SECTION 198. The Collector, on receiving said tax list and warrant, shall proceed immediately to collect taxes therein levied, and the list and warrant thereto attached shall be his authority and justification against any illegality in the proceedings, prior to receiving the list. And he is also authorized and required to collect, as far as practicable, the taxes remaining unpaid on the list of former years; the Collector shall receipt to each person or corporation for the amount of taxes received by him from them, specifying therein each kind of tax, and when the same was paid, and shaìi make the proper entries of such payment on the tax list.

CHAPTER 26.

INCOME TAX.

SECTION 199. In addition to all other taxes by this Act provided, there shall be annually levied, assessed, collected and paid for annual County revenue purposes upon the gains, profits and income, over and above Eighteen Hundred Dollars, derived by every person residing in the Territory of Hawaii, from all property owned, and every business, trade and profession, employment or vocation carried on in the Territory, by every person residing without the Territory from all property owned, and every business, trade, profession, employment or vocation carried on in the Territory, and by every servant or officer of the Territory, a tax of two per cent. on the amount so derived during the year preceding.

SECTION 200. There shall be levied, assessed, collected and paid annually, except as hereinafter provided, a tax of two per cent. on the net profit or income above actual operating and business expenses, from all property owned, and every business, trade, employment or vocation carried on in any County in the Territory of Hawaii, of all corporations doing business for profit in the Territory, no matter where created and organized; provided, however, that nothing herein contained shall apply to corporations, companies, or associations conducted solely for charitable, religious, educational, or scientific purposes, including fraternal beneficiary societies, nor to insur ance companies taxed on a percentage of the premiums under the authority of another Act.

SECTION 201. In estimating the gains, profits and income of any person or corporation, there shall be included all income derived from interest upon notes, bonds and other securities, except such bonds of the Territory of Hawaii or of municipalities hereafter created by the Territory, the principal and interest of which are by law of their issuance exempt from all taxation; profits realized within the year preceding from sales of real estate, including leaseholds purchased within two years, dividends upon the stock of any corporation, the amount of all premiums on bonds, notes or coupons, the amount of sale of all movable property, less the amount expended in the purchase or production of the same, and in the case of a person not including any part thereof consumed directly by him or his family; money and the value of all personal property acquired by gift or inheritance, and all other gains, profits and income derived from any source what

soever.

SECTION 202. The net profits or income of all corporations shall include the amounts paid or payable to, or distributed or distributable among shareholders from any fund or account or carried to the account of any fund or used for construction, enlargements of plants, or any other expenditure or investment paid from the net annual profits made or acquired by said corporation.

In computing incomes, the necessary expenses actually incurred in carrying on any business, trade, profession or occupation, or in managing any property, shall be deducted, and also all interest paid by such person or corporation on existing indebtedness. And all taxes and license fees paid within the year shall be deducted from the gains, profits or income of the person who or the corporation which has actually paid the same, whether such person or corporation be owner, tenant or mortgagor; also all losses actually sustained during the year incurred in trade or arising from losses by fire not covered by insurance, or losses otherwise actually incurred.

Provided, that no deduction shall be made for any amount paid out for new buildings, permanent improvements or betterments made to increase the value of any property or estate.

Provided, further, that no deduction shall be made for personal or family expenses, the exemption of Eighteen Hundred Dollars mentioned in Section 199 being in lieu of same.

Provided, further, that where allowable herein only one deduction of Eighteen Hundred Dollars shall be made from the

aggregate annual income of all the members of one family composed of one or both parents and one or more minor children, or husband and wife; that guardians shall be allowed to make a deduction in favor of each and every ward, except where two or more wards are comprised in one family, in which case the aggregate deduction in their favor shall not exceed Eighteen Hundred Dollars.

Provided, further, that in assessing the income of any person or corporation there shall not be included the amount received from any corporation as dividends upon the stock of such corporation if the tax of two per cent. has been assessed upon its net profits by said corporation as required by this Act, nor any bequest or inheritance otherwise taxed as such.

SECTION 203. Every corporation doing business for profit in any County of the Territory shall make and render to the Assessor of the County in January of each year, a full return verified by oath or affirmation of its duly empowered officer, in such form as the Auditor of the County may prescribe of all the following matters for the whole twelve months ending December 31st last preceding the date of such return:

First: The gross receipts of such corporation from sales made at home or abroad, and from all kinds of business of any name or nature conducted in said County;

Second: The expenses of such corporation, exclusive of interest, annuities and dividends in said County;

Third: The amount paid on account of interest, annuities and dividends stated separately;

Fourth: The amount expended on permanent improvements;

Fifth: The amount paid in salaries or compensation of more than Six Hundred Dollars to each person employed, and the name and amount paid to each.

Persons or corporations doing business in two or more counties shall make returns for each County.

SECTION 204. It shall be the duty of all persons of lawful age having an income of Six Hundred Dollars or more for the preceding year from all sources and of all corporations made liable to income tax to make and render a list or return in January of each year, in such form as the Auditor of the County may direct, to the Assessor of the County in which such person or corporation resides, locate or do business of the amount of their or its income, gains and profits as aforesaid

in said County; and all guardians, trustees, executors, administrators, agents, receivers, and all corporations or persons acting in a fiduciary capacity, shall make or render a list or return as aforesaid to the Assessor of the County in which such person or corporation acting in a fiduciary capacity resides or does business of the amount of income, gains and profits of any minor or person for whom they act; and the Assessor shall require every list or return to be verified by the oath or affirmation of the person or authorized officer of the corporation making the same.

If any person or corporation refuse or neglect to render such return within the time required as aforesaid, or renders a return which in the opinion of the Board of Supervisors is false and fraudulent, or contains any understatement, it shall be lawful for the Board to summon such person, or any of the officers of such corporation or any person having possession, custody or care of books of accounts containing entries relating to the business of such person or corporation, or any other person it may deem proper, wherever residing or found, to appear before it and produce such books at a time and place named in the summons, and to give testimony or answer interrogations under oath respecting any income liable to tax or the returns thereof. False, wilful testimony given before such Board shall be deemed perjury and punishable as such.

SECTION 205. It shall be the duty of every person or corporation doing business for profit to keep full, regular and accurate books of accounts upon which all its transactions shall be entered from day to day in regular order, which books shall be open to the inspection of the assessor of the County or any person authorized by the Board of Supervisors to inspect the same, during business hours.

SECTION 206. When any person or corporation having a taxable income refuses or neglects to render any return or list required by law or decline to make oath or affirmation thereto, the Assessor may make such assessments as he may consider just and the same shall be binding and conclusive upon all parties and shall not be subject to appeal. In case of any false or fraudulent return or valuation by any tax-payer, the Board of Supervisors shall add two hundred per cent. to a just valuation of the income of such tax-payer, and the amount of the tax assessed on such increase shall become part of the tax on the said income.

SECTION 207. All taxes assessed under the provisions of this Chapter shall be entered on the proper tax list against the name of the person against whom the same is assessed in the same manner as taxes against the real or personal property of such person.

CHAPTER 27.

BOARD OF EQUALIZATION.

SECTION 208. The Board of Supervisors of each County shall constitute a Board of Equalization for the correction and completion of the assessment roll for their respective counties; and the said Board shall hold two regular meetings in each year at the office of the County Clerk at the County Seat as follows: Commencing on the first Monday in April and continuing in session not exceeding six days; and also on the fourth Monday in April and continuing in session for not less than six nor more than fifteen consecutive days, at each of which meetings the Assessor shall be present and advise the Board.

SECTION 209. Said Board shall at its first meeting add to said assessment roll any taxable property in their County not included in the assessment as returned by the Assessor, and shall assess the value thereof. And the said Board may increase, diminish or otherwise alter or correct any assessment or valuation contained in said assessment roll, and may increase, or diminish or otherwise alter the amount of incomeof any person or corporation on which taxes are required by this Act to be levied.

SECTION 210. It shall be the duty of the County Clerk of each County, or the person acting as the Clerk of said Board of Equalization, to notify each person, company, association or corporation whose assessment has been raised or increased by the said Board of Equalization, of the amount of such raise or increase of assessment, or shall notify the agent or agents, attorney or attorneys, or any one of them, or any person, company, association or corporation affected by such raise or increase of assessment as aforesaid.