Capital stock is the number of common and preferred shares that a company is authorized to issue, and is recorded in shareholders' equity. Pennsylvania has eliminated the Capital Stock and Foreign Franchise Tax for all taxpayers, effective for tax years beginning on or after January 1, 2016.Capital stock, also known as authorized stock, refers to all common stock and preferred stock a corporation is legally allowed to issue. Companies located in the state were subject to the capital stock tax. The analysis is applied to current events, both in the US and abroad. Students cannot receive credit for taking both FNCE 1010 and ECON 2200. Faculty of Economics and Business. Search. The increase in the third quarter primarily reflected increases in consumer spending, exports, business investment, and federal government spending.