, the tax levied by the ordinances before us lacks uniformity and is in violation of the constitutional provision. While different subjects may be reasonably classified for tax purposes, there must be no lack of uniformity within the class, either on the given subject of the tax or the persons affected as payers.

Conclusion

The Supreme Court affirmed the lower court's ruling that the ordinances were void due to their lack of uniformity, thus restraining the collection of the tax.

Judgments and orders affirmed. Costs on appellants.

Who won?

The plaintiffs prevailed in the case because the court found the ordinances unconstitutional for failing to meet the uniformity requirement of the Pennsylvania Constitution.

The municipalities filed separate appeals. Since the same legal questions are involved, it was agreed that the cases should be considered and disposed of together.

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