Appeal from the Order of the Board of Finance and Revenue in case of Appeal of Vance F. Rigling and Mabel S. Rigling, his wife, Docket No. RPIT-902.
Lloyd R. Persun, with him Shearer, Mette & Woodside, for appellants.
Vincent J. Dopko, Deputy Attorney General, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Mencer, Rogers, Blatt, DiSalle and Craig. Judges Wilkinson, Jr. and MacPhail did not participate. Opinion by President Judge Bowman.
[ 48 Pa. Commw. Page 305]
Vance F. Rigling and Mabel S. Rigling, his wife (taxpayers), have filed a petition for review of an order by the Board of Finance and Revenue (Board) sustaining an assessment by the Department of Revenue (Department) in the amount of $998.00, with interest, on account of their Pennsylvania Personal Income Tax for 1972, levied pursuant to Article III of the Tax Reform Code of 1971 (Code).*fn1 We adopt as our findings of fact in this de novo tax appeal the facts as stipulated by the parties.
These facts disclose that taxpayers, in preparing Schedule D of their 1972 Personal Income Tax return, attempted to minimize taxable income by using the May 31, 1971 close of business day fair market value to calculate gain resulting from the sale of two separate holdings of stock, but acquisition cost to calculate gain on all other Schedule D sales, whichever would yield lesser gain. By letter dated October 24, 1973, the Department informed taxpayers that May 31, 1971 fair market value could not be used to calculate gains on Schedule D, and that it would use acquisition cost to recalculate taxpayers' gain as to the two affected stocks. Taxpayers challenged the Department's action before the Board in a proceedings only collaterally involved in this appeal.
During the pendency of that challenge before the Board, the legislature amended Section 303(a)(3) of the Code, 72 P.S. § 7303(a)(3),*fn2 to provide, retroactively,
[ 48 Pa. Commw. Page 306]
that the basis of property acquired prior to June 1, 1971, would be determined using June 1, 1971, as the acquisition date, and that the basis of property acquired after June 1, 1971, would be determined using the actual acquisition date. By order of August 27, 1974, the Board granted taxpayers' petition for refund as to the two stocks on which taxpayers had calculated gain using the May 31, 1971 close of business day fair market value.
Subsequent to this ruling by the Board, the Department, pursuant to the provisions of the 1974 amendment, recalculated taxpayers' gains on all other 1972 Schedule D stocks acquired prior to June 1, 1971, substituting June 1, 1971 value for actual acquisition cost, and assessed taxpayers additional tax on the additional gains thus indicated. Both the Department's Board of Reassessment and the Board sustained the Department's subsequent assessment. Hence this appeal.
In their brief and in oral argument before this Court taxpayers relied on several different theories to advance what are, in essence, two basic arguments: first, that the Board's initial grant of refund as to the tax assessed on the two 1972 Schedule D stocks, on which taxpayers calculated gain using the May 31, 1971 fair market value, precluded subsequent reassessment of tax by the Department on all other 1972 ...