Public Parking Authority v. City of Pittsburgh

368 A.2d 925, 28 Pa. Commw. 329, 1977 Pa. Commw. LEXIS 658

• Court: Commonwealth Court of Pennsylvania
• Decided: January 27, 1977
• Docket: Appeal, No. 1796 C.D. 1975
• Status: Published

Opinions

Opinion by

Judge Crumlish, Jr.,

The City of Pittsburgh (City) has appealed an order of the Court of Common Pleas directing it to pay interest from the date of payment on monies which were paid pursuant to a subsequently invalidated local tax ordinance. Appellees¹ are operators of public parking facilities located within the City who paid, under protest, a 20 percent business privilege tax upon their gross receipts. The payments were made during 1970,1971 and 1972. The ordinance was then declared invalid by the Court of Common Pleas of Allegheny County² and we affirmed.³ Further review was denied by the Pennsylvania Supreme Court and United States Supreme Court. Demand for refund of taxes has been made.

The sole issue presented in this appeal is whether the court below was correct in concluding that interest on the tax refunds should be calculated from the date the taxes were paid.

Interest payable on refunds of the tax here involved depends upon the date the City erred in retaining the tax payments. In Cities Service Oil Co. v. Pittsburgh, 449 Pa. 481, 297 A.2d 466 (1972), our Supreme Court drew a distinction between cases where the amount of the refund rather than the tax itself is in issue and cases where the amount of a refund is not in issue because the tax itself is invalid. The Court held that:

In the former situation, the tax is valid and, therefore, there is not an improper detention until it is determined that the amount of the tax was incorrectly computed, requiring the lower court to establish the amount of the refund, interest accruing from the date of the lower court’s decision, e.g., a real estate tax based on an incorrect property assessment. However, where a taxpayer pays a specific sum of money under protest and it is later determined that the taxing authority had no right to demand payment of this tax, then the detention was improper from the date the tax was paid, interest accruing from that date provided a demand for refund has been made.

449 Pa. at 486, 297 A.2d at 469. (Citation omitted.)

Here, we apply the second Cities Service test. Gross receipts taxes were paid by Appellees under protest pursuant to a local tax ordinance which was later declared invalid and all Appellees have made, demands for refunds. Therefore, retention by the City was improper from the time each tax payment was made. Under these circumstances, we must conclude that, there being no statute, or public policy militating against it, Cities Service, supra, applies and Appellees are entitled to interest on the tax payments, to be calculated at the rate of six percent⁴, from the date of payment.

Affirmed.

Order.

And Now, this 27th day of January, 1977, the order of the Court of Common Pleas of Allegheny County ordering refund of taxes, plus interest at six percent (6%) per annum to be calculated from the date of payment of each installment of taxes, is hereby affirmed.

1 Appellees are: The Public Parking Authority of Pittsburgh, a municipal corporation; Associated Dry Goods Corp., a Virginia corporation and successor to Joseph Horne Co., a Pennsylvania corporation ; Gimbel Brothers, Inc., a Neve York corporation; The May Department Stores Co., a New York corporation; and Parking' Service Corporation, a Pennsylvania corporation.

2 City of Pittsburgh v. Public Parking Authority of Pittsburgh, No. 689 July Term, 1972, December 29, 1972.

3 City of Pittsburgh v. Public Parking Authority of Pittsburgh, 11 Pa. Commonwealth Ct. 442, 314 A.2d 887 (1974).

4 This interest rate was agreed upon between the City and Appellees and was the subject of a stipulation.