Opinion
December 6, 1934.
January 7, 1935.
Taxes — Sales tax — Medicines compounded by pharmacists — Tangible personal property — Gross income — Act of August 19, 1932, P. L. 92.
The sale of medicines compounded by a pharmacist in accordance with physicians' prescriptions, is subject to tax under the Act of August 19, 1932, P. L. 92.
Argued December 6, 1934.
Before FRAZER, C. J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.
Appeal, No. 380, Jan. T., 1934, by Max Biser, from order of C. P. No. 2, Phila. Co., Sept. T., 1933, No. 9488, in re Appeal of Max Biser. Order affirmed.
Appeal from assessment of emergency relief sales tax.
Appeal dismissed.
The facts are stated in the opinion of the lower court, STERN, P. J., as follows:
The tax here involved was assessed on medicines sold by appellant, which medicines had been compounded by him in accordance with physicians' prescriptions.
The only question in the case is whether the sale of such medicines was subject to tax under the emergency relief sales tax provided by the Act of August 19, 1932, P. L. 92.
Under that act the tax is imposed and assessed "upon sales of tangible personal property."
In the opinion of the court the medicines sold by the appellant constituted "tangible personal property."
The appellant contends that the money received by him from the customer is not derived from the sale of the medicine but for his service in compounding the constituent drugs. The fact is that it is a payment for both. In some cases probably the major charge is for the drugs, which may be extremely expensive; in other cases the value of the drugs may be relatively small as compared to the work in executing the prescription. But the act provides that the tax is on the gross income derived from the sale, and gross income is defined to be the value proceeding from the sale, without any deduction on account of the cost of the property sold, the cost of materials used, labor or service cost, or any other cost whatsoever.
Many objects of "tangible personal property" derive their chief value from the labor expended in their manufacture. The actual cost of the canvass and pigments constituting a painting may be infinitesimal in comparison with the value of the work wrought by the painter's genius. The cost of the yarn used in a rug may be quite negligible in comparison with the value added by the artistry of the weaver. But the sales price of the painting or the rug would be taxable under the act.
Neither does the act attempt to distinguish as to the kind of labor or of art which enters into the finished product, as for example, between the work of a laborer who constructs an automobile and the skill of a druggist who measures and compounds drugs; and, in fact, each requires its own kind of care and intelligence. The circumstance that the State requires of pharmacists certain qualifications because they deal with substances which may be injurious unless measured and mixed with caution, is no reason why the resulting medicine when sold should not be subject to the terms of the act. There are many articles as to the manufacture, handling and sale of which the State prescribes regulations in order to insure a safe and sanitary product.
The court does not consider it necessary to discuss the appellant's contention that the practice of pharmacy constitutes a "profession" rather than a "business." Those words are popular rather than "legal" terms. A minister's sermon, or a brief prepared by a lawyer, or a physical examination of a patient by a physician, is not the subject of a sale, but a bottle of medicine is. It may well be that pharmacy is a "profession," but that is no reason why the legislature should not tax the sale of medicines compounded by a pharmacist, and the act makes no distinction in favor of pharmaceutical products, nor excepts them from the general class of "tangible personal property."
For these reasons the court affirmed the action of the department of revenue refusing a reassessment of the tax.
Plaintiff appealed to Supreme Court.
Error assigned was order dismissing appeal, etc., quoting record.
Jacob Boonin, with him Marcus D. Hutkin, for appellant.
Leo Weinrott, Special Deputy Attorney General, and Wm. A. Schnader, Attorney General, for appellee, were not heard.
The order of the court below, dismissing appeal from and affirming the order of the department of revenue refusing appellant's petition for reassessment of tax under the Emergency Relief Sales Tax Act of August 19, 1932, P. L. 92, is affirmed on the opinion written for the court by Judge STERN.