Court Opinion

ID: 6264923
Source: CourtListenerOpinion
Date Created: 2022-02-17 23:39:58.105483+00
Date Added: 2024-06-11T08:59:46.767973
License: Public Domain

NIX, Chief Justice,
concurring.
I concur in the result reached by the Court in this case. However, I write separately to offer my analysis justifying that result.
In Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306 (1985), we addressed an exemption issue under the same section of the Tax Reform Code of 1971 (“Tax Code”), Section 204(10), as that involved in the instant case. The issue in Hospital Utilization Project (“HUP”) differs only inconsequentially from the instant issue. HUP involved a question of whether the particular entity, Hospital Utilization Project, qualified as a “charitable organization” under Section 204(10) as defined by 61 Pa.Code § 32.1; the issue in this case is whether the particular entity, PICPA Foundation, qualifies *75as a “nonprofit educational institution” under the same section of the Tax Code, Section 204(10) as defined by 61 Pa.Code § 32.1. The constitutional authority to exempt from taxation both charitable organizations and nonprofit educational institutions is granted to the legislature by Article VIII, section 2(a)(v) of the Pennsylvania Constitution of 1968 which provides:
(a) The General Assembly may by law exempt from taxation:
(v) Institutions of purely public charity----
Thus, the threshold question in an exemption case involving either a charitable organization or a nonprofit educational institution is whether that entity is a purely public charity. In HUP, this Court unanimously held that “regardless whether [the entity in question] qualifies as a ‘charitable organization’ under Section 204, as defined by the Pennsylvania Code, 61 Pa.Code § 32.1, it must first qualify under the Constitution as a ‘purely public charity.’ ” HUP, 507 Pa. at 13, 487 A.2d at 1312 (emphasis added) (citation omitted).
Because the entity in question in HUP did not qualify as a purely public charity, this Court did not reach the issue of whether the entity qualified as a charitable organization. In making the determination that the organization in question was not a “purely public charity” within Article VIII, section 2(a)(v) of the Constitution, the HUP Court drew upon cases which have interpreted that phrase over the years. The Court then set forth the parameters of such an entity, stating that an entity qualifies as a purely public charity if it:
(a) Advances a charitable purpose;
(b) Donates or renders gratuitously a substantial portion of its services;
(c) Benefits a substantial and indefinite class of persons who are legitimate subjects of charity;
(d) Relieves the government of some of its burden; and
*76(e) Operates entirely free from private profit motive.
Id. at 21-22, 487 A.2d at 1317.
The Opinion Announcing the Judgment of the Court acknowledges that Section 204(10) “must be read in light of the constitutional mandate that only institutions which are purely public charities may be exempted from taxes.” Maj. Op. at 190. Despite this acknowledgment and the fact that the Pennsylvania Constitution clearly requires that an institution be a purely public charity before it can be exempt from taxation, the Opinion Announcing the Judgment of the Court fails to make this preliminary, constitutionally required finding in its resolution of the instant issue.1 In addition, rather than applying the constitutional standard and analysis mandated in HUP, the Opinion Announcing the Judgment of the Court resolves the issue in this case by the circuitous route of the Commonwealth Court’s decision in Biosciences Information Service v. Commonwealth, Bd. of Fin. and Revenue, 122 *77Pa.Commw. 294, 551 A.2d 672 (1988), aff'd, 524 Pa. 132, 569 A.2d 927 (1990). The Opinion Announcing the Judgment of the Court says the Court in Biosciences “implied” that Section 204(10) of the Tax Code requires a public benefit. To the contrary, that decision expressly relied upon the constitutional standard of a purely public charity and the explication of that standard, as set forth in HUP in order to resolve the exemption issue, something which the Opinion Announcing the Judgment of the Court fails to do.
CAPPY and MONTEMURO, JJ., join in this concurring opinion.

. It is evident from the following exceipt from the Commonwealth’s brief that the Commonwealth is laboring under an incorrect understanding of the law.
At the outset, it is important to note that PICPA has not asked for a tax exemption as a charitable organization which is also found in Section 204(10) of the Tax Reform Code. There has, from time to time, existed questions as to whether the exemption for nonprofit educational institutions is independent of the exemption for charitable organizations. The Commonwealth throughout this appeal process and indeed historically has not held to the purely public charity standard defined in Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306 (1985), and subsequent cases when reviewing applicants for exemption as nonprofit educational institutions.
Brief for Appellee at 8 n. 1.
I refer the Commonwealth to the following cases, all of which apply the purely public charity standard to nonprofit educational institutions: Vanguard School Tax Exemption Case, 430 Pa. 378, 243 A.2d 323 (1968); Hill School Tax Exemption Case, 370 Pa. 21, 87 A.2d 259 (1952); The Ogontz School Tax Exemption Case, 361 Pa. 284, 65 A.2d 150 (1949); Episcopal Academy v. Philadelphia, 150 Pa. 565, 25 A. 55 (1892). The authority of the legislature to exempt these institutions from taxation, whether such exemption is a real properly exemption pursuant to The General County Assessment Law, 72 P.S. § 5020-204, as it was in these cases, or a sales tax exemption pursuant to The Tax Reform Code of 1971, 72 P.S. § 7204(10), as in the instant case, is limited by the constitutional requirement that such entities be purely public charities.