Appeal from the Orders of the Board of Finance and Revenue at Docket, R-25056, R-25057, and R-24347 in cases of Appeals of Allentown Wholesale Grocery Company, orders dated July 28, 1971.
Dean A. Weidner, with him Sherill T. Moyer, Frank A. Sinon and Rhoads, Sinon & Reader, and, of counsel, Whisler, Pearlstine, Talone, Craig & Garrity, 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.
Allentown Wholesale Grocery Company (Allentown) is a Pennsylvania corporation engaged in the business of wholesale food distribution. Allentown timely filed its capital stock and corporate net income tax reports for its fiscal year which commenced December 29, 1968 and ended December 27, 1969. In its reports Allentown calculated its capital stock tax at the rate of six mills and its corporate net income tax at
the rate of seven per centum. In settlement of these taxes the Department of Revenue, with approval of the Auditor General, considered Allentown to be on a calendar year accounting basis commencing January 1, 1969 and ending December 31, 1969 and subject to a capital stock tax rate of seven mills and a corporate net income tax rate of twelve per centum.
Allentown protested the increased tax rates by filing Petitions for Resettlement with the Secretary of Revenue and the Auditor General which were refused. Allentown then filed Petitions for Review with the Board of Finance and Revenue which were denied by orders dated July 28, 1971 and thereafter filed and perfected these two appeals from said orders.
A jury trial has been waived in accordance with the provisions of section 1 of the Act of April 22, 1874, P.L. 109, 12 P.S. § 688. The parties have entered into a stipulation of facts. We adopt the stipulation as our findings of fact and incorporate the same herein by reference. In the course of this opinion we will discuss those facts which, in our judgment, are essential to the disposition of this case.
On March 15, 1966, Allentown filed a Certification of Change in Filing Period with the Secretary of Revenue. The certification, filed pursuant to section 702 of The Fiscal Code of 1929, Act of April 9, 1929, P.L. 343, as amended, 72 P.S. § 702, provides that Allentown's fiscal year ends on the Saturday which last occurs in December of each year. Allentown thereafter commenced a 52-53 week annual fiscal year accounting period and made its tax reports on that basis.
A 52-53 week year is an accounting period which does not necessarily end on the last day of any month. The period ends on the same day of the week, 52 or 53 weeks after the beginning of the period which may begin during any calendar month. The use of the 52-53
week year permits a corporation to divide a calendar year into thirteen uniform and more comparable periods of time to facilitate the keeping of accounting records.
The sole question here is whether the 52-53 week accounting period constitutes a fiscal year basis or a ...