Court Opinion

ID: 6373531
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:50:00.15518+00
Date Added: 2024-06-11T15:50:04.892397
License: Public Domain

PALLADINO, Judge,
dissenting.
I must respectfully dissent. On August 8, 1988, in Stewart Honeybee Products, Inc. v. Commonwealth, 118 Pa. Commonwealth Ct. 430, 545 A.2d 468 (1988) (Stewart Honeybee I), a unanimous panel of this court held that the process used to refine the honey in this matter did not constitute manufacturing under the capital stock tax, Act of March 4, 1971, P.L. 6, as amended, 72 P.S, § 7602. Petitioner’s exceptions have provided no new authority to support the reversal of Stewart Honeybee I.
*137While the majority opinion correctly sets forth the test for determining whether a process is manufacturing, it misapplies this test. As stated by the Pennsylvania Supreme Court, manufacturing is “(1) the application of labor and skill (2) which changes a material (3) substantially (4) into a new, different and useful item.” Ski Roundtop, Inc. v. Commonwealth, 520 Pa. 227, 231, 553 A.2d 928, 930 (1989) (emphasis added). This test is not new, but merely a reiteration of prior precedent. Id.
Applying this test to the facts of this case, in light of prior decisions, requires a finding that the process in question is not manufacturing. Stewart Honeybee’s five stage process merely transforms solid honey into liquid honey, a superficial change in the raw honey. The use of expensive and elaborate machinery is not the application of the requisite labor and skill, if only superficial changes are made to the raw material. See Armour & Co. v. City of Pittsburgh, 363 Pa. 109, 116, 69 A.2d 405, 408 (1949).
The majority’s reliance on Kirks Milk Products, Inc. v. Commonwealth, 58 Pa.Commonwealth Ct. 230, 427 A.2d 688 (1981) is misplaced. The process in Kirks Milk could not be duplicated in the home. However, when the process can be duplicated in the home on a smaller scale, elaborate machinery does not transform the process into an application of labor and skill. Commonwealth v. Berlo Vending Co., 415 Pa. 101, 202 A.2d 94 (1964). In the case at bar, raw honey can easily be transformed into a usable product in the home.
Even if the majority’s conclusion that the use of elaborate machinery constitutes an application of labor and skill is accepted, no new, different and useful product is produced. It is well established that the removal of impurities or foreign matter from a substance does not result in a new and different product. See Commonwealth v. Tetley Tea Company, Inc., 421 Pa. 614, 220 A.2d 832 (1966) (separating tea from foreign matter does not result in a new and different product); Commonwealth v. Sunbeam Water Co., 284 Pa. 180, 130 A. 405 (1925) (distillation of water to *138remove impurities does not result in a new and different product). Nor does the mere pasteurization of a substance create a new and different product. See Rieck-McJunkin Dairy Co. v. Pittsburgh School District, 362 Pa. 13, 66 A.2d 295 (1949) (pasteurization of milk to destroy harmful organisms does not create a new and different product).
In this case, the honey is pasteurized to destroy bacteria and filtered to remove foreign matter. Merely bringing the honey into compliance with the federal standards for human consumption does not make it a new, different, and useful product; it is honey both before and after compliance is achieved. As this court has held in the past, the cooking and blending of food products does not constitute manufacturing. See Van Bennett Food Co., Inc. v. City of Reading, 87 Pa. Commonwealth Ct. 30, 486 A.2d 1025 (1985) (preparation of potato and macaroni salad, baked lima beans, potato filling, bread filling, red beet eggs, egg salad, macaroni and cheese, rice pudding, tapioca pudding, clam chowder, cole slaw, pepper cabbage, health salad, tuna salad and cranberry relish do not constitute manufacturing). Accordingly, I would dismiss Honeybee’s exception to this Court’s decision in Stewart Honeybee Products, Inc. v. Commonwealth, 118 Pa.Commonwealth Ct. 430, 545 A.2d 468 (1988).