Appeal from the Order of the Board of Finance and Revenue in case of Gilbert Associates, Inc. v. Commonwealth of Pennsylvania, Docket No. C-5236.
Harry J. Rubin, with him Donald D. Geyer, Krekstein Rubin and Lasday, for petitioner.
Vincent J. Dopko, Deputy Attorney General, for respondent.
President Judge Crumlish and Judges Wilkinson, Jr., Rogers, Blatt, Craig, MacPhail and Williams, Jr. Judge Mencer did not participate. Opinion by Judge Rogers.
[ 53 Pa. Commw. Page 144]
Gilbert Associates, Inc., a Delaware Corporation authorized to do business in Pennsylvania, has appealed the settlement by the Board of Finance and Revenue of its franchise tax for the year ending December 31, 1974.
Gilbert and the Commonwealth have stipulated the facts and we adopt those findings as our own. Those necessary to be here recorded follow.
From the date of enactment of the Tax Reform Code of 1971*fn1 to the present date, the taxing departments of the Commonwealth of Pennsylvania, as provided in § 602(a) of the Tax Reform Code, 72 P.S. § 7602(a), have allowed a domestic corporation subject to the Capital Stock Tax to compute its taxable value by using either the single factor property apportionment formula as provided in the Act of June 22, 1931, P.L. 685, 72 P.S. § 1896 or if it has income from business activity which is taxable within and without Pennsylvania, by using the three factor apportionment formula found at Subsection (a)(9) to (18) of Section 401(3) 2 of the Tax Reform Code, 72 P.S. § 7401(3) 2.(a)(9) to (18), as the corporation elects.
From the date of enactment of the Tax Reform Code of 1971 to the present date, the taxing departments of the Commonwealth of Pennsylvania have required a foreign corporation subject to the Franchise Tax to compute such tax by using only the three factor apportionment formula.
[ 53 Pa. Commw. Page 145]
Gilbert Associates, Inc. is a corporation organized and existing under the laws of the State of Delaware. It is duly authorized to do business in Pennsylvania. Its principal office is located in Reading, Pennsylvania. It is engaged in the business of providing engineering, consulting and construction management services, but is not engaged in manufacturing. It does business in states other than Pennsylvania and is entitled to use the statutory three factor apportionment formula in computing its taxable value.
Gilbert duly filed its Franchise Tax Report for the year ended December 31, 1974. In this report it computed tax of $287,145.60 by applying the three factor apportionment formula to a capital stock value of $30,000,000.*fn2
By settlement made on August 4, 1976, the Department of Revenue and Department of the Auditor General computed Gilbert's Franchise Tax for the year ended December 31, ...