Appeal from the Order of the Board of Finance and Revenue in case of Appeal of Triumph Hosiery Mills, Inc., No. R-52.
Harry J. Rubin, with him Krekstein, Rubin & Lasday, for appellant.
Eugene J. Anastasio, Deputy Attorney General, for appellee.
Jack H. Harper, with him Samuel C. Harry, and, of counsel, Morgan, Lewis & Bockius, for amicus curiae, Brown & Williamson Tobacco Corporation.
N. David Rahal, with him Roy J. Keefer, and Metzger, Hafer, Keefer, Thomas and Wood, for amicus curiae, Chicago Bridge & Iron Company.
Robert L. Weldon, with him Sherill T. Moyer, Frank A. Sinon, and Rhoads, Sinon & Reader, for amicus curiae, American Can Company.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by President Judge Bowman.
[ 21 Pa. Commw. Page 187]
Triumph Hosiery Hills, Inc. (appellant) is a New York corporation which transacts a part of its business in Pennsylvania. By exercising its privilege to engage in business within this state, appellant is necessarily subject to the imposition of the Pennsylvania corporate net income tax.*fn1
Subsequent to appellant's filing of its Pennsylvania corporate net income tax return for the year ending December 31, 1971, the Department of Revenue disagreed with the method employed by appellant in the computation of its tax liability, and settled the tax due to a higher amount. This action precipitated administrative review procedures culminating in the rejection of appellant's contentions.*fn2 Hence this appeal. It is before us on stipulated facts which we adopt in this de novo appeal.
[ 21 Pa. Commw. Page 188]
The Pennsylvania corporate net income tax is measured upon a tax base of "taxable income" which is defined in limine as the "taxable income for the calendar year or fiscal year as returned to and ascertained by the Federal Government. . . ."*fn3 There follow several provisos which are not germane to this controversy. The last sentence of section 401(3)1 is one of two statutory focal points of the parties' dispute.
"In arriving at 'taxable income' for Federal tax purposes . . . any corporate net income tax due to the Commonwealth pursuant to the provisions of this article shall not be allowed as a deduction and the amount of corporate net income tax so due and excluded from Federal taxable income under the Internal Revenue Code shall not be apportioned ...