$5,900 upon net incomes of $54,000; and upon net incomes in excess of $54,000 and not in excess of $56,000, 25 per centum in addition of such excess. $6,400 upon net incomes of $56,000; and upon net incomes in excess of $56,000 and not in excess of $58,000, 26 per centum in addition of such excess. $6,920 upon net incomes of $58,000; and upon net incomes in excess of $58,000 and not in excess of $60,000, 27 per centum in addition of such excess. $7,460 upon net incomes of $60,000; and upon net incomes in excess of $60,000 and not in excess of $62,000, 28 per centum in addition of such excess. $8,020 upon net incomes of $62,000; and upon net incomes in excess of $62,000 and not in excess of $64,000, 29 per centum in addition of such excess. $8,600 upon net incomes of $64,000; and upon net incomes in excess of $64,000 and not in excess of $66,000, 30 per centum in addition of such excess. $9,200 upon net incomes of $66,000; and upon net incomes in excess of $66,000 and not in excess of $68,000, 31 per centum in addition of such excess. $9,820 upon net incomes of $68,000; and upon net incomes in excess of $68,000 and not in excess of $70,000, 32 per centum in addition of such excess. $10,460 upon net incomes of $70,000; and upon net incomes in excess of $70,000 and not in excess of $72,000, 33 per centum in addition of such excess. $11,120 upon net incomes of $72,000; and upon net incomes in excess of $72,000 and not in excess of $74,000, 34 per centum in addition of such excess. $11,800 upon net incomes of $74,000; and upon net incomes in excess of $74,000 and not in excess of $76,000, 35 per centum in addition of such excess. $12,500 upon net incomes of $76,000; and upon net incomes in excess of $76,000 and not in excess of $78,000, 36 per centum in addition of such excess. $13,220 upon net incomes of $78,000; and upon net incomes in excess of $78,000 and not in excess of $80,000, 37 per centum in addition of such excess. $13,960 upon net incomes of $80,000; and upon net incomes in excess of $80,000 and not in excess of $82,000, 38 per centum in addition of such excess. $14,720 upon net incomes of $82,000; and upon net incomes in excess of $82,000 and not in excess of $84,000, 39 per centum in addition of such excess. $15,500 upon net incomes of $84,000; and upon net incomes in excess of $84,000 and not in excess of $86,000, 40 per centum in addition of such excess. $16,300 upon net incomes of $86,000; and upon net incomes in excess of $86,000 and not in excess of $88,000, 41 per centum in addition of such excess. $17,120 upon net incomes of $88,000; and upon net incomes in excess of $88,000 and not in excess of $90,000, 42 per centum in addition of such excess. $17,960 upon net incomes of $90,000; and upon net incomes in excess of $90,000 and not in excess of $92,000, 43 per centum in addition of such excess. $18,820 upon net incomes of $92,000; and upon net incomes in excess of $92,000 and not in excess of $94,000, 44 per centum in addition of such excess. $19,700 upon net incomes of $94,000; and upon net incomes in excess of $94,000 and not in excess of $96,000, 45 per centum in addition of such excess. $20,600 upon net incomes of $96,000; and upon net incomes in excess of $96,000 and not in excess of $98,000, 46 per centum in addition of such excess. $21,520 upon net incomes of $98,000; and upon net incomes in excess of $98,000 and not in excess of $100,000, 47 per centum in addition of such excess. $22,460 upon net incomes of $100,000; and upon net incomes in excess of $100,000 and not in excess of $150,000, 48 per centum in addition of such excess. $46,460 upon net incomes of $150,000; and upon net incomes in excess of $150,000 and not in excess of $200,000, 49 per centum in addition of such excess. $70,960 upon net incomes of $200,000; and upon net incomes in excess of $200,000 and not in excess of $300,000, 50 per centum in addition of such excess. $120,960 upon net incomes of $300,000; and upon net incomes in excess of $300,000 and not in excess of $400,000, 51 per centum in addition of such excess. $171,960 upon net incomes of $400,000; and upon net incomes in excess of $400,000 and not in excess of $500,000, 52 per centum in addition of such excess. $223,960 upon net incomes of $500,000; and upon net incomes in excess of $500,000 and not in excess of $750,000, 53 per centum in addition of such excess. $356,460 upon net incomes of $750,000; and upon net incomes in excess of $750,000 and not in excess of $1,000,000, 54 per centum in addition of such excess. $491,460 upon net incomes of $1,000,000; and upon net incomes in excess of $1,000,000, 55 per centum in addition of such excess. (b) Sale of mines and oil or gas wells.-For limitation of surtax attributable to sale of mines and oil or gas wells, see section 102. (c) Capital net gains and losses.-For rate and computation of tax in lieu of normal and surtax in case of net incomes of not less than $16,000, approximately, or in case of net incomes, excluding items of capital gain, capital loss, and capital deductions, of not less than $16,000, approximately, see section 101. (d) Evasion of surtaxes by incorporation. For tax on corporations which accumulate surplus to evade surtax on stockholders, see section 104. ART. 21. Surtax.-In addition to the normal tax imposed by sections 11 and 211 (see articles 11-14 and 1021) a surtax is imposed at the rates specified in section 12 upon the net income of every individual, resident or nonresident. In determining the taxable net income, for the purpose of the surtax, the credits provided by section 25 in the case of the normal tax are not applicable. The tax under section 101 in the case of a capital net gain is in lieu of the normal tax and the surtax. As to limitation on surtax on gain from sale of mines and oil or gas wells, see section 102 and article 511. ART. 22. Computation of surtax.-The following table shows the surtax due for 1932 and subsequent years upon certain specified amounts of net income. In each instance the first figure of the net income in the net-income column is to be excluded and the second figure included. The percentage given opposite applies to the excess of income over the first figure in the net-income column. The last column gives the total surtax on a net income equal to the second figure in the net-income column. The surtax for any amount of net income not shown in the table is computed by adding to the surtax for the largest amount shown which is less than the income, the surtax upon the excess over that amount at the rate indicated in the table. Accordingly, the surtax upon a net income of $63,128 would be $8,347.12, computed as follows: Surtax on $62,000 from table___. Total_---- SEC. 13. TAX ON CORPORATIONS. $8,020.00 327.12 8, 347. 12 (a) Rate of tax.-There shall be levied, collected, and paid for each taxable year upon the net income of every corporation, a tax of 134 per centum of the amount of the net income in excess of the credit against net income provided in section 26. (b) Exempt corporations.-For corporations exempt from tax, see section 103. (c) Improper accumulation of surplus. For tax on corporations which accumulate surplus to evade surtax on stockholders, see section 104. ART. 31. Income tax on corporations.-The Act imposes an income tax on all corporations not expressly exempt (see section 103) at the rate of 134 per cent of the net income subject to tax. For rate of tax on corporations making consolidated returns, see section 141 (c). Every corporation not exempt under section 103 is liable to the tax, and it makes no difference that a domestic corporation may receive no income from sources within the United States. The tax is upon net income, that is, gross income as defined by the Act, less allowable deductions. (See sections 21-24.) Certain credits are allowed against net income and against the amount of the tax. (See sections 26, 131, and 206.) The tax is payable upon the basis of returns rendered by the corporations liable thereto, except that in some cases it is to be paid at the source of the income. (See also sections 47, 52, 53, 144, and 235.) For the income tax on life insurance companies, see sections 201-203; on insurance companies other than life or mutual, section 204. Mutual insurance companies other than life are taxed under section 13. (See section 208.) As to foreign corporations, see sections 53 and 231-238; as to domestic corporations deriving income from sources within possessions of the United States, see section 251; as to China Trade Act corporations, see sections 261-264. For what the term "corporation" includes and for the difference between domestic and foreign corporations, see section 1111 (a) (2) and articles 1311-1314 and 1316–1318. SEC. 14. TAXABLE PERIOD EMBRACING YEARS WITH DIF. FERENT LAWS. If a taxable period embraces portions of two calendar years for which the laws are different, the tax shall be computed as provided in section 105. PART II-COMPUTATION OF NET INCOME SEC. 21. NET INCOME. "Net income means the gross income computed under section 22, less the deductions allowed by section 23. ART. 41. Meaning of net income.-The tax imposed by the Act is upon income. In the computation of the tax various classes of income must be considered: (a) Income (in the broad sense), meaning all wealth which flows in to the taxpayer other than as a mere return of capital. It includes the forms of income specifically described as gains and profits, including gains derived from the sale or other disposition of capital assets. Cash receipts alone do not always accurately reflect income, for the Act recognizes as income-determining factors other items, among which are inventories, accounts receivable, property exhaustion, and accounts payable for expenses incurred. (See sections 22, 23, and 101 and the articles thereunder.) (b) Gross income, meaning income (in the broad sense) less income which is by statutory provision or otherwise exempt from the tax imposed by the Act. (See section 22 and the articles thereunder.) (c) Net income, meaning gross income less statutory deductions. The statutory deductions are in general, though not exclusively, expenditures, other than capital expenditures, connected with the production of income. (See sections 23 and 24 and the articles thereunder.) |