Appeals from the Orders of the Board of Finance and Revenue in case of Appeal of Northeastern Building Registered, Docket Nos. R-25914 and R-25915.
James S. Palermo, with him Anthony J. Ciotola, for appellant.
Robert P. Coyne, Deputy Attorney General, for appellee.
President Judge Bowman and Judges Wilkinson, Jr., Mencer, Rogers, Blatt, DiSalle and MacPhail. Judges Crumlish, Jr. and Craig did not participate. Opinion by Judge DiSalle.
[ 41 Pa. Commw. Page 404]
This case involves appeals from two orders of the Board of Finance and Revenue sustaining the Department of Revenue's imposition of the capital stock tax*fn1 and the corporate net income tax*fn2 on Northeastern Building Registered (Northeastern) for the 1970 calendar
[ 41 Pa. Commw. Page 405]
year.*fn3 Since Northeastern was a registered partnership,*fn4 and since the Capital Stock Tax Act (CSTA) and Corporate Net Income Tax Act (CNITA) made reference only to limited partnerships,*fn5 Northeastern generally contends that a strict construction of the tax acts precludes imposition of the taxes. The sole question, therefore, is whether a registered partnership is to be taxed as a limited partnership or as a quasi-corporation within the meaning of the CSTA and CNITA. Given the uniformity of language in both acts, our determination of the registered partnership's tax liability under one act will be controlling with regard to the other.
We note that, as here, appeals taken pursuant to Section 1104 of The Fiscal Code, Act of April 9, 1929,
[ 41 Pa. Commw. Page 406]
P.L. 343, as amended, 72 P.S. § 1104, shall be treated as hearings de novo. The parties dispensed with a trial by jury in accordance with the provisions of Section 1 of the Act (Act) of April 22, 1874, P.L. 109, as amended, 12 P.S. § 688, and thereafter entered into a stipulation of facts. While counsel for neither party has made specific request that the Court state separately findings of fact and conclusions of law pursuant to Section 2 of the Act, 12 P.S. § 689, we nevertheless adopt the parties' stipulation of facts as our own and incorporate them herein by reference.
Our inquiry must begin with the opinion letter of the Attorney General dated October 30, 1903, 28 C.C. 582 (1903), wherein the precise question raised in this case was considered. After making a passing reference to the fact that, for purposes of the CSTA, a limited partner's proportional interest in the assets of the limited partnership shall be deemed to be capital stock and thereby taxable, the Attorney General concluded that registered partnerships were subject to the provisions of the CSTA.*fn6 This opinion is noteworthy not only because it was relatively contemporaneous to the passage of the Registered Partnership Act (RPA) itself, but also because it assumes, with little comment, that registered partnerships are a form of limited partnership which are subject to the CSTA.
This rather clear cut determination was somewhat clouded by the decision of the Court of Common Pleas of Dauphin County in Commonwealth v. Biddle & Henry, 2 Pa. D. & C. 705 (1923), wherein the court held that limited partnerships formed pursuant to the Uniform Limited Partnership Act (UPLA) were not subject to the CSTA. In ...