What is the Capital Stock and Franchise Tax?


Taxes2Pennsylvania’s capital stock and franchise tax (CSFT) is a property tax imposed on the capital stock value of businesses in Pennsylvania. Determined through a complex formula, it is a tax paid regardless whether a business incurred a loss or made a profit in the previous year. Pennsylvania limited liability companies (other than restricted professional corporations) which are taxed at the federal level as a partnership are subject to the CSFT.

The CSFT essentially represents a double tax on businesses in Pennsylvania, because businesses and business owners also pay either the corporate net-income tax or the personal income tax.

The CSFT has been around for more than a decade, but is due to be phased out next year. However, in a recent speech at the Pennsylvania Press Club, Senate Democrat Leader Jay Costa reportedly recommended raising the Capitol Stock and Franchise Tax and delaying its elimination.

If you have an opinion about raising or extending the CSFT, contact your representative and make your voice heard.

For more information about making sure your business complies with existing laws and regulations, seek the help of a professional business law attorney.  The attorneys at the Scolieri Law Group, P.C. can help you develop a strategy to meet your goals.  Contact us today at (412)765-0546 or info@scolierilaw.com.