Case Name: GOLDEN TRIANGLE BROADCASTING, INC., Westinghouse Broadcasting Company, Inc., WIIC-TV Corporation and WKJF FM, Inc., Appellants, v. CITY OF PITTSBURGH, a Municipal Corporation, Joseph M. Barr, Mayor, City of Pittsburgh, David A. Smith, Treasurer, City of Pittsburgh, Donald J. Bucholtz, Superintendent, Business Privilege Tax, City of Pittsburgh
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1979-01-24
Citations: 483 Pa. 525
Docket Number: No. 35
Parties: GOLDEN TRIANGLE BROADCASTING, INC., Westinghouse Broadcasting Company, Inc., WIIC-TV Corporation and WKJF FM, Inc., Appellants, v. CITY OF PITTSBURGH, a Municipal Corporation, Joseph M. Barr, Mayor, City of Pittsburgh, David A. Smith, Treasurer, City of Pittsburgh, Donald J. Bucholtz, Superintendent, Business Privilege Tax, City of Pittsburgh.
Judges: Before EAGEN, C. J., and O’BRIEN, ROBERTS, POMEROY, NIX, MANDERINO and LARSEN, JJ.
Reporter: Pennsylvania State Reports
Volume: 483
Pages: 525–538

Head Matter:
397 A.2d 1147
GOLDEN TRIANGLE BROADCASTING, INC., Westinghouse Broadcasting Company, Inc., WIIC-TV Corporation and WKJF FM, Inc., Appellants, v. CITY OF PITTSBURGH, a Municipal Corporation, Joseph M. Barr, Mayor, City of Pittsburgh, David A. Smith, Treasurer, City of Pittsburgh, Donald J. Bucholtz, Superintendent, Business Privilege Tax, City of Pittsburgh.
Supreme Court of Pennsylvania.
Argued Oct. 16, 1978.
Decided Jan. 24, 1979.
Reargument Denied March 1, 1979.
Frank L. Seamans, Dale E. Williams, Samantha Francis Flynn, Dennis J. Lewis, Eckert, Seamans, Cherin & Mellott, Pittsburgh, for appellants.
Mead J. Mulvihill, Jr., City Sol., Grace S. Harris, Exec. Asst. City Sol., Pittsburgh, for appellees.
Before EAGEN, C. J., and O’BRIEN, ROBERTS, POMEROY, NIX, MANDERINO and LARSEN, JJ.

Opinion:
OPINION OF THE COURT
ROBERTS, Justice.
The Local Tax Enabling Act authorizes the City of Pittsburgh to "levy, assess and collect" taxes upon "persons, transactions, occupations, privileges, subjects and personal property," but denies the City the authority to tax "manufacturing." Pursuant to the Act, the City imposes a "Business Privilege Tax." Appellants, radio and television broadcasters, brought an action in equity, alleging they are "manufacturers" not subject to the City's tax. Appellants sought to enjoin the City from collecting its Business Privilege Tax upon their revenues. The chancellor concluded that appellants are "manufacturers" and enjoined collection of the tax. On the City's appeal, the Commonwealth Court reversed. We granted allowance of appeal and now affirm.
I
Throughout these proceedings, appellants have maintained that they "deríve their revenues from those who seek to convey commercial messages to the public in the same fashion that the newspapers derived their advertising receipts from those who buy space in their newspapers." Our task is to determine whether the activity which produces appellants' revenues is "manufacturing" for purposes of the Local Tax Enabling Act. The Legislature provides no definition of "manufacturing" for purposes of the Act, and this Court has not yet considered the term as used in the Act. But "[t]his definitional vacuum has been filled by a judicial definition of the term which has emerged from a long line of cases extending back over a hundred years' time." Commonwealth v. Deitch Co., 449 Pa. 88, 92, 295 A.2d 834, 837 (1972) (discussing "Capital Stock Tax" Act ). Deitch summarizes the "judicial definition" that has "emerged" from our "long line of cases:"
" 'The meaning of "manufacturing" has been restated by this Court in Philadelphia School District v. Parent Metal Products, Inc., 402 Pa. 361, 364, 167 A.2d 257, 258-59 (1961): " 'Manufacturing' as used in a legislative enactment is given its ordinary, and general meaning) It consists in the application of labor or skill to material whereby the original article is changed into a new, different and useful article: Commonwealth v. Weiland Packing Company, 292 Pa. 447, 449, 141 A. 148 (1928); Pittsburgh v. Electric Welding Company, 394 Pa. 60, 145 A.2d 528 (1958). Whether or not an article is a manufactured product depends upon whether or not it has gone through a substantial transformation in form, qualities and adaptability in use from the original material, so that a new article or creation has emerged: General Foods Corp. v. Pittsburgh, 383 Pa. 244, 118 A.2d 572 (1955). If there is merely a superficial change in the original materials, without any substantial and well signalized transformation in form, qualities and adaptability in use, it is not a new article or new production: Commonwealth v. Wei-land, supra; Pittsburgh Electric Welding Co., supra." ' "
Commonwealth v. Deitch Co., 449 Pa. at 93-94, 295 A.2d at 837, quoting Commonwealth v. Berlo Vending Co., 415 Pa. 101, 104, 202 A.2d 94, 96 (1964).
Deitch demonstrates that "merely a superficial change in the original materials, without any substantial and well signalized transformation in form, qualities and adaptability in use," is not "manufacturing." In Deitch, this Court held that a scrap metal dealer is not entitled to the "manufacturing" exemption under the Capital Stock Tax Act. "[AJppellant does begin and end with scrap or junk metal. It adds nothing to the mass as it arrives at the . yard, but rather subtracts by cleaning away unwanted elements. . . . [T]he legal reality is that the transformation is merely superficial since the steel contained therein remains totally unchanged as a result of this activity." Deitch, 449 Pa. at 97, 295 A.2d at 839.
Several other cases of this Court illustrate that "manufacturing" involves more than "merely a superficial change." For example, in Berio Vending, supra, a company mixed "popcorn" kernels, coconut oil, and salt and heated the mixture until the kernels "popped," "increasing the volume of each kernel from 30 to 36 times its original size." Berlo Vending, 415 Pa. at 103, 202 A.2d at 95. Merchantable "popped" corn was placed in bags and shipped in the company's trucks to the company's concession stands in movie theatres and other places of entertainment. This Court denied the company "manufacturing" status for purposes of the Capital Stock Tax Act: "[Ajlthough there is a change in form, the kernel of corn is expanded to many times its original size and with the addition of some oil and salt, such change is merely superficial." Id., 415 Pa. at 105, 202 A.2d at 96. In Commonwealth v. Sunbeam Water Co., 284 Pa. 180, 130 A. 405 (1925), a corporation which subjected ordinary water to heat, converted the water to steam, and condensed the steam to obtain distilled water did not "manufacture." This Court observed: "The distilled water produced by the [corporation] is subjected to certain additional refinements in cleansing it of impurities, but in its main essentials the process is the boiling of it to the point where it becomes steam and cooling it back to water." Id., 284 Pa. at 181-82, 130 A. at 406. And in General Foods Corp. v. Pittsburgh, 383 Pa. 244, 118 A.2d 572 (1955), this Court concluded that "decaffeinated and instant coffee, tapioca, and certain canned products" were not manufactured. "None of those articles is a manufactured product, not having gone through a substantial transformation in form, qualities, and adaptability in use so that a new article or creation has emerged." Id., 383 Pa. at 251-52, 118 A.2d at 576.
II
Realistically viewed, appellants are not "manufacturers" in the common and approved usage of that term. Advertisers produce and record, either in transcript or on film, virtually all of the commercial messages appellants broadcast. Appellants' announcers read transcribed materi als into electronic microphones and appellants' technicians project light through filmed materials and onto a surface from which an electrical signal can be extracted. Appellants then amplify and radiate the resulting electronic signals on appellants' exclusive, governmentally assigned wavelengths. Like the popcorn company which converts popcorn kernels into popcorn and markets the converted product, the firm which distills water, and the company which markets its decaffeinated and instant coffees, appellants effect "merely a superficial change in the original materials." See also Assessors of Springfield v. Commissioners of Corporations and Taxations, 321 Mass; 186, 72 N.E.2d 528 (1947) (conversion of human sound into electrical impulses for use in telephone system not manufacturing). Any changes appellants effectuate are geared to appellants' own transmitting equipment, and do not produce "a new, different and useful article." Deitch, supra. As President Judge Bowman correctly summarized,
"the essential function of broadcasting is the transmission rather than the manufacture of visual and sound information. While broadcasting certainly makes that information more useful and useable, there are many processing functions that do likewise but do not result in the manufacture of a product."
Golden Triangle Broadcasting, Inc. v. City of Pittsburgh, 31 Pa.Cmwlth. 547, 563, 377 A.2d 839, 847 (1977) (footnote omitted). See Commonwealth ex rel. Luckett v. WLEXTV, Inc., 438 S.W.2d 520 (Ky.1968).
It is true that appellants devote substantial energies to the procurement, scheduling, editing, and transmission of the many programs ultimately viewed and heard by their television and radio audiences. Indeed, a portion of these programs, including news broadcasts, are produced in appellants' stations. But to determine appellants' Business Privilege Tax liability on the basis of these activities would be to ignore economic realities. See e. g., Commonwealth v. Arrott Mills Co., 145 Pa. 69, 74, 22 A. 243, 243 (1891) ("the corporation must be measured not by what it calls itself, but what it does"). Through program selection, production, and scheduling, appellants provide advertisers access to a consumer market with predictable characteristics. Just as in Arrott, supra, where this Court concluded that a corporation generating steam power for commercial tenants of the corporation's buildings is not a "manufacturer," but rather a "landlord supplying its tenants with steam-power in order to enable it the more readily to rent its buildings and rooms," 145 Pa. at 74, 22 A. at 243, appellants' program selection and production activities serve to enhance the value of the air time they offer advertisers.
Ill
We are mindful that the Tax Enabling Act withholds from the City the authority to tax "manufacturing," and doubts concerning the status of appellants' activity are to be construed in favor of appellants and against the City. See Fischer v. Pittsburgh, 383 Pa. 138, 142, 118 A.2d 157, 159 (1955) ("[a]ny doubt . . . concerning the construction of the ["Tax Anything Act" (predecessor of Tax Enabling Act)] must be resolved in favor of the taxpayer and against the city"). But in view of the common and approved usage of the term "manufacturing," see supra note 7, our many cases requiring more than a "superficial change in the original materials," and of course, the overriding presumption that "the General Assembly does not intend a result that is absurd, impossible of execution or unreasonable," 1 Pa.C.S.A. § 1922(1) (Supp.1978), it must be concluded, upon a proper view of the record, that appellants are not engaged in "manufacturing." The Commonwealth Court correctly reversed the chancellor's decree.
Order of the Commonwealth Court affirmed. Each party pay own costs.
MANDERINO, J., filed a dissenting opinion.
LARSEN, J., filed a dissenting opinion in which MANDERINO, J., joined.
Mr. Justice O'BRIEN and Former Justice POMEROY did not participate in the decision of this case.
. Act of December 31, 1965, P.L. 1257, § 2, 53 P.S. § 6902 (1972).
. Section 2 of the Act provides in part:
"[L]ocal authorities shall not have authority by virtue of this act:
s|c # # #
(4) To levy, assess and collect a tax on goods and articles manufactured in such political subdivisions or on the by-products of manufacture, . . or on any privilege, act or transaction related to the business of manufacturing, . by manufacturers . with respect to the goods, articles and products of their own manufacture . . . ."
. Appellants include Golden Triangle Broadcasting, Inc., Westinghouse Broadcasting Co., WIIC--TV Corp., and WKJF FM, Inc.
. We hear this appeal pursuant to the Appellant Court Jurisdiction Act of 1970, Act of July 31, 1970, P.L. 673, art. II, § 204(a), 17 P.S. § 211.204(a) (Supp.1978). According to the City, this Court is not presented with a "final order" for purposes of Section 204(a) of the Act. The Commonwealth Court reversed the chancellor on statutory grounds and remanded for consideration of appellants' alleged grounds for relief the chancellor did not reach. The Commonwealth Court's order decides a question which at least "two justices of [this] Court," id., deemed deserving of further review. No further proceedings involving this question are contemplated by the order of the Commonwealth Court, and we view the order "final."
. Brief for Appellants 65. When asked, "What is it you sell?," G. Edward Wallis, Regional Vice-President of one of appellant-broadcasters, summarized, "We sell advertising." Record at 58a. In their complaint, appellants identify the "primary source of sustaining revenue as payments for advertising and commercial messages." Id. at 7a.
. Act of June 1, 1889, P.L. 420, § 21 et seq., formerly 72 P.S. § 1871 et seq. (1949), repealed, Tax Reform Code of 1971, Act of March 4, 1971, P.L. 92, § 605, 72 P.S. § 7605 (Supp. 1978). The Capital Stock Tax Act and the Tax Enabling Act are two of several taxing statutes which accord "manufacturing" special status, but do not define the term. See also, e. g., "Tax Anything Act," Act of June 25, 1947, P.L. 1145, as amended, Act of May 9, 1949, P.L. 898, formerly 53 P.S. § 6851, repealed, Tax Enabling Act, § 23, 53 P.S. § 6923; Local "Mercantile License Tax" Act, Act of June 20, 1947, P.L. 745, § 1 et seq., 24 P.S. § 582.1 et seq. (1962). This Court's decisions interpreting "manufacturing" for purposes of a particular taxing statute draw upon "manufacturing" cases under the several statutes. Indeed, in General Foods Corp. v. Pittsburgh, 383 Pa. 244, 118 A.2d 572 (1955), this Court analyzed "manufacturing" under the "Tax Anything Act" and the Local "Mercantile License Tax" Act together, citing cases under both statutes (Armour & Co. v. Pittsburgh, 363 Pa. 109, 69 A.2d 405 (1949) ("Tax Anything Act" and Local "Mercantile License Tax" Act); Rieck-McJunkin Dairy Co. v. Pittsburgh Sch. Dist., 362 Pa. 13, 66 A.2d 295 (1949) (Local "Mercantile License Tax" Act)) and the now-repealed State Mercantile License Tax Act, Act of May 2, 1899, P.L. 184, formerly 72 P.S. § 2621 et seq. (Commonwealth v. Weiland Packing Co., 292 Pa. 447, 141 A. 148 (1928)).
. See 1 Pa.C.S.A. § 1903(a) (Supp.1978) ("[w]ords and phrases shall be construed according to rules of grammar and according to their common and approved usage"); see also First Data Corp. v. State Tax Comm'n, Mass., 357 N.E.2d 933, 935 (1976) ("[a]s the [Massachusetts taxing] statute does not itself effectively define 'manufacturing,' . [Massachusetts] Legislature should be supposed to have adopted the common meaning of the word, as assisted by a consideration of the historical origins of the enactment").
. Many other cases of this Court are in accord. In Commonwealth v. Denston Felt & Hair Co., 304 Pa. 536, 156 A. 164 (1931), a corporation purchased hair from a tannery, washed and dried the hair, baled some of the cleaned product for upholstering and other commercial purposes, and made felt from the rest. This Court agreed with the Commonwealth that, "down to the point where the cleaned hair is ready for use by defendant company in the actual manufacture of felt, the processes detailed 'are nothing more than washing, drying, cleaning and assorting the hair.' A portion not used by defendant is sold, but when sold it is still hair. Its form has not changed. It had undergone nothing more than a cleansing process and has not been transformed into a new product. The sole difference between the washed article and the raw product is that the former is more free from dirt and other objectionable matter." Denston, 304 Pa. at 538, 156 A. at 165. Commonwealth v. Weiland Packing Co., 292 Pa. 447, 141 A. 148 (1928), denied a "manufacturing" exemption to a corporation with cut, cured, and smoked "hams" from the carcasses of slaughtered animals. Accord, Armour & Co. v. Pittsburgh, 363 Pa. 109, 69 A.2d 405 (1949). Similarly, in Commonwealth v. LowryRodgers Co., 279 Pa. 361, 123 A. 855 (1924), this Court found no manufacturing where a company cleaned coffee beans, removed their outer skins, and roasted the beans, even though the beans changed color, weighed less, and increased in size.
. Advertisers produce 97% of television commercials and 98.5% of radio commercials, while two per cent of television commercials and one-half of one per cent of radio commercials are produced by advertising agencies using broadcasters' facilities. Record at 257a. One per cent of both television and radio advertisements are produced by broadcasters. Id. Appellants do not argue that revenues derived from their production of one per cent of advertisements should be segregated as revenues from manufacturing, see generally Commonwealth v. Interstate Amiesite Corp., 412 Pa. 180, 184, 194 A.2d 191, 194 (1963) ("[t]he segregation of a taxpayer's activities for the purposes of taxation under the pertinent statute is proper and reasonable"), and we do not decide whether production of these advertisements constitutes manufacturing.
. The record identifies "tapes" as an additional medium from which electronic signals are extracted. Record at 131a-132a. Radio broadcasters, for example, receive tape-recorded commercial messages from advertisers and also record transcribed messages onto tapes for repeated use. Id.
. Section 602 of the Tax Reform Code of 1971, Act of March 4, 1971, P.L. 6, 72 P.S. § 7602 (Supp.1978), now exempts from capital stock tax the stock of companies "organized for manufacturing, processing, research or development purposes." While the Act provides no definition of "manufacturing," it does define "processing." It should be noted that the Legislature includes in "processing" the activity of "broadcasting radio and television programs by licensed commercial or educational stations." Tax Reform Code of 1971, § 602(c)(ll), 72 P.S. § 7602(c)(ll).
. In reviewing the Commonwealth Court's order, we are not presented with the question whether any of appellants' non-advertising, revenue-producing activities constitute "manufacturing." Appellants neither sought nor obtained partial relief from that portion of the City's tax imposed upon revenues derived from non-advertising activities. Rather, throughout these proceedings, appellants maintain that their entire operation is not subject to tax.
. Appellants rely upon City of Pittsburgh v. Pittsburgh Press Co., 14 Pa.Cmwlth. 551, 322 A.2d 390 (1974), in which the Commonwealth Court before decision in this case held that a newspaper's advertising revenues are not subject to the City's tax. Pittsburgh Press was not a holding of this Court and the issue presented there is not before us.