53 Pa. Commw. 110 | Pa. Commw. Ct. | 1980
Opinion by
The only issue raised on this appeal is whether the amendment adding paragraph number 14 to Section 602(c) of the Tax Reform. Code of 1971
The facts, as stipulated by the parties, may be stated briefly. S. D. Richman Sons, Inc. (Petitioner) is a Pennsylvania corporation engaged in the business of salvaging, recycling, and reprocessing various metal products. Petitioner timely filed its Pennsylvania Corporate Tax Report for its fiscal year ending September 30, 1974. The Capital Stock Tax Return filed by Petitioner indicated a valuation of “None.”
It is undisputed by the parties that Petitioner was eligible for the processing exemption on and after July 20, 1974. Petitionsr continues to assert, however, that it was also entitled to the exemption for October 1, 1973 through July 19, 1974, inclusive. The Commonwealth argues that it was not so entitled.
The law of the Commonwealth is clear that statutory provisions granting taxpayers exemptions from taxation are to be construed strictly. Com
The issue of whether Petitioner is exempt from paying capital stock tax for all of its 1973-74 fiscal year or only for that portion postdating July 20, 1974 rests upon our interpretation of Section 2 of the Act of July 20, 1974 which reads “This act shall take effect immediately.” On its face, there seems to be no question that the statutory exemption is to apply only on and after July 20, 1974. Petitioner, however, draws our attention to a number of taxing statutes which specifically provide for future or past apportionment of taxes and argues that if the Section 602(c) (14) exemption were to be apportioned pre- and post-July 20, 1974, the legislature would have so provided. Rather, Petitioner argues, the amendment is to apply to the entirety of any fiscal year ending after July 20, 1974. Since its fiscal year ended on September 30, 1974,
Contrary to Petitioner’s position on the failure of the legislature to mandate apportionment of the exemption, we find such a failure to indicate clearly that the exemption was not meant to be applied retroactively. As our Supreme Court noted in Commonwealth v. Repplier Coal Co., 348 Pa. 372, 381, 383, 35 A.2d 319, 324, 325 (1944), the legislature knows well how to provide that a statute should be applied retrospectively
The order of the Resettlement Board affirmed by the Board of Finance and Revenue is entirely consistent with the law of the Commonwealth. Petitioner’s valuation period for the taxes here at issue began on October 1, 1973. From that date until July 19, 1974, Petitioner was subject to capital stock taxes. On July 20, 1974, it became exempt from the tax because of its manufacturing processes and it remained exempt until the close of its tax year, September 30, 1974. Petitioner has properly been assessed capital stock taxes for the former period and has properly not been assessed for the latter.
Order
And Now,-this 18th day of July, 1980, the order of the Board of Finance and Revenue, Docket No. R-1668, dated August 31, 1976, unless exceptions are filed within 30 days, is affirmed. Judgment is entered in favor of the Commonwealth and against S. D. Richman Sons, Inc. in the sum of $20,626.80. Upon payment of docket costs by the taxpayer, the judgment shall be marked “Satisfied.”
Act of March 4, 1971, P.L. 6, as amended. The pertinent amendment to Section 602(c) was added by Section 1 of the Act of July 20, 1974, P.L. 542.
Were we to hold that the amendment should be applied retroactively, its earliest effective date would be July 21, 1973.
The capital stock tax is an annual tax on the capital of a corporation. Stenton Gardens, Inc. v. Commonwealth, 12 Pa. Commonwealth Ct. 465, 471, 314 A.2d 549, 552 (1974).
Section 602(a) provides that domestic corporations (with exceptions not herein relevant) shall pay an annual tax on the actual value of its capital stock. The section exempts from taxation corporations organized for manufacturing, processing, research, or development purposes. Section 602(c) (14) includes within its definition of “processing” salvaging, recycling, or reclaiming used materials to be recycled into a manufacturing process.
See, e.g., Section 4 of the Act of July 1, 1978, P.L. 594, amending Section' 602 of the Code which provides that “This act shall take effect immediately and the provisions of section 2 relating to amendments to subsections (a) and (b) of section 602 shall be retroactive to August 31, 1971,” and Section 2 of the Act of July 20, 1974, P.L. 563 amending Section 201 of the Code, 72 P.S. §7201, which provides that “This act shall take effect immediately and shall be retroactive to March 4, 1971.” This latter example is especially illustrative since it was enacted by the same legislature which enacted the amendment at issue here.