Act of 1924. Act of 1921. Act of 1918. wise a citizen of the United not otherwise a citizen of the not otherwise a citizen of the States) and who is not a resident United States) and who is not a United States) and who is not a of the United States, shall be sub-resident of the United States, resident of the United States, ject to taxation under this title shall be subject to taxation un- shall be subject to taxation unonly as to income derived from der this title only as to income der this title only as to income sources within the United States, derived from sources within the derived from sources within the and in such case the tax shall be United States, and in such case United States, and in such case computed and paid in the same the tax shall be computed and the tax shall be computed and manner and subject to the same paid in the same manner and paid in the same manner and conditions as in the case of other subject to the same conditions subject to the same conditions as persons who are taxable only as as in the case of other persons in the case of other persons who to income derived from such who are taxable only as to in- are taxable only as to income decome derived from such sources. rived from such sources. sources. Nothing in this section shall be construed to alter or amend the provisions of the Act entitled "An Act making appropriations for the naval service for the fiscal year ending June 30, 1922, and for other purposes," approved July 12, 1921, relating to the imposition of income taxes in the Virgin Islands of the United States. Nothing in this section shall be construed to alter or amend the provisions of the Act entitled "An Act making appropriations for the naval service for the fiscal year ending June 30, 1922, and for other purposes," approved July 12, 1921, relating to the imposition of income taxes in the Virgin Islands of the United States. PORTO RICO AND THE PHILIPPINE SEC. 261. In Porto Rico and the Philippine Islands the income tax shall be levied, assessed, collected, and paid as provided by law prior to the enactment of this Act. SEC. 261. That in Porto Rico SEC. 261. That in Porto Rico and the Philippine Islands the and the Philippine Islands the income tax shall be levied, as- income tax shall be levied, assessed, collected, and paid as sessed, collected, and paid in acprovided by law prior to the cordance with the provisions of passage of this Act. the Revenue Act of 1916 as amended. 324 Section I of the Naval Appropriation Act of July 12, 1921, reads in part as follows: "That the income tax laws now in force in the United States of America, and those which may hereafter be enacted, shall be held to be likewise in force in the Virgin Islands of the United States, except that the proceeds of such taxes shall be paid into the treasuries of said Islands," Returns shall be made and taxes shall be paid under Title I of such Act in Porto Rico or the Philippine Islands, as the case may be, by (1) every individual who is a citizen or resident of Porto Rico or the Philippine Islands or derives income from sources therein, and (2) every corporation325 created or organized in Porto Rico or the Philippine Islands or deriving income from sources therein. An individual who is neither a citizen nor a resident of Porto Rico or the Philippine Islands but derives income from sources 325 (a) A corporation organized under the laws of one of the United States, which derived practically all of its income from Porto Rico, owned all of its property, kept its books, and did all of its business there, was taxable under Sec. 201 of the Act of 1917 and Secs, 230 and 301 of the Act of 1918. Porto Act of 1917. Act of 1916. Act of 1913. SEC. 23. That the provisions SEC. 23. That the provisions M. That the provisions of this of this title shall extend to Porto of this title shall extend to Porto section shall extend to Porto Rico and the Philippine Islands: Rico and the Philippine Islands: Rico and the Philippine Islands: Provided, That the administra- Provided, That the administra- Provided, That the administration of the law and the collection tion of the law and the collec- tion of the law and the collecof the taxes imposed in Porto tion of the taxes imposed in tion of the taxes imposed in Rico and the Philippine Islands Porto Rico and the Philippine Porto Rico and the Philippine shall be by the appropriate in- Islands shall be by the appro- Islands shall be by the approternal-revenue officers of those priate internal-revenue officers priate internal-revenue officers governments, and all revenues of those governments, and all of those governments, and all collected in Porto Rico and the revenues collected in Porto Rico revenues collected in Porto Rico Philippine Islands thereunder and the Philippine Islands there- and the Philippine Islands shall accrue intact to the general under shall accrue intact to the thereunder shall accrue intact to Governments thereof, respective- general Governments thereof, re- the general governments thereof, ly: Provided further, That the spectively: Provided further, respectively: And provided furjurisdiction in this title con- That the jurisdiction in this title ther, That the jurisdiction in this ferred upon the district courts conferred upon the district section conferred upon the disof the United States shall, so far courts of the United States shall, trict courts of the United States as the Philippine Islands are so far as the Philippine Islands shall, so far as the Philippine concerned, be vested in the are concerned, be vested in the Islands are concerned, be vested courts of the first instance of courts of the first instance of in the courts of the first instance said islands: And provided fur- said islands: And provided fur- of said islands: And provided ther, That nothing in this title ther, That nothing in this title further, That nothing in this shall be held to exclude from the shall be held to exclude from the section shall be held to exclude Rico Coal Co. v. Edwards (Col.), (D. C., S. D. N. 325 (b) Sec. 230 of the Act of 1918, which subjected corporations organized under the laws of one of the United States to an income tax for the benefit of the United States and Sec. 261 of said Act, which subjected them to an income tax for the benefit of Porto Rico, did not constitute double taxation. Porto Rico Coal Co. v. Edwards (Col.), (D. C., S. D. N. Y. 1921) 275 Fed. 104. Act of 1924. Act of 1921. Act of 1918. therein, shall be taxed in Porto The Porto Rican or the Phil- The Porto Rican or Philippine The Porto Rican or Philippine ippine Legislature shall have Legislature shall have power by Legislature shall have power by power by due enactment to due enactment to amend, alter, due enactment to amend, alter, amend, alter, modify, or repeal modify, or repeal the income tax modify, or repeal the income tax the income tax laws in force in laws in force in Porto Rico or laws in force in Porto Rico or Porto Rico or the Philippine Is- the Philippine Islands, respec- the Philippine Islands, respeclands, respectively. tively. tively. SEC. 1400. (b) [2]327 Title I of the Revenue Act of 1916 as amended by the Revenue Act of 1917 shall remain in force for the assessment and collection of the income tax in Porto Rico and the Philippine Islands, except as may be otherwise provided by their respective legislatures. INCOME FROM SOURCES WITHIN THE POSSESSIONS OF THE INCOME FROM SOURCES WITHIN THE POSSESSIONS OF THE SEC. 262. (a) In the case of SEC. 262. (a) That in the case citizens of the United States or of citizens of the United States domestic corporations, satisfy- or domestic corporations. satising the following conditions, fying the following conditions, gross income means only gross gross income means only gross income from sources within the income from sources within the United StatesUnited States (1) If 80 per centum or more (1) If 80 per centum or more of the gross income of such citi- of the gross income of such citizen or domestic corporation zen or domestic corporation (computed without the benefit (computed without the benefit of this section), for the three- of this section) for the threeyear period immediately preced-year period immediately preceding the close of the taxable year ing the close of the taxable year (or for such part of such period (or for such part of such period 326 Sec. 216, p. 114; Sec. 234 (a) (6), p. 198. 327 Title XIV, Act of 1918. Act of 1917. Act of 1916. Act of 1913. computation of the net income computation of the net income from the computation of the net the compensation paid any offi- income the compensation paid cial by the governments of the any officials by the governments District of Columbia, Porto of the District of Columbia, Rico, and the Philippine Islands, Porto Rico and the Philippine or the political subdivisions Islands or the political subdivithereof. sions thereof. the compensation paid any official by the governments of the District of Columbia, Porto Rico, and the Philippine Islands, or the political subdivisions thereof. SEC. 5. That the provisions of this title shall not extend to Porto Rico or the Philippine Islands, and the Porto Rican or Philippine Legislature shall have power by due enactment to amend, alter, modify, or repeal the income tax laws in force in Porto Rico or the Philippine Islands, respectively. Act of 1924. immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the United States; and (2) If, in the case of such corporation, 50 per centum or more of its gross income (computed without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States; or Act of 1921. immediately preceding the close (2) If, in the case of such cor- (3) If, in the case of such citi- (3) If, in the case of such citizen, 50 per centum or more of zen, 50 per centum or more of his gross income (computed his gross income (computed without the benefit of this sec- without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another. tion) for such period or such SEC. 262. (b) Notwithstanding SEC. 262. (b) Notwithstanding the provisions of subdivision (a) the provisons of subdivision (a) there shall be included in gross there shall be included in gross income all amounts received by income all amounts received by such citizens or corporations such citizens or corporations within the United States, within the United States, whether derived from sources whether derived from sources within or without the United within or without the United States. States. SEC. 262. (c) As used in this section the term "possession of the United States" does not include the Virgin Islands of the United States. SEC. 262. (c) As used in this section the term "possession of the United States" does not include the Virgin Islands of the United States. Act of 1918. CHINA TRADE ACT CORPORATIONS. SEC. 263. (a) For the purpose only of the tax imposed by section 230329 there shall be allowed, in the case of a corporation organized under the China Trade Act, 1922, a credit of an amount| equal to the proportion of the net income derived from sources within China (determined in a similar manner to that provided in section 217) 329 which the par value of the shares of stock of the corporation owned on the "CHINA TRADE ACT CORPORA- 17328 "SEC. 264.328 (a) That for the purpose only of the tax imposed by section 230329 there shall be allowed, in the case of a corporation organized the China Trade Act, 1922, a credit of an amount equal to the proportion of the net income derived from sources within China (determined in a similar manner to that provided in section 217) 329 which the par value of the shares of stock of the corpo 828 Title II of the Act of 1921, amended by the Act of Sept. 19, 1922, by adding at the end thereof, Sec. 264, supra. |