IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Mid-Atlantic Systems of WPA, Inc., :

Appellant :

 :

v. : No. 588 C.D. 2018

 : Submitted: February 11, 2019

The Tax Office of the Municipality :

of Monroeville :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE ROBERT SIMPSON, Judge

HONORABLE P. KEVIN BROBSON, Judge

OPINION BY

JUDGE COHN JUBELIRER FILED: March 4, 2019

Mid-Atlantic Systems of WPA, Inc. (Mid-Atlantic) appeals from the March 

27, 2018 Order of the Court of Common Pleas of Allegheny County (common pleas) 

denying Mid-Atlantic’s appeal from the Decision of a Tax Hearing Officer (THO) 

of the Tax Office of the Municipality of Monroeville (Tax Office). The THO denied 

Mid-Atlantic’s Consolidated Tax Appeal and Petition for Refund of Business 

Privilege Taxes for Tax Years 2012 to 2016 (Tax Appeal) and found that MidAtlantic owed $51,712.15 in additional Business Privilege Taxes (BPT), penalties, 

and interest. On appeal, Mid-Atlantic argues the Municipality of Monroeville

(Monroeville) cannot assess the BPT against it because Monroeville is precluded 

from doing so by Section 12 of the Home Improvement Consumer Protection Act1

 

1 Act of October 17, 2008, P.L. 132, 73 P.S. § 517.12 (providing for the preemption of 

local registration, licensing, or fee requirements by a political subdivision for home improvement 

contractors that are licensed under the Home Improvement Consumer Protection Act).
2

(HICPA) and Subsections 301.1(f)(1) and (f)(11) of the Local Tax Enabling Act2

(LTEA). Mid-Atlantic further asserts that, because Monroeville’s taxing scheme as 

applied to it is invalid under HICPA and the LTEA, that scheme violates the 

Uniformity Clause of the Pennsylvania Constitution3 and the Equal Protection 

Clause of the United States Constitution.4 Finally, Mid-Atlantic seeks the abatement 

of the penalties, interest, and costs as permitted by Monroeville’s BPT Regulations. 

Discerning no error, we affirm.

I. Background

A. Monroeville’s BPT Ordinance and Regulations 

Section 3.A of Monroeville’s Ordinance 2329 (BPT Ordinance), enacted 

pursuant to the LTEA, assesses “an annual tax . . . on each dollar of volume of the 

gross annual receipts” on “[e]very person engaging in any business in the 

Municipality . . . .” (Reproduced Record (R.R.) at 97a.) The BPT “is a tax on the 

privilege of doing business in . . . Monroeville.” (Id. at 122a.) For corporations, the 

BPT is calculated on the corporation’s gross receipts. (Id. at 121a.) In order to 

ascertain what businesses are subject to the BPT, Monroeville’s BPT Regulations 

state that anyone “desiring to do business in . . . Monroeville [is] required to obtain 

a business privilege . . . license (business license) . . . .” (Id. at 110a; see also Section 

5 of the BPT Ordinance, R.R. at 98a.) To obtain a business license, Monroeville

 

2 Act of December 31, 1965, P.L. 1257, as amended, 53 P.S. § 6924.301.1(f)(1), (11) 

(relating to the delegation of taxing powers to local municipalities and exceptions from those 

taxes).

3 Article VIII, section 1 of the Pennsylvania Constitution, Pa. Const. art. VIII, § 1 (requiring 

uniformity in taxation).

4 Fourteenth Amendment to the United States Constitution, U.S. Const. amend. XIV 

(providing, in relevant part, that a state shall not “deny to any person within its jurisdiction the 

equal protection of the laws”).
3

requires the completion and filing of a business registration form with Monroeville’s 

Tax Collector and payment of a yearly fee of $25.00. (R.R. at 113a.) If a business 

owes taxes to Monroeville, including the BPT, no license will be issued. (Id.) An

entity that engages in business in Monroeville without obtaining a license can be 

subject to a penalty and fine. (Id. at 116a.) 

B. Monroeville’s Assessment of the BPT Against Mid-Atlantic

Mid-Atlantic is a Pennsylvania corporation that “improv[es] real property 

through customization, installation and application of basement waterproofing 

materials, technologies and techniques.” (Common Pleas 1925(a) Opinion (1925(a) 

Op.) at 2.) It began its business operations in Monroeville on March 1, 2012, and 

this location is its principal place of business. Mid-Atlantic registered with the Tax 

Collector, obtaining a business license and paying the annual business license fee 

for the tax years 2012 through 2016 (Reassessment Years). It also filed BPT returns 

and paid that tax in the Reassessment Years. In August 2016, the Tax Office 

requested Mid-Atlantic to provide records of its gross receipts for the Reassessment

Years. Upon reviewing those records, the Tax Office issued Notices of Assessment, 

assessing additional BPTs, penalties, and interest based on Mid-Atlantic’s purported 

failure to report all of its gross receipts. After an informal conference to discuss 

excluding Mid-Atlantic’s gross receipts from the BPT and an abatement, the Tax 

Office rejected Mid-Atlantic’s arguments and abatement request.

Mid-Atlantic filed an appeal with the Tax Office.5 The Tax Office requested 

that Mid-Atlantic submit additional records to support claims made in that appeal. 

 

5 Mid-Atlantic filed one petition on November 17, 2016, and a supplement to that petition 

on December 13, 2016. (R.R. at 3a-86a.)
4

Thereafter, the Tax Office issued Revised Notices of Assessment, which reflected 

adjustments based on the additional records:

BPT

Year Reported Adjusted

Additional 

Assessed Penalties Interest Total

2012 $0.00 $3,818.07 $3,818.07 $1,164.51 $1,164.51 $6,147.09

2013 $74.95 $4,581.69 $4,506.74 $1,104.15 $1,104.15 $6,715.04

2014 $179.88 $9,450.79 $9,270.91 $1,715.12 $1,715.12 $12,701.15

2015 $205.81 $11,382.12 $11,176.31 $1,397.04 $1,397.04 $13,970.39

2016 $0.00 $10,277.42 $10,277.42 $668.03 $668.03 $12,178.48

Total $460.64 $39,510.09 $39,049.45 $6,048.85 $6,048.85 $51,712.15

(R.R. at 174a (emphasis in original).) Mid-Atlantic timely filed a BPT return for 

2017 and paid $6,056 under protest. 

C. Mid-Atlantic’s Tax Appeal and the THO’s Decision

On July 31, 2017, Mid-Atlantic filed the Tax Appeal,

6 asserting Monroeville 

improperly assessed the BPT against it. Therein, it sought relief related to the 

Reassessment Years (2012-2016).7 Mid-Atlantic first argued that Monroeville could 

not assess the BPT and related penalties and interest against Mid-Atlantic because

Monroeville was preempted from doing so by Section 12 of HICPA, which states 

that “[r]egistration under [HICPA] shall preclude any requirement of payment of a 

 

6

It appears that the Tax Appeal is the same appeal as that filed in November and December 

2016.

7 Mid-Atlantic included the 2017 tax year in its appeal to common pleas of the THO’s 

decision. (R.R. at 171a.) 
5

fee or registration or licensing of any home improvement contractor by any political 

subdivision,” 73 P.S. § 517.12. Mid-Atlantic asserted it could not be made to pay 

the BPT because doing so required it to register and obtain a license from 

Monroeville. 

The THO rejected this argument, holding there is a distinction between the 

licensing or registration of an entity or person and the taxation of the privilege of 

doing business within a municipality under the LTEA. (Decision at 3.) The 

assessment of the BPT and the related registration/licensing requirement on MidAtlantic, the THO reasoned, was not based on Mid-Atlantic’s status as a home 

improvement contractor or the intention of regulating Mid-Atlantic’s contracting 

business, but on the privilege of Mid-Atlantic conducting its business operation 

within Monroeville. The BPT and the registration/licensing requirements, the THO 

explained, were “imposed upon all business enterprises in [Monroeville] which may 

be lawfully subject to the tax pursuant to the LTEA.” (Id. (emphasis added).) 

The THO additionally rejected Mid-Atlantic’s attempt to “bootstrap” the 

HICPA’s prohibition against local registration and licensing of home improvement 

contractors to the assessment of the BPT. The THO concluded this argument was

not supported by the Supreme Court’s decision in City of Philadelphia v. Clement & 

Muller, Inc., 715 A.2d 397, 398 (Pa. 1998), which described the boundaries of 

preemption. (Decision at 4.) The THO observed that, even if Monroeville’s 

licensing/registration scheme was preempted, this did not lead to the conclusion that 

Mid-Atlantic was not subject to the BPT. According to the THO, the intended target 

of Section 12 of HICPA was clear on its face and was limited to the registration and 

licensing of home improvement contractors in order to regulate those entities’ 

construction activities. Because of that clear target, the “permitted” “outer bounds”
6

of that preemption could be determined and did not include the preemption of the 

assessment of a BPT. (Id. (citing City of Philadelphia, 715 A.2d at 398).) 

Mid-Atlantic next argued it does not have to pay the BPT, citing Subsections 

301.1(f)(1) and (f)(11) of the LTEA. Subsection (f)(1), Mid-Atlantic asserted, 

excepts certain activities “from any tax . . . on a privilege, . . . subject, [or] occupation 

. . . which is now or does hereafter become subject to a State tax or license fee,” 

53 P.S. § 6924.301.1(f)(1) (emphasis added), and, citing National Biscuit Co. v. City 

of Philadelphia, 98 A.2d 182 (Pa. 1953) (National Biscuit), Mid-Atlantic claimed

the fee it pays under HICPA is the type of “State tax or license fee” that falls under 

this exception. Subsection (f)(11) likewise supported an exception here, MidAtlantic argued, because that provision precludes taxation “on the construction of or 

improvement to residential dwellings . . . ,” 53 P.S. § 6924.301.1(f)(11), and MidAtlantic provides these services.

The THO was unpersuaded by Mid-Atlantic’s arguments and held that 

National Biscuit, as well as School District of City of Scranton v. Dale and Dale 

Design Development, Inc., 741 A.2d 186 (Pa. 1999) (Dale and Dale), and 

Middletown Township v. Alverno Valley Farms, 524 A.2d 1039 (Pa. Cmwlth. 1987), 

did not support Mid-Atlantic’s asserted exceptions under the LTEA. National 

Biscuit, the THO concluded, held that not all State licensing or registration fees are 

true licensing fees that support a preemption or tax exception claim. Relying on the 

factors used by the Supreme Court in National Biscuit, such as the amount of the 

asserted fee, the nature of the fee, and the fee’s purpose, the THO concluded that the 

HICPA registration fee is not a true license fee. As for the exception for construction 

and improvement to residential dwellings, the THO noted that both the Supreme 

Court, and this Court, rejected similar arguments in Dale and Dale and Alverno 
7

Valley Farms, respectively. The THO observed that the Supreme Court in Fish v. 

Township of Lower Merion, 128 A.3d 764, 770 (Pa. 2015), recently reiterated that 

“business privileges and transactions are separate and distinct subjects of taxation”

and that the former could be taxed by a municipality under the LTEA. (Decision at 

6 (quoting Fish, 128 A.3d at 770).) These decisions, the THO reasoned, supported 

Monroeville’s assessment of the BPT on Mid-Atlantic.

Mid-Atlantic next argued that “[i]n addition to violating the HICPA, 

Monroeville’s business registration, licensing and taxation regime violates the 

Uniformity Clause of the Pennsylvania Constitution” “and the Equal Protection 

Clause of the United States Constitution . . . by resulting in the unequal treatment of 

a whole class of taxpayers, home improvement contractors.” (Tax Appeal at 4, R.R. 

at 65a.) Reviewing Mid-Atlantic’s argument, the THO found that Mid-Atlantic

“offer[ed] no specifics on precisely how these constitutional infirmities arise, only 

stating their existence in conclusory fashion,” nor did it provide a “specific 

explanation to support it[s] assertion that [Monroeville’s] business registration, 

licensing and taxation scheme is unconstitutional.” (Decision at 6-7.) Absent the 

averment of such facts, the THO held that Mid-Atlantic had not sustained its burden 

of establishing that Monroeville’s assessment of the BPT “clearly, palpably and 

plainly violate[d] the Constitution.” (Decision at 7 (citing City of Allentown v. MSG 

Assocs., Inc., 747 A.2d 1275 (Pa. Cmwlth. 2000); D/K Beauty Supply, Inc. v. N. 

Huntingdon Twp., 446 A.2d 986 (Pa. Cmwlth. 1982)).) 

For these reasons, the THO denied Mid-Atlantic’s Tax Appeal. (Decision at 

7-8.) 
8

D. Mid-Atlantic’s Appeal to Common Pleas

Mid-Atlantic appealed to common pleas, which affirmed the THO’s Decision. 

After filing an appeal with this Court, Mid-Atlantic filed, at common pleas’ 

direction, a Concise Statement of Errors Complained of on Appeal (Statement) 

pursuant to Rule 1925(b) of the Pennsylvania Rules of Appellate Procedure, 

Pa.R.A.P. 1925(b). After reviewing the Statement, common pleas issued its 1925(a) 

Opinion, in which it held that the THO’s findings were supported by substantial 

evidence, all local procedures were followed, and the THO did not err or violate the 

Constitutions by denying the Tax Appeal. Common pleas, therefore, adopted as its 

own the THO’s findings, conclusions, and analysis for denying the Tax Appeal. 

Mid-Atlantic now appeals to this Court, reiterating many of the same arguments.

8

II. Mid-Atlantic’s Appeal to this Court

A. Section 12 of HICPA

Mid-Atlantic first argues, as a matter of first impression, that Section 12 of 

HICPA “prohibits Monroeville from imposing any registration or licensing 

requirements on Mid-Atlantic.” (Mid-Atlantic’s Brief (Br.) at 9 (emphasis added).) 

This prohibition, Mid-Atlantic argues, extends to the assessment of the BPT because, 

under the BPT Regulations, the payment of the BPT is inseparable from a business’s 

obligation to register with and obtain a license from Monroeville. Because it cannot 

be required to register and obtain a license from Monroeville under HICPA, MidAtlantic maintains it cannot be subject to the BPT. Further, Mid-Atlantic argues 

 

8

“In reviewing [common pleas’] decision in a tax assessment appeal, we will reverse that 

decision only if [common pleas] committed an abuse of discretion, [or] an error of law, or where 

its decision is unsupported by the evidence.” Douglass Vill. Residents Grp. v. Berks Cty. Bd. of 

Assessment Appeals, 84 A.3d 407, 408 n.3 (Pa. Cmwlth. 2014). 
9

common pleas erred by finding that the BPT was enforceable against it as a 

“permitted” “outer bounds” under City of Philadelphia, 715 A.2d at 398.

Tax Office acknowledges that local taxation cannot intrude into preempted

areas, but argues that the legislature is not presumed to have preempted an entire 

area simply by legislating therein. Rather, the legislature must show an intent to 

preempt that field and, contrary to Mid-Atlantic’s assertions, neither HICPA 

generally, nor Section 12 particularly, reflect an intent to preempt the assessment of 

local taxes on home improvement contractors. Instead, the scope of Section 12’s 

preemption, Tax Office argues, is clear on its face and is aimed at registering home 

improvement contractors for the purposes of regulating their operational conduct. 

According to Tax Office, the purpose of the “informational registration” that 

Monroeville requires all business entities operating within its boundaries to undergo 

is to obtain the information necessary for it to exercise its taxing power, not to 

control the operational activities of those businesses.9 

The doctrine of preemption “provides, generally, that when the legislature has 

preempted a field the state has retained all regulatory and legislative power for itself 

and therefore prohibits local legislation in that area.” Nutter v. Dougherty, 938 A.2d 

401, 406 (Pa. 2007) (internal quotation marks omitted). Preemption “is the 

exception, not the rule,” and “[p]reemption does not result simply because the 

General Assembly legislates in the field; rather, the legislature must manifest its 

intent entirely to preempt that field.” Id. Thus, “absent a pervasive regulation of 

every aspect of an industry or profession, the preemption doctrine does not apply.” 

 

9 Alternatively, Tax Office argues that, even if the registration requirements were 

preempted as to home improvement contractors, such provisions are severable from the tax 

provisions pursuant to Section 11(C) of the BPT Ordinance. However, because of our disposition, 

we need not discuss Tax Office’s alternative argument.
10

Rose View Manor, Inc. v. City of Williamsport, 630 A.2d 474, 477 (Pa. Cmwlth. 

1993) (emphasis added). On the issue of preemption and the assessment of local 

taxes, the Supreme Court has explained:

There is generally no difficulty of application where a statute explicitly 

removes a given subject from local control. Similarly, where some 

local regulation is permitted its outer bounds can usually be clearly 

determined; municipal ordinances are valid if they are not contradictory 

to or inconsistent with the statutory law. In such situations any 

questions are readily resolved because, almost by definition, the 

intention of the General Assembly is plain. Difficulties arise only when 

the legislative intent is not explicit but must be inferred.

[In] Western Pennsylvania Restaurant Association v. Pittsburgh, [77 

A.2d 616, 619-20 (Pa. 1951), the Supreme Court] offered the following 

analytical outline:

the question whether municipal action is permissible must 

be determined by an analysis of the provisions of the act 

itself in order to ascertain the probable intention of the 

legislature in that regard . . . . [I]f the general tenor of the 

statute indicates an intention on the part of the legislature 

that it should not be supplemented by municipal bodies, 

that intention must be given effect and the attempted local 

legislation held invalid.

City of Philadelphia, 715 A.2d at 398 (last alteration in the original). In local tax 

preemption cases, this Court has cautioned that “courts should be hesitant to expand 

the preemption doctrine and declare industries off limits to local taxation because 

such a declaration further erodes the tax base of local taxing bodies forcing those 

entities to increase the tax burden on other taxpayers.” Rose View Manor, 630 A.2d 

at 477.

Absent from HICPA is any explicit language addressing the subject of the 

taxation, let alone completely removing that subject from the authority of local 
11

municipalities. Therefore, this is not a matter of express preemption. See id.at 478

(noting that because the asserted state laws were “silent on the issue of taxation” 

they “contain[ed] no express prohibition or permission”). Because there is no 

express preemption, we must determine whether, in enacting Section 12, the 

legislature had the probable intention of prohibiting the assessment of BPTs against 

home improvement contractors that operate a business within a political subdivision 

that collects a business’s tax information via a registration or licensing process. 

HICPA was enacted in 2008 with the purpose of protecting consumers from 

a variety of fraudulent and deceptive practices by home improvement contractors. 

To meet that purpose, HICPA requires home improvement businesses wishing to 

conduct home improvement activities on private residences in Pennsylvania to 

register with the Bureau of Consumer Protection (Bureau), which maintains a 

database of registered contractors. Section 3 of HICPA, 73 P.S. § 517.3. HICPA 

further governs the contents of home improvement contracts and how those contracts 

can be enforced, creates the offense of “[h]ome improvement fraud” and directs who 

may prosecute that offense, sets forth what acts are prohibited under HICPA,10 and 

provides that a violation of HICPA is a violation of the Unfair Trade Practices and 

Consumer Protection Law.11 Sections 7-10 of HICPA, 73 P.S. §§ 517.7-517.10. 

Section 12 prohibits political subdivisions from registering, licensing, or 

charging a fee on any “home improvement contractor” registered under HICPA. 73 

P.S. § 517.12. This is consistent with the general tenor of HICPA, which focuses on 

 

10 Prohibited acts include: failing to register with the Bureau; failing to issue refunds under 

the enumerated circumstances; abandoning or failing to perform under a home improvement 

contract; deviating from the plans or specifications without a signed change order; advertising to 

perform home improvements if the person does not intend to do so; or demanding or receiving 

payment before a contract is signed. Section 9 of HICPA, 73 P.S. § 517.9.

11 Act of December 17, 1968, P.L. 1224, as amended, 73 P.S. §§ 201-1—201-9.3.
12

consumer protection, the creation of a centralized database of registered home 

improvement contractors to be used by consumers for informational purposes, and 

the punishment of contractors that engage in fraudulent or prohibited acts. To 

register under HICPA, contractors are required to provide the Bureau with certain 

information regarding their business, such as contact information, the names and 

addresses of each principal, the names and addresses of any prior home contractor 

businesses operated, and the names of any business registered or licensed in other 

jurisdictions. Sections 3 and 4 of HICPA, 73 P.S. §§ 517.3, 517.4. By prohibiting 

the imposition of additional registration, licensing, or fees by political subdivisions, 

consumers are not forced to go to multiple sources for information and contractors 

are not burdened by multiple and/or differing registration requirements and fees.

12

As the emphases of HICPA are on ensuring that the relationship between the 

consumer and home improvement contractor is fair and protecting consumers from

fraud, among other problems, it cannot be said to “pervasive[ly] regulate[] . . . every 

aspect of [the home improvement contractor] industry or profession.” Rose 

View Manor, 630 A.2d at 477 (emphasis added). Accordingly, Section 12 relates to 

the local registration or licensing of a “home improvement contractor” for the 

purpose of regulating the home improvement activities the contractor may conduct 

within the political subdivision for consumer protection purposes. 

The “registration” and “licensing” provisions complained of here are not 

prompted by Mid-Atlantic’s status as “a home improvement contractor,” but by MidAtlantic’s operation of a business in Monroeville. All businesses operating in 

 

12 Section 12 thereby addressed a concern, expressed prior to HICPA’s passage, about the 

number of municipalities with which home improvement contractors had to register. H. 192nd 

Sess., Oct. 8, 2008, at 2292-93, available at https://www.legis.state.pa.us/WU01/LI/HJ/2008/0/

20081008.pdf (last visited Feb. 13, 2019).
13

Monroeville are required to register with and obtain a business license from the Tax 

Collector, (Section 5 of the BPT Ordinance, R.R. at 98a), and Monroeville is treating 

Mid-Atlantic as it would any other business operating within its boundaries. Unlike 

HICPA’s registration, which requires a significant amount of information about the 

home improvement contractor, its principals, and its business history, see 73 P.S. 

§§ 517.3-517.4, Monroeville’s registration requires only a business’s name, address, 

business address, tax identification number, and a description of the type of business 

in which it is engaged, (Section 5 of the BPT Ordinance, R.R. at 98a). Permitting

Monroeville to require Mid-Atlantic, the business, to register and obtain a license

so that Monroeville may assess the BPT, is not inconsistent or in conflict with 

Section 12’s prohibition against Monroeville requiring Mid-Atlantic, the home 

improvement contractor, to register and obtain a license in order for Mid-Atlantic 

to perform those construction activities within Monroeville. As such, Monroeville’s 

registration and licensing requirements fall within the “permitted” “outer bounds”

of local registration of home improvement contractors. City of Philadelphia, 715 

A.2d at 398. Accordingly, we do not read Section 12 as evidencing a probable 

intention by the legislature to prohibit the general business registration or licensing 

of a home improvement contractor by a political subdivision for the sole purpose of 

allowing the exercise of its taxing authority under the LTEA.

This conclusion is consistent with our Supreme Court’s decision in National 

Biscuit. Relevant to this issue, our Supreme Court explained in National Biscuit that

the $3.00 mercantile license fee businesses operating in the City of Philadelphia

(City) had to pay to obtain a mercantile license, which was used for the purpose of 
14

assessing the City’s equivalent of a BPT,

13 was not a license fee. 98 A.2d at 189. 

Instead, it was “a mere registration charge designed to inform the [C]ity of the 

identity of those liable for the payment of the tax.” Id. at 189 n.4. In essence, the 

fee was charged to cover the clerical expenses of registration and issuing the 

mercantile license certificate. Id. at 189. Similar to the situation in National Biscuit, 

all businesses operating in Monroeville must register with the Tax Collector and pay 

a yearly $25.00 fee to obtain a business license. (R.R. at 113a.) This business license 

is used “to inform [Monroeville] of the identity of those liable for the payment of 

the tax” and the fee to cover the costs associated with registration. National Biscuit,

98 A.2d at 189 n.4. Monroeville’s collection of this information and a registration 

fee for tax purposes is not inconsistent or in conflict with Section 12 and, therefore, 

is not preempted by that provision.

It is also consistent with this Court’s limited application of the preemption 

doctrine in local tax cases. This Court has found few areas that have been so 

pervasively regulated as to reflect the legislature’s intent to preempt any local 

taxation, which include harness racing and liquor. Rose View Manor, 630 A.2d at 

477. Other areas found not to be subject to such pervasive regulation include: the 

licensing and regulation of the nursing home industry under the Pennsylvania Health 

Care Facilities Act14 and the Department of Health’s corresponding regulations, Rose 

View Manor, 630 A.2d at 477-78; the licensing and professional regulation of 

lawyers by the Supreme Court, Rieders, Travis, Mussina, Humphrey & Harris v. 

 

13 The issues in National Biscuit involved whether the mercantile license tax, assessed 

against all qualifying businesses operating within the City for the privilege of those operations and 

calculated on the businesses’ gross receipts, was preempted by various state taxes or licensing fees. 

98 A.2d at 184-85.

14 Act of July 19, 1979, P.L. 130, as amended, 35 P.S. §§ 448.101–448.904b. 
15

City of Williamsport, 578 A.2d 618, 619-20 (Pa. Cmwlth. 1990); and the licensing

and professional regulation of real estate agents under the Real Estate Licensing and 

Registration Act,15 Helsel, Inc. v. City of Harrisburg, 564 A.2d 546, 547 (Pa. 

Cmwlth. 1989). The regulation of the relationship between consumers and home 

improvement contractors under HICPA is no more pervasive than these other areas 

and, therefore, we apply the holdings of Rose View Manor, Rieders, and Helsel to 

conclude that Section 12 of HICPA does not preempt the assessment of the BPT 

here.

B. Section 301.1(f) of the LTEA

Mid-Atlantic next asserts that Monroeville is precluded by Subsections

301.1(f)(1) and 301.1(f)(11) from assessing the BPT against it. As a preliminary 

issue, we note Mid-Atlantic characterizes these provisions as exceptions and, 

therefore, as having to be strictly construed against the taxing authority. Lynnebrook 

& Woodbrook Assocs., L.P. v. Borough of Millersville, 963 A.2d 1261, 1265-66 (Pa. 

2008). In contrast, Tax Office characterizes these provisions as exemptions, which 

would be interpreted against the taxpayer. Our Supreme Court has recognized that 

the exclusions set forth in Section 301.1(f) are exceptions, and, therefore, those 

provisions must be strictly construed against the taxing authority. Fish, 128 A.3d at 

766, 769; Lynnebrook, 963 A.2d at 1266.

1. Subsection 301.1(f)(1)

Mid-Atlantic maintains that it is subject to a “State tax or license fee” on its 

construction business because it pays licensing fees to the Bureau pursuant to 

HICPA and, therefore, Monroeville cannot “assess and collect . . . any tax . . . on 

 

15 Act of February 19, 1980, P.L. 15, as amended, 63 P.S. §§ 455.101–455.902.
16

[its] privilege . . . [or] occupation.” 53 P.S. § 6924.301.1(f)(1). These fees, 

according to Mid-Atlantic, cover administrative costs but also “raise revenue to 

enforce the provisions of [HICPA] and to provide for consumer education and other 

programs.” (Mid-Atlantic’s Br. at 12 (citing Section 5(b) of HICPA, 73 P.S. 

§ 517.5(b)).) It further maintains that HICPA’s scope and regulation of home 

improvement contractors is broad and encompassing, and its specific language 

preempting local registration and licensing reflects the legislature’s intent that the 

only regulation of home improvement contractors should be by the state. Thus, it 

asserts, the HICPA fee it pays is a true licensing fee that, pursuant to National 

Biscuit, preempts the imposition of local taxes on its business, and common pleas 

erred in holding otherwise. 

Tax Office argues that the fee Mid-Atlantic pays pursuant to Section 5 of 

HICPA, 73 P.S. § 517.5, is not a true licensing fee that would preclude Monroeville 

from assessing the BPT against Mid-Atlantic under Subsection 301.1(f)(1). Tax 

Office maintains that National Biscuit does not support Mid-Atlantic’s arguments, 

but the determination of the THO and common pleas that Subsection 301.1(f)(1) 

does not apply here. It notes that the HICPA fee, even if paid by large numbers of 

home improvement contractors, is insufficient to finance the total regulation of the 

home improvement industry. The HICPA fee, Tax Office argues, is like the fee paid 

by realtors to their state regulators, which has been found not to preclude the 

imposition of the BPT under Subsection 301.1(f)(1). Helsel, 564 A.2d at 547.

Subsection 301.1(f)(1) provides that “local authorities shall not have authority 

by virtue of this act” “[t]o levy, assess and collect or provide for the levying, 

assessment and collection of any tax on . . . a privilege, transaction, subject, 

occupation or personal property which is now or does hereafter become subject to a 
17

State tax or license fee.” 53 P.S. § 6924.301.1(f)(1). In considering whether a local 

BPT violates this provision, our Courts have applied two tests: (1) the true licensing

fee test; and (2) the duplicative tax test. Rose View Manor, 630 A.2d at 475-76. 

Under the true licensing fee test, we review “whether a charge exacted by the 

Commonwealth and designated as a license fee is really a ‘true license fee,’” the 

distinguishing features of which 

are (1) that it is applicable only to a type of business or 

occupation which is subject to supervision and regulation 

by a licensing authority under its police power; (2) that 

such supervision and regulation are in fact conducted by 

the licensing authority; (3) that the payment of the fee is a 

condition upon which the licensee is permitted to transact 

his business or pursue his occupation; and (4) that the 

legislative purpose in exacting the charge is to reimburse 

the licensing authority for the expense of the supervision 

and regulation conducted by it. If, therefore, even though 

the charge be labeled a “license fee,” it cannot be regarded 

as such if, being merely nominal in amount and not 

apparently equated to the probable cost of supervision and 

regulation of the licensee’s activities, it presumably was 

not legislatively intended to provide for such a cost; in 

such a case it must be considered as merely a registration 

charge intended to cover clerical costs of the issuance of 

the license certificate and general office expenses, and in 

that event it does not, of course, prevent municipal 

taxation . . . .

Id. at 475 (quoting National Biscuit, 98 A.2d at 188). In determining whether a fee 

is a true licensing fee, rather than a registration charge covering clerical costs, the 

Supreme Court looked to, among other factors, the amount of the fee, whether that 

fee was a flat fee or a graduated fee based on the volume of business in which the 

purported licensee engaged, and whether the charged fee was likely to cover the 

level of regulation imposed by the statute. National Biscuit, 98 A.2d at 188-90. 
18

The duplicative tax test involves “determin[ing] whether a local tax duplicates 

a Commonwealth tax,” or license fee and, to do so, “the incidence of each tax must 

be examined to determine if the subject matter embraced by each tax and the tax 

base to which each is applied is duplicative.” Rose View Manor, 630 A.2d at 476. 

“If the Commonwealth and local taxes are applied to different subject matter and to 

a different tax base there is no duplication.” Id. We applied this test in Helsel to 

determine whether the City of Harrisburg could impose a BPT against a real estate 

agent who argued that the biannual license fee the agent paid to the Commonwealth 

precluded the imposition of local taxes. 564 A.2d at 546, 548. In comparing the 

state licensing fee and the local tax, we held that “it [was] readily apparent that the 

nature of the taxes are so different that they are not duplicative.” Id. at 548. We 

likewise applied it in Rose View Manor and came to the same conclusion after 

reviewing the licensing fee a nursing home paid to the Commonwealth and the BPT 

the nursing home was challenging. 630 A.2d at 477.

The THO and common pleas applied the true licensing fee test, and the parties 

agree that the true licensing fee test applies to this appeal. While the true licensing 

fee test and duplicative tax test “are different, they are not inapposite,” id. at 476, 

and the application of either test in this matter results in the same outcome. The 

HICPA fee charged to register home improvement contractors is more akin to a 

registration fee, rather than a true license fee as defined in National Biscuit, and the 

BPT is not duplicative of the HICPA fee because the incidences of taxation are 

different. 

Initially, we note that HICPA does not designate the fee paid by home 

improvement contractors subject to its provisions a “license fee.” HICPA’s statutory 

language speaks in terms of the “registration,” not licensing, of home improvement 
19

contractors. See, e.g., Sections 2, 3, 4, and 6 of HICPA, 73 P.S §§ 517.2 (defining 

“Certificate” as “[a] certificate of registration”), 517.3 (“Registration of 

contractors”), 517.4 (“Procedures for registration as a contractor”), 517.6 (“Proof of 

Registration”). This is consistent with a frequent theme that arose during the debate 

on HICPA: that HICPA was about registering, not licensing, home improvement 

contractors. H. 192nd Sess. (House Legislative Journal), Oct. 7, 2008, at 2196, 

2198; House Legislative Journal, Oct. 8, 2008, at 2293.16 However, we will not rely 

solely on the nomenclature of the HICPA fee to decide whether it is a true licensing 

fee. 

The initial HICPA application fee is $50.00 and the subsequent renewal fees 

are $50.00 biennially, which makes this fee the equivalent of a $25.00 yearly fee.

Section 5(a) of HICPA, 73 P.S. § 517.5(a). This fee is regardless of the size of the 

home improvement contractor, the volume of that contractor’s business, the amount 

of advertising in which it engages, or the number of consumer contracts into which 

it enters. A true licensing fee is intended to cover “the probable cost of supervision 

and regulation of the licensee’s activities,” National Biscuit, 98 A.2d at 188, and it 

is unlikely that the legislature could have intended that this small, flat fee was 

responsible for covering the costs associated with regulating and enforcing HICPA’s 

provisions. This is borne out by Section 5(b) of HICPA, which provides that this 

fee, along with the penalties collected, are deposited into a “Home Improvement 

Account,” the funds of which may be used for enforcement and educational

purposes. 73 P.S. § 517.5(b). Our Supreme Court has explained that “[a] license 

fee cannot be conjured up merely by aggregating a number of registration fees,” but 

is based on “the unit fee imposed” because as the number of licenses increases, the 

 

16 Available at https://www.legis.state.pa.us/WU01/LI/HJ/2008/0/20081007.pdf and 

https://www.legis .state.pa.us/WU01/LI/HJ/2008/0/20081008.pdf (last visited Feb. 13, 2019).
20

amount of regulation likewise grows. National Biscuit, 98 A.2d at 190 (internal 

quotation marks omitted). Given the small amount of the HICPA fee imposed per 

home improvement contractor, we conclude it is not a true licensing fee, but a 

registration fee meant more to cover the clerical costs of registering and issuing the 

HICPA certificate than the costs of enforcing HICPA’s provisions. See, e.g., id. at 

189-90 (considering the amount of a number of state fees to determine whether those 

fees were true licensing fees or registration fees to cover clerical expenses); Rose 

View Manor, 630 A.2d at 477 (observing that “[t]he annual renewal fee of $200.00 

plus $2.00 per in-patient bed that the Commonwealth charges Rose View is more 

akin to a registration fee than a true license fee as defined”). 

Further, comparing the HICPA fee and the BPT here and applying the 

“duplicative tax test,” we come to the same conclusion as we did in Rose View 

Manor and Helsel. As in those cases, “[t]he tax paid to [Monroeville] is a tax on 

gross receipts while the [HICPA fee] paid to the Commonwealth is . . . not dependent 

on the amount of gross receipts. [Monroeville’s] tax is placed on all businesses[,] 

while the [HICPA] fee is directed only towards” certain home improvement 

contractors. Helsel, 564 A.2d at 548; see also Rose View Manor, 630 A.2d at 476-

77. 

Accordingly, because the HICPA fee is not a true licensing fee under National 

Biscuit and that fee and the BPT “are not duplicative under the LTEA,” Helsel, 564 

A.2d at 548, Monroeville is not precluded by Subsection 301.1(f)(1) from assessing 

the BPT against Mid-Atlantic. 

2. Subsection 301.1(f)(11)
21

Mid-Atlantic also contends the exception set forth in Subsection 301.1(f)(11), 

related to the authority to “assess or collect a tax on the construction of or 

improvement to residential dwellings,” applies here because it is engaged in that 

type of business. 53 P.S. § 6924.301.1(f)(11). It argues the cases relied upon by 

common pleas to find this provision inapplicable are distinguishable because Dale 

and Dale and Alverno Valley Farms were decided before HICPA’s enactment, and 

Fish, which was decided “only by the narrowest of margins and over a strong 

dissent,” did not involve a business in the home improvement industry. (MidAtlantic’s Br. at 12.)

Tax Office responds that Mid-Atlantic’s proposed interpretation of 

Subsection 301.1(f)(11) was rejected in both Dale and Dale and Alverno Valley 

Farms, and Mid-Atlantic’s attempts to distinguish those cases are unavailing. It is 

well-settled, Tax Office argues, that there is a distinction between the taxation of the 

services a business may provide to its customers and the taxation of that business for 

the privilege of operating within a municipality. Fish, 128 A.3d at 770; Gilberti v. 

City of Pittsburgh, 511 A.2d 1321, 1324 (Pa. 1986). According to Tax Office, the 

BPT is not a tax on home improvement contractors’ construction or renovation 

services, but on the privilege of their conducting business operations in Monroeville. 

The distinction between taxing the services a business entity provides and taxing the 

privilege of operating a business within a municipality was reiterated, Tax Office 

maintains, by a majority of the Supreme Court in Fish, notwithstanding a strong 

dissent.

Subsection 301.1(f)(11) provides that “local authorities shall not have 

authority by virtue of this act” “[t]o levy, assess or collect a tax on the construction 

of or improvement to residential dwellings . . . .” 53 P.S. § 6924.301.1(f)(11). In 
22

Alverno Valley Farms, a contractor challenged a township’s assessment of the BPT 

based on the contractor’s gross receipts because, it argued, those gross receipts were 

earned through its construction activities. 524 A.2d at 1040. Thus, it asserted, the 

BPT was the equivalent of taxing the construction of residential dwellings and, 

therefore, fell within this exception to the township’s taxing authority. After 

observing that the legislature had not demonstrated an intent to control the entire 

building industry via comprehensive legislation and that the challenged tax would 

be valid so long as it did not duplicate another tax, we rejected the contractor’s 

argument. In doing so, we explained:

[t]he local tax in this case does not tax the same subject matter as 

specified in section 2(11) of the Act,[17] nor is it measured by the same 

base. The local tax is a tax on the privilege to do business and it is 

measured by the gross volume, determined by receipts, of business 

conducted by the taxpayer, whereas the prohibition under section 2(11) 

of the Act addresses taxes on the construction of a residence, and thus 

has no relationship to the volume of business conducted. The impact 

of the two taxes is on a totally different basis. Carrying on a 

construction business, such as that in which appellee is engaged, 

involves much more than the construction of a residence. Section 2(11) 

of the Act therefore does not prohibit the local tax which was enacted 

pursuant to [the local o]rdinance.

Id. at 1040-41 (emphasis omitted). In Dale and Dale, the Supreme Court, citing

Alverno Valley Farms, held that the assessment of the BPT based on the gross 

receipts of a contractor was “not a tax upon the construction of a residential dwelling 

or the issuance of a building permit, which is prohibited.” Dale and Dale, 741 A.2d 

at 189. The Supreme Court, in Fish, explained it “is established law in Pennsylvania 

that business privileges and transactions are separate and distinct subjects of 

 

17 Alverno Valley Farms cited Section 2(11) of the LTEA, formerly 53 P.S. § 6902(11), 

which was renumbered as Section 301.1(f)(11) by Section 4 of the Act of July 2, 2008, P.L. 197. 
23

taxation,” and cited Dale and Dale as reflecting this distinction. Fish, 128 A.3d at 

770.

Dale and Dale and Alverno Valley Farms are directly on point and, as Tax 

Office argues, rejected the argument made by Mid-Atlantic in this matter. Although 

Mid-Atlantic maintains these cases are distinguishable because they occurred prior 

to HICPA’s enactment, we are not persuaded. HICPA addresses consumer 

protection, not the permissible subjects of local taxation under the LTEA. Thus, its 

enactment does not limit the Court’s interpretation of what subject may and may not 

be taxed under the LTEA. And, under the LTEA and the decisions of our courts, the 

taxation of a construction company’s gross receipts for the privilege of its operating

a business is separate and distinct from a tax on the construction services that 

company may provide. While a local taxing authority is precluded from taxing the 

latter under Subsection 301.1(f)(11), it is well-settled that the former is permissible. 

As the BPT assessed here is based on a business’s gross receipts and is for the 

privilege of operating a business in Monroeville, Subsection 301.1(f)(11) is

inapplicable here.

C. Uniformity Clause and Equal Protection Clause.

Mid-Atlantic next argues it met its burden of proving that Monroeville’s 

taxing scheme is constitutionally infirm because that scheme, as applied to MidAtlantic, has been invalidated by HICPA and the LTEA. According to Mid-Atlantic, 

Monroeville’s continued attempts to impose the invalidated BPT against it reflect an 

unreasonable classification of Mid-Atlantic for the purposes of taxation. Tax Office 

responds that Mid-Atlantic has not specified how the alleged constitutional 

infirmities arise. Therefore, Tax Office argues, Mid-Atlantic has not met its heavy 
24

burden of showing that the BPT clearly, palpably, and plainly violates the 

Constitutions by creating an unreasonable classification for taxation.

Where a taxpayer attacks “the constitutionality of a tax, the burden is on the 

taxpayer to show that the tax clearly, palpably and plainly violates the Constitution 

by demonstrating that a classification for purposes of taxation is unreasonable.” 

MSG Assocs., 747 A.2d at 1278. The taxpayer’s burden of proof is a heavy one 

because “there is a presumption that the tax is constitutional.” Id. A review of MidAtlantic’s constitutional arguments reveals that they are premised on this Court 

finding that Monroeville’s BPT taxing scheme was invalid under HICPA and/or the 

LTEA. Having not invalidated the assessment of the BPT against Mid-Atlantic 

under HICPA or the LTEA, this cannot be the basis of a successful constitutional 

claim. And, as Mid-Atlantic presents no other explanation or argument for how the 

BPT “clearly, palpably and plainly violates the Constitution,” id., Mid-Atlantic has 

not met its heavy burden of demonstrating a constitutional violation.

D. Abatement

Mid-Atlantic finally asserts that, if it prevails on its arguments on the merits,

the assessed penalties and interests would be obviated but, to the extent any 

penalties, interests, or costs remain, those amounts should be abated in full. Citing 

Section 508.B of the BPT Regulations, Mid-Atlantic maintains that Monroeville is 

required to abate any penalty or interest that can be attributed to “erroneous advice 

furnished to the taxpayer in writing” that is reasonably relied upon by the taxpayer. 

(Mid-Atlantic’s Br. at 17.) Mid-Atlantic argues that the BPT Regulations and 

representations by the Tax Office that Mid-Atlantic had to register and obtain a 

license, contrary to HICPA, is such “erroneous advice.” (Id.) Tax Office argues 

that, because Mid-Atlantic cannot prevail on the merits of its substantive arguments 
25

and the Revised Notices properly reflected the BPT Mid-Atlantic owed to 

Monroeville, Mid-Atlantic is not entitled to any abatement under Section 508.B of 

the BPT Regulations.

Because we have found that the BPT is not invalid under HICPA, the LTEA, 

or the United States or Pennsylvania Constitutions, Mid-Atlantic has not established 

an entitlement to an abatement on the basis that it has prevailed on the merits of its

Tax Appeal. Moreover, we are not persuaded by Mid-Atlantic’s argument that it 

received “erroneous advice,” upon which it reasonably relied that resulted in its 

underpaying the BPT. Section 508.B of the BPT Regulations provides

Monroeville shall abate any portion of any penalty or interest 

attributable to erroneous advice furnished to the taxpayer in writing by 

an officer, employee or agent of . . . Monroeville, acting in their official 

capacity . . . if:

(1)The written advice was reasonably relied upon by the 

taxpayer and was in response to a specific written request of 

the taxpayer; and

(2)The portion of the additional tax, penalty and interest did not 

result from the failure of the taxpayer to provide adequate or 

accurate information.

(R.R. at 156a (emphasis in original).) As discussed above, the general business 

registration and licensing process set forth in the BPT Ordinance and BPT 

Regulations is not preempted by Section 12 of HICPA, and, there is nothing 

otherwise invalid about the assessment of the BPT. Therefore, it was not “erroneous 

advice” to require Mid-Atlantic to register and obtain a business license for the 

limited purpose of ascertaining tax liability in accordance with those provisions. Id. 

Thus, abatement pursuant to Section 508.B of the Regulations is unavailable to MidAtlantic. 
26

III. Conclusion

For the foregoing reasons, Monroeville is not preempted by Section 12 of 

HICPA or precluded by Subsections 301.1(f)(1) or (11) of the LTEA from assessing 

the BPT against Mid-Atlantic. Further, Mid-Atlantic has not met its burden of proof 

on its constitutional claims and has not established any entitlement to an abatement 

of the penalties, interests, or costs imposed by the THO. Accordingly, common 

pleas’ Order is affirmed. 

_____________________________________

RENÉE COHN JUBELIRER, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Mid-Atlantic Systems of WPA, Inc., :

Appellant :

 :

v. : No. 588 C.D. 2018

 : 

The Tax Office of the Municipality :

of Monroeville :

O R D E R

NOW, March 4, 2019, the Order of the Court of Common Pleas of Allegheny 

County is AFFIRMED.

_____________________________________

RENÉE COHN JUBELIRER, Judge