BFC Hardwoods, Inc. v. Board of Assessment Appeals of Crawford County

Summary

The Supreme Court of Pennsylvania considered whether specialized dry kilns used to dry lumber qualify as machinery or equipment excluded from local real estate taxation under the Fourth to Eighth Class County Assessment Law. The court held that BFC Hardwoods' dry kilns constituted machinery contained in an industrial establishment and were therefore excluded from real estate taxation. The court reversed the Commonwealth Court and remanded for further proceedings.

Holdings

1. BFC's lumber-drying facility constituted an industrial establishment for purposes of the machinery-and-equipment exclusion in Section 201(a) of the Fourth to Eighth Class County Assessment Law.
2. The entirety of BFC's dry kilns, including their specialized physical structures, chambers, and associated components, constituted machinery or equipment excluded from real estate taxation under Section 201(a).
3. Commonwealth v. Babcock Lumber Co. did not control the case because it interpreted a narrower exemption under the Capital Stock Tax Act, whereas this case involved the broader machinery-and-equipment exclusion for local real estate taxation.

Questions Presented

1. Whether BFC's dry kilns constituted machinery, tools, appliances, or other equipment contained in an industrial establishment under Section 201(a) of the Fourth to Eighth Class County Assessment Law.
2. Whether the dry kilns were excluded from local real estate taxation under 72 P.S. § 5453.201(a), including whether their structural components were integral parts of machinery or equipment rather than taxable real estate.
3. Whether Commonwealth v. Babcock Lumber Co. controlled the tax treatment of the dry kilns.

Disposition

reversed_and_remanded