                             [J-99-2018] [MO: Todd]
                   IN THE SUPREME COURT OF PENNSYLVANIA
                                MIDDLE DISTRICT


 S & H TRANSPORT, INC.,                       :   No. 8 MAP 2018
                                              :
                     Appellant                :   Appeal from the Order of the
                                              :   Commonwealth Court at No. 242 CD
                                              :   2017 entered October 5, 2017
              v.                              :   Reversing the Order of the Court of
                                              :   Common Pleas of York County, Civil
                                              :   Division, at No. 2012-SU-4143-54,
 CITY OF YORK,                                :   dated February 7, 2017, entered
                                              :   February 9, 2017.
                     Appellee                 :
                                              :   ARGUED: December 5, 2018


                     CONCURRING AND DISSENTING OPINION


JUSTICE BAER                                                  DECIDED: July 17, 2019
      While I concur with much of my colleagues’ reasoning, I respectfully dissent from

the Majority’s mandate and instead would affirm the Commonwealth Court’s conclusion

that S&H Transport, Inc. (S&H) is not entitled to deduct the challenged receipts prior to

calculating the amount it owed pursuant to the City of York’s Business Privilege and

Mercantile Tax (BPT).

      Specifically, I agree with the Majority’s conclusion that the relevant charges are

taxable gross receipts under Pennsylvania’s Local Tax Enabling Act because they are

not “charges advanced by a seller for freight, delivery or other transportation for the

purchaser in accordance with the terms of a contract of sale.”                  53 P.S.

§ 6924.301.1(f)(12)(ii). As ably explained by the Majority, the quoted freight delivery

exclusion is inapplicable because S&H is not a “seller” pursuant to “a contract of sale,”
which presupposes a sale of goods, rather than services, to a buyer. See Maj. Op. at 16-

17.

       I dissent, however, from the Majority’s conclusion that the portion of S&H’s receipts

remitted to the common carrier fall within the BPT’s freight delivery exclusion. Id. at 18-

19.   In relevant part, the BPT Regulation excludes from taxation “receipts which

constitute . .   .   [f]reight delivery or transportation charges paid by the seller for the

purchaser.” BPT Regulation § 206(j)(2). Similar to the analysis of the parallel provision

of the LTEA, the language of the City’s regulation contemplates that the “seller” is paying

the freight delivery charges for the tangible item that requires shipment to the “purchaser.”

S&H, however, is not selling something requiring shipping but instead is selling its

intangible freight brokerage services. Accordingly, I agree with the Concurring Opinion

of Chief Justice Saylor to the extent it concludes that the charges are not excluded under

either the LTEA or the BPT’s freight delivery exclusion. Concurring Op. at 1.

       Nevertheless, I disagree with the Chief Justice’s Concurrence in regard to his

conclusion that the amounts S&H paid to the common carrier for shipment should be

omitted from the calculation of taxable gross receipts as a pass-through payment. Id. at

2. Instead, I concur with the Majority’s analysis of that issue. Maj. Op. at 17-18. As noted

by the Majority, the BPT Regulation specifically defines “gross receipts” as the monies

received “without deduction” for the various expenses involved in producing the product

or performing the service. BPT Regulation § 201 (defining “gross receipts” to include

“[c]ash . . . received in exchange for merchandise sold or services performed . . . , without

deduction there from [sic] on account for costs of property or merchandise sold; materials,

labor or services furnished or used; interest or discount paid; or any other business related

expense . . . .”). Here, the amounts paid to the common carrier are integral to S&H’s




                                   [J-99-2018] [MO: Todd] - 2
performance of its freight brokerage services and thus should be included as a business

expense.

      In sum, I concur with Chief Justice Saylor’s conclusion in his concurrence that the

relevant receipts are not encompassed by the BPT Regulation’s freight delivery exclusion,

the Majority’s determination that they do not fall within the LTEA’s freight delivery

exclusion, and the Majority’s holding that S&H’s expenses should be included in their

gross receipts. Accordingly, I would affirm the Commonwealth Court’s holding that the

challenged receipts are subject to the City of York’s Business Privilege Tax.




                               [J-99-2018] [MO: Todd] - 3
