Rhoads, Sinon & Reader, Frank A. Sinon, Sherill T. Moyer, Harrisburg, for appellant.
R. Scott Shearer, Vincent J. Dopko, Deputy Attys. Gen., Joseph F. Lynch, Harrisburg, for appellee.
Eagen, C. J., and O'Brien, Roberts, Pomeroy, Nix, Manderino and Packel, JJ. Manderino, J., filed a dissenting opinion.
This case presents the question whether an increased Corporate Net Income Tax rate (12%), enacted on December 31, 1969, but effective retroactively to any income earned during a calendar or fiscal year which began on or after January 1, 1969, subjects a corporate taxpayer which ceased doing business on August 12, 1969, but was not dissolved in 1969, to non-uniform taxation solely because some other corporate taxpayers which ceased doing business in 1969 were assessed at a previously effective lower rate. On this record, we hold the application of the increased rate is constitutional.
Appellant Fisher Controls Co., Inc. [Fisher Controls] is the successor of Fisher Governor Co. [Fisher Governor], which ceased doing business and whose assets and liabilities appellant acquired on August 12, 1969. On March 30, 1970, Fisher Governor filed its final Corporate Net Income Tax report. The Department of Revenue settled the final tax report of Fisher Governor on October 20, 1970. In calculating the tax, the Department applied a tax rate of 12% to net income earned between January 1, 1969 and August 12, 1969, in
accordance with the 1969 amendments to the Corporate Net Income Tax Act of 1935, Act of December 31, 1969, P.L. 407, § 2, formerly codified at 72 P.S. § 3420c [the 1969 amendments],*fn1 now repealed by the Corporate Net Income Tax provisions of the Tax Reform Code of 1971, Act of March 4, 1971, P.L. 74, §§ 401 et seq., as amended, 72 P.S. §§ 7401 et seq. (Supp.1977). The 1969 amendments expressly made the 12% tax rate retroactive to January 1, 1969, for those corporations reporting income on a calendar year basis. For those corporations reporting on a fiscal year basis, the 12% rate in the 1969 amendments applied to any fiscal year beginning in 1969. Fisher Governor reported income on a calendar year basis.
Under the previous provisions of the Corporate Net Income Tax Act of 1935, Act of September 29, 1967, P.L. 301, § 1, formerly codified at 72 P.S. § 3420c [the 1967 amendments], and now repealed, all business corporations would have been taxed at a rate of 7 1/2% in 1969.*fn2 Appellant
asserts that this previously effective tax rate should have been applied to Fisher Governor's income for the ...