Significant Pennsylvania Tax Change
Governor Tom Wolf has announced the successful January 1, 2016 phase-out of Pennsylvania’s Capital Stock and Foreign Franchise tax. The governor notes that the phase-out had been proposed 15 years ago, but the elimination had been delayed several times. The tax was imposed on corporations with capital stock, joint-stock associations, limited liability companies, business trusts, and other companies doing business within Pennsylvania. Domestic corporations were subject to the capital stock tax, while foreign corporations were subject to the foreign franchise tax on capital stock apportioned to Pennsylvania. The Pennsylvania Department of Revenue noted that the elimination of the tax means that many business types, such as S corporations, LLCs taxed as pass-through entities, and business trusts will be filing their final corporation tax returns for 2015. These returns should be marked as final returns.
More information is available on the PA Department of Revenue’s website, and as always, feel free to contact us with any tax-related questions.
– Jenn Crawford