Current through Register Vol. 54, No. 45, November 9, 2024
Section 155.29 - Minimum tax(a)General. Under the act of December 23, 1983 (P. L. 370, No. 90) that amended Article VI of the TRC (72 P. S. §§ 601-614), applicable commencing with calendar year 1983 and to each year thereafter, a minimum Capital Stock or Foreign Franchise Tax of $75 is imposed on corporations maintaining a corporate tax account. The minimum tax shall be due even in those instances where the actual tax due under the fixed formula or alternative capital stock valuation methods is less than $75. The minimum tax will be prorated if the corporation does not have a full tax year in this Commonwealth.(b)Family farm corporations. Corporations qualifying as family farm corporations under section 602.2 of the TRC (72 P. S. § 7602.2) are not subject to the minimum tax.(c)Inactive corporations. Corporations which are inactive and which have qualified to file and have filed an Out of Existence Affidavit (Form REV-238 CT), in the case of domestic corporations, or a Withdrawal Affidavit (Form REV-238 CT), in the case of foreign corporations, are not subject to the minimum tax commencing with the date the affidavit is filed. Corporations which are inactive and which have not filed either an Out of Existence or Withdrawal Affidavit are subject to the minimum tax. An inactive corporation is one which owns no property, has no employes, does no business and carries on no activities. See § 151.11 (relating to termination).(d)Skeleton reports. Corporations which are inactive and which have been qualified to file and have filed Skeleton Reports under § 151.12 (relating to minimum reporting) are subject to the minimum tax. Example. Corporation A, an inactive foreign corporation, has not filed a Withdrawal Affidavit. In order to retain its corporate name, Corporation A files a Skeleton Report for the calendar year 1985. Corporation A, being inactive, has no net worth. Corporation A had average net income of $20,000 for 1985, based on the following net income or loss:
| 1981 | $90,000 |
| 1982 | $40,000 |
| 1983 | ($10,000) |
| 1984 | ($20,000) |
| 1985 | $0 |
Notwithstanding the fixed formula value of Corporation A of $105,263 (.5 x ($20,000/.095 + (.75)(0)), the Foreign Franchise Tax due would be the minimum tax of $75.
The provisions of this §155.29 adopted January 16, 1987, effective 1/17/1987, 17 Pa.B. 273.The provisions of this §155.29 issued under section 408 of the Tax Reform Code of 1971 (72 P. S. § 7408).
This section cited in 61 Pa. Code § 155.28 (relating to capital stock value methods-fixed formula).