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61. Definitions --
(a) First return—Taxable year-Income-tax taxable year.
(6) Original declared value. 62. Original declared value----63. Adjusted declared value..
71. Proof of exemption.----
and community chests ---
of trade---79. Civic leagues and local associations of employees.. 80. Social clubs.------------------81. Local benevolent life insurance associations, mutual irrigation and
telephone companies, and like organizations.. 82. Farmers' or other mutual hail, cyclone, casualty, or fire insurance
companies or associations 83. Farmers' cooperative marketing and purchasing associations, and cor
porations organized to finance crop operations.
NOT DOING BUSINESS IN THE UNITED STATES-FOREIGN CORPORATIONS
90. Not doing business in the United States-------
RECORDS, STATEMENTS, AND SPECIAL RETURNS-EXAMINATION OF BOOKS AND WITNESSES--LIMITATION ON ABSESSMENTS AND SUITS BY THE UNITED STATESREFUND8-INTEREST ON REFUNDS AND CREDIT8—TERMINATION OF THE CAPITAL STOCK TAX IMPOSED BY SECTION 215 OF THE NATIONAL INDUSTRIAL RECOVERY ACT.
112. Termination of capital stock tax under section 215 of the National
Industrial Recovery Act-
AUTHORITY FOR REGULATIONS
113. Promulgation of regulations.-
Section 701 of the Revenue Act of 1934 imposes a tax upon every domestic corporation with respect to carrying on or doing business for any part of each year ending June 30, beginning with the year ended June 30, 1934. This tax is measured by the adjusted declared value of its capital stock, and is imposed at the rate of $1 for each $1,000 of such value. The tax thus imposed takes the place of, and is similar in many respects to, the tax imposed by section 215 of the National Industrial Recovery Act (48 Stat. 195), but differs from it mainly in the method prescribed for determining the adjusted declared value for years subsequent to the first taxable year.
Just as was provided in section 215 of the National Industrial Recovery Act, a corporation in its first return for the first taxable year may assign any value it desires to its capital stock, but the attention of the corporation is directed to the fact that this value can not be changed and that it will serve as a basis in computing the excessprofits tax imposed by section 702 of the Revenue Act of 1934 and the capital stock tax imposed in subsequent years.
Section 701 of the Revenue Act of 1934 also imposes a tax on foreign corporations with respect to carrying on or doing business in the United States. This tax is measured by the adjusted declared value of the capital of the foreign corporation employed by it in the transaction of its business in the United States.
As in the case of domestic corporations, a foreign corporation may declare any value it wishes in its first return. This value is used as a base in computing the adjusted declared value for each subsequent year, and also serves as a factor in computing the excess-profits tax noted above.
The method of computing the present capital stock tax varies materially from the method prescribed by the Revenue Act of 1924. Under that Act the tax, which was payable in advance, was measured by the fair average value of the capital stock for the year immediately preceding the taxable year, and this value was determined each year, regardless of the value determined for the previous year. In the case of foreign corporations it was determined in like manner but was based on the capital employed in the corporation's business in the United States.
Certain applicable provisions of the internal revenue laws of particular importance will be found printed in the appropriate places in these regulations.
It must constantly be borne in mind that these regulations relate only to the tax imposed by section 701 of the Revenue Act of 1934. With respect to the tax imposed by section 215 of the National Industrial Recovery Act, consult Regulations 64, edition of 1933.