(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.
