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EASTMAN KODAK COMPANY v. COMMONWEALTH (05/25/72)

decided: May 25, 1972.

EASTMAN KODAK COMPANY
v.
COMMONWEALTH



Appeal from the Order of the Board of Finance and Revenue in case of Appeal of Eastman Kodak Company, order dated June 3, 1970, Dockets Nos. R-2506, R-25057, R-24347.

COUNSEL

Ronald F. Kidd, with him Duane, Morris & Heckscher, for appellant.

M. David Smeltz, Deputy Attorney General, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Mencer.

Author: Mencer

[ 5 Pa. Commw. Page 435]

The sole legal issue in this appeal is the same as discussed and resolved by this Court in Allentown Wholesale Grocery Company v. Commonwealth of Pennsylvania, 5 Pa. Commonwealth Ct. 426, A.2d (1972), which we file this day. This appeal is controlled by that decision. We there decided that a 52-53-week accounting period constituted a fiscal year basis of accounting and not a calendar year basis of accounting. The consequence of such a holding was to free the taxpayer

[ 5 Pa. Commw. Page 436]

    from paying a higher rate of tax which was imposed effective January 1 of a given year when the taxpayer's fiscal year commenced prior to the January 1 date.

Here we have a like situation. Eastman Kodak Company (Eastman) is a foreign business corporation organized under the laws of the State of New Jersey with its home office and principal place of business at Rochester, New York. Eastman registered and qualified to do business in Pennsylvania on December 27, 1965. It timely filed with the Department of Revenue its Certification of Filing Period stating that its fiscal year ends "the Sunday which last occurs in December." Since the year 1932, Eastman has maintained its books and records on a 52-53 week accounting period which always ends on the last Sunday in December and its fiscal year begins on the next day.

Within the time required by law, Eastman filed with the Department of Revenue its corporate net income tax report for the fiscal year beginning on December 26, 1966 and ending on December 31, 1967. Eastman calculated its tax at the rate of six per centum but in settlement of this tax the Department of Revenue considered Eastman to be on a calendar year basis of accounting and subject to a tax rate of seven per centum.

A Petition for Resettlement was filed by Eastman and refused. Eastman then filed a Petition for Review with the Board of Finance and Revenue which was also refused. This appeal from that refusal was filed and perfected by Eastman.

On November 30, 1971, an evidentiary hearing was held and a record made including as a part thereof a stipulation of facts, together with an agreement to try the case without a jury as provided by section 1 of the Act of April 22, 1874, P.L. 109, 12 P.S. ยง ...


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