Court Opinion

ID: 3849368
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:27:17.254624+00
Date Added: 2024-06-11T07:40:49.599693
License: Public Domain

Section 202 (d) requires certain fiscal officers of the Commonwealth to "settle and collect" the tax. Section 707 requires the corporation to make "a capital stock report . . ." and at that time to "compute and pay" the tax "upon or with respect to the value of its capital stock." Section 801 (d) provides that, if dissatisfied "with the appraisement and valuation" made and returned by the officers of the corporation, the Department of Revenue shall "make a valuation thereof . . . [and] settle an account. . . ." Section 806 provides that taxes shall bear interest at six per cent "from the date they are due and payable until sixty (60) days after settlement, and thereafter at the rate of twelve (12) per centum. . . ."
The majority is of opinion, as I understand it, that the words "compute and pay" in section 707 require the officers of the corporation to make the assessment and that, under section 806, interest runs from that date, not on that assessment only, but on any additional assessments subsequently made by the fiscal officers pursuant to sections 202 (d) and 801 (d); in other words, that the interest on the additional assessment made by the State's officers runs from a date prior to it. I regret that I cannot so construe the statute. Effect must be given to the requirement that the corporation "compute and pay" and also to the requirement that the State's officers "settle and collect"; this, in my judgment, the *Page 534 
majority opinion does not do. It is settled that no tax is due until assessment. In Broad  Sansom R. Co. v. Fid. Bldg. Corp.,292 Pa. 287, 291, 141 A. 34, it was said: "Taxes cannot become due until they have been assessed; it is the assessment that makes the taxes and fixes the time when they become due and payable: Laird v. Heister, 24 Pa. 452; Heft v. Gephart, 65 Pa. 510;  McDermott v. Hoffman, 70 Pa. 31." See also Com. v. ChesterCounty Light  Power Co., 339 Pa. 97, 14 A.2d 314.
Section 806 provides that interest shall accrue only after a tax is "due and payable." If no tax is due until there is an assessment, it is important to inquire when, according to the terms of the statute, the assessment is completed. Between section 202(d), requiring state officers to settle the tax, and section 801(d), specifying the method by which they may make the assessment, comes the intervening section 707 requiring the corporation's officers to report the value of the taxable property. When the corporation files this report, the only tax due and payable is that based on the corporation's own valuation.* Thereafter the taxing authorities have the option either of accepting the corporation's computation or of making what is properly described in the Attorney General's brief as an "additional or deficiency assessment." But only on the date of this settlement does the additional tax based on the revised valuation become due. If there is any ambiguity in first imposing on fiscal officers the duty to "settle" the tax, and subsequently requiring corporate officers to compute it and again later (801 (d)) authorizing fiscal officers to make an assessment, the ambiguity must be resolved by the application *Page 535 
of the well settled rule recently repeated in Phipps v. Kirk,333 Pa. 478, 485, 5 A.2d 143, that ". . . tax laws are to be interpreted most strongly against the government, and most favorably to the taxpayers: Husband's Estate, 316 Pa. 361, 369."
I think the statute means that the corporation must file a report showing the valuation and compute and pay the tax on that valuation or be subject to the specified penalties; that the Commonwealth may elect to accept the valuation reported or to revise it and make a new assessment; that interest shall be calculated on the additional or deficiency assessment from this date and not from the earlier date of the corporation's report.
Mr. Chief Justice SCHAFFER and Mr. Justice PATTERSON concur in this opinion.
* Section 703 of the Act of 1929 requires the corporation's report to be verified by affidavit. If the corporate officers make a willfully false return, therefore, they risk prosecution under section 322 of the Act of 1939, P. L. 872, 18 PS section 4322. If they refuse to make any report at all, they are subject to penalties prescribed in section 1702 et seq. of the Act of 1929, as amended by section 1704 of the Act of 1937.