Appeal from judgment of Court of Common Pleas of Dauphin County, No. 45 Commonwealth Docket, 1965, in case of Commonwealth of Pennsylvania v. First Pennsylvania Overseas Finance Corporation.
Thomas S. Weary, with him Saul, Ewing, Remick & Saul, for appellant.
Vincent X. Yakowicz, Deputy Attorney General, with him Edward Friedman, Attorney General, for Commonwealth, appellee.
Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Cohen.
First Pennsylvania Overseas Finance Corporation (Appellant) was organized and exists under an Act of the United States Congress. Its home office and, indeed, its corporate base is in Philadelphia. From there, it conducts its foreign financing activity as a wholly owned subsidiary of the First Pennsylvania Banking and Trust Company. The sole question involved in this case is whether Appellant is subject to Pennsylvania capital stock tax, as both the Board of Finance and Revenue and the court below have held.
Appellant's position is quite straightforward. Under § 21(a) of the Act of June 1, 1889, P.L. 420, as amended, 72 P.S. § 1871, a capital stock tax is imposed upon every "domestic" corporation which is required to file a report under § 20, 72 P.S. § 1901, of the Act. Appellant contends that the language of § 20 clearly marks a corporation created under the laws of the
United States*fn1 as a "foreign" corporation, not a "domestic" one, and that appellant, therefore, is not subject to capital stock tax. In so asserting, Appellant makes no constitutional claim; in fact, it freely admits that were the Pennsylvania statute so written as to include federally-chartered corporations in the "domestic" group, Appellant's liability to capital stock tax would be clear.
Section 20 of the Act of 1889, supra, provides: "Hereafter . . . it shall be the duty of every corporation . . . now or hereafter organized by or under any laws of this Commonwealth, and of every corporation . . . now or hereafter incorporated or organized by or under the law of any other State or Territory of the United States, or by the United States, or by any foreign government, and doing business in and liable to taxation within this Commonwealth . . . to make annually . . . a report."
According to Appellant, this section divides all corporations into the two classes referred to in § 21: (a) "domestic" corporations organized under the laws of this Commonwealth and (b) "foreign" corporations organized under the laws of any other state, of the United States or of a foreign government. The latter category, subject to a franchise tax under § 21(b), contains the additional qualification that the corporation be doing business in Pennsylvania, while the former category covers all domestic corporations whether or not they are doing business here. Therefore, Appellant contends, it is defined by Pennsylvania law as a
"foreign" corporation and cannot be taxed as a ...