Pennsylvania phased out its 172-year-old capital stock and foreign franchise tax, with Gov. Tom Wolf calling it "an unfair tax on business" that he was committed to eliminating.
The tax, which ended Jan. 1, dates to 1844. Its phase-out had been proposed as far back as 15 years ago, but according to Wolf, previous administrations delayed its elimination.
These taxes were 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 are subject to the foreign franchise tax on capital stock apportioned to Pennsylvania.
The state Department of Revenue noted that eliminating this tax means 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, Wolf said in a statement.
