Chapter 63. To provide revenue to defray war expenses, and for other purposes

26,745 words·~122 min read·/statutes-at-large/vol-40/chapter-63-1305480·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

CHAP. 63.— An Act To provide revenue to defray war expenses, and for other purposes. October 3, 1917. [[H. R. 4280](/us/bill/65/hr/4280).] [[Public, No. 50](/us/pl/65/50).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*, War Revenue Act. Title I.—war income tax.War Income Tax. Section 1. Additional normal tax on Incomes of citizens or residents. Vol. 39, p. 756. *Post*, p. 1119. That in addition to the normal tax imposed by subdivision

(a)of section one of the Act entitled “An Act to increase the revenue, and for other purposes,” approved September eighth, nine301teen hundred and sixteen, there shall he levied, assessed, collected,war income tax. and paid a like normal tax of two per centum upon the income of*Post*, p. 1062. every individual, a citizen or resident of the United States, received in the calendar year nineteen hundred and seventeen and every calendar year thereafter. Sec. 2. That in addition to the additional tax imposed by subdivisionOn incomes exceeding $5,000. Vol. 39, p. 756.

(b)of section one of such Act of September eighth, nineteen hundred and sixteen, there shall be levied, assessed, collected, and paid a like additional tax upon the income of every individual received in the calendar year nineteen hundred and seventeen and every calendar year thereafter, as follows: One per centum per annum upon the amount by which the totalRates. *Post*, p. 1062. net income exceeds $5,000 and does not exceed $7,500; Two per centum per annum upon the amount by which the total net income exceeds $7,500 and does not exceed $10,000; Three per centum per annum upon the amount by which the total net income exceeds $10,000 and does not exceed $12,500; Four per centum per annum upon the amount by which the total net income exceeds $12,500 and does not exceed $15,000; Five per centum per annum upon the amount by which the total net income exceeds $15,000 and does not exceed $20,000; Seven per centum per annum upon the amount by which the total net income exceeds $20,000 and does not exceed $40,000; Ten per centum per annum upon the amount by which the total net income exceeds $40,000 and does not exceed $60,000; Fourteen per centum per annum upon the amount by which the total net income exceeds $60,000 and does not exceed $80,000; Eighteen per centum per annum upon the amount by which the total net income exceeds $80,000 and docs not exceed $100,000; Twenty-two per centum per annum upon the amount by which the total net income exceeds $100,000 and does not exceed $150,000; Twenty-five per centum per annum upon the amount by which the total net income exceeds $150,000 and does not exceed $200,000; Thirty per centum per annum upon the amount by which the total net income exceeds $200,000 and does not exceed $250,000; Thirty-four per centum per annum upon the amount by which the total net income exceeds $250,000 and does not exceed $300,000; Thirty-seven per centum per annum upon the amount by which the total net income exceeds $300,000 and does not exceed $500,000; Forty per centum per annum upon the amount by which the total net income exceeds $500,000 and does not exceed $750,000. Forty-five per centum per annum upon the amount by which the total net income exceeds $750,000 and does not exceed $1,000,000. Fifty per centum per annum upon the amount by which the total net income exceeds $1,000,000. Sec. 3. That the taxes imposed by sections one and two of thisAssessment, payments, etc. Act shall be computed, levied, assessed, collected, and paid upon the same basis and in the same manner as the similar taxes imposed by section one of such Act of September eighth, nineteen hundred and sixteen, except that in the case of the tax imposed by section one of this Act

(a)the exemptions of $3,000 and $4,000 provided in sectionPersonal exemptions reduced. *Post*, p. 331. seven of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, shall be, respectively, $1,000 and $2,000, and

(b)the returns required under subdivisions

(b)and

(c)of sectionReturns required. Vol. 39, p. 762. *Post*, p. 331. eight of such Act as amended by this Act shall be required in the case of net incomes of $1,000 or over, in the case of unmarried persons, and $2,000 or over in the case of married persons, instead of $3,000 or over, as therein provided, and

(c)the provisions of subdivision (c)Withholding new tax at source applicable only after January 1, 1918. *Post*, p. 332. of section nine of such Act, as amended by this Act, requiring the normal tax of individuals on income derived from interest to be deducted and withheld at the source of the income shall not apply to 302 WAR INCOM TAX. the new two per centum normal tax prescribed in section one of this Act until on and after January first, nineteen hundred and eighteen, and thereafter only one two per centum normal tax shall be deducted and withheld at the source under the provisions of such subdivision Further tax payable by recipient.(c), and any further normal tax for which the recipient of such income is liable under this Act or such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, shall be paid by such recipient. Sec. 4. Additional tax on incomes of corporations, etc. *Post*, pp. 333, 1075. That in addition to the tax imposed by subdivision

(a)of section ten of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, there shall be levied, assessed, collected, and paid a like tax of four per centum upon the income received in the calendar year nineteen hundred and seventeen and every calendar year thereafter, by every corporation, joint-stock company or association, or insurance company, subject to the tax imposed by that subdivision of that section, except that if it has Corporation fiscal year 1917.fixed its own fiscal year, the tax imposed by this section for the fiscal year ending during the calendar year nineteen hundred and seventeen shall be levied, assessed, collected, and paid only on that proportion of its income for such fiscal year which the period between January first, nineteen hundred and seventeen, and the end of such fiscal year bears to the whole of such fiscal year. Assessment, payment, etc. *Post*, p. 333.The tax imposed by this section shall be computed, levied, assessed, collected, and paid upon the same incomes and in the same manner as the tax imposed by subdivision

(a)of section ten of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, except that for the purpose of the tax imposed by this section the income embraced in a return of a corporation, joint-stock Credit for tax-paid corporation dividends, etc.company or association, or insurance company, shall be credited with the amount received as dividends upon the stock or from the net earnings of any other corporation, joint-stock company or association, or insurance company, which is taxable upon its net income as provided in this title. Sec. 5. Not applicable to Porto Rico or Philippine Islands. 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. Title II.—war excess profits tax.War Excess Profits Tax. Sec. 200. Vol. 39, p. 1000. Terms construed. That when used in this title— “Corporation.”The term “corporation” includes joint-stock companies or associations and insurance companies; ”Domestic.”The term “domestic” means created under the law of the United States, or of any State, Territory, or District thereof, and the term “Foreign.”“foreign” means created under the law of any other possession of the United States or of any foreign country or government; “United States.” Limitation.The term “United States” means only the States, the Territories of Alaska and Hawaii, and the District of Columbia; “Taxable year.”The term “taxable year” means the twelve months ending December thirty-first, excepting in the case of a corporation or partnership which has fixed its own fiscal year, in which case it means such fiscal First year, 1917.year. The first taxable year shall be the year ending December thirty-first, nineteen hundred and seventeen, except that in the case of a corporation or partnership which has fixed its own fiscal year, it shall be the fiscal year ending during the calendar year nineteen Proportion for fiscal year within 1916.hundred and seventeen. If a corporation or partnership, prior to March first, nineteen hundred and eighteen, makes a return covering its own fiscal year, and includes therein the income received during that part of the fiscal year falling within the calendar year nineteen303hundred and sixteen, the tax for such taxable year shall be that proportionwar excess profits tax. of the tax computed upon the net income during such full fiscal year which the time from January first, nineteen hundred and seventeen, to the end of such fiscal year bears to the full fiscal year; and The term “prewar period” means the calendar years nineteen“Prewar period.” hundred and eleven, nineteen hundred and twelve, and nineteen hundred and thirteen, or, if a corporation or partnership was not in existence or an individual was not engaged in a trade or business during the whole of such period, then as many of such years during the whole of which the corporation or partnership was in existence or the individual was engaged in the trade or business. The terms “trade” and “business” include professions and occupations.“Trade” and “business.” The term “net income” means in the case of a foreign corporation”Net Income” of foreign corporations, etc. or partnership or a nonresident alien individual, the net income received from sources within the United States. Sec. 201. That in addition to the taxes under existing law andAdditional tax on percentages of net incomes. *Post*, p. 1082. under this act there shall be levied, assessed, collected, and paid for each taxable year upon the income of every corporation, partnership, or individual, a tax (hereinafter in this title referred to as the tax) equal to the following percentages of the net income: Twenty per centum of the amount of the net income in excess of theRates on invested capital. deduction (determined as hereinafter provided) and not in excess of fifteen per centum of the invested capital for the taxable year; Twenty-five per centum of the amount of the net income in excess of fifteen per centum and not in excess of twenty per centum of such capital; Thirty-five per centum of the amount of the net income in excess of twenty per centum and not in excess of twenty-five per centum of such capital; Forty-five per centum of the amount of the net income in excess of twenty-five per centum and not in excess of thirty-three per centum of such capital; and Sixty per centum of the amount of the net income in excess of thirty-three per centum of such capital. For the purpose of this title every corporation or partnership notCorporations and partnerships taxed as of single trade or business. exempt under the provisions of this section shall be deemed to be engaged in business, and all the trades and businesses in which it is engaged shall be treated as a single trade or business, and all its income from whatever source derived shall be deemed to be received from such trade or business. This title shall apply to all trades or businesses of whatever description,All trades, etc., in eluded. Exceptions. whether continuously carried on or not, except—

(a)In the case of officers and employees under the United States,Salaries of Federal, State, etc., officials. or any State, Territory, or the District of Columbia, or any local subdivision thereof, the compensation or fees received by them as such officers or employees;

(b)Corporations exempt from tax under the provisions of sectionExempted corporations. etc. Vol. 39, pp. 766, 1001. eleven of Title I of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, and partnerships and individuals carrying on or doing the same business, or coming within the same description; and

(c)Incomes derived from the business of life, health, and accidentWeekly payment insurance. insurance combined in one policy issued on the weekly premium payment plan. Sec. 202. That the tax shall not be imposed in the case of the tradeMinimum taxable income of foreign corporations, etc. or business of a foreign corporation or partnership or a nonresident alien individual, the net income of which trade or business during the taxable year is less than $3,000. 304 Sec. 203. war excess profits tax. Deductions allowed. Domestic corporations. That for the purposes of this title the deduction shall be as follows, except as otherwise in this title provided—

(a)In the case of a domestic corporation, the sum of

(1)an amount equal to the same percentage of the invested capital for the taxable year which the average amount of the annual net income of the trade or business during the prewar period was of the invested capital for the prewar period (but not less than seven or more than nine per centum of the invested capital for the taxable year), and

(2)$3,000;

(b)Partnerships, citizens, or residents. In the case of a domestic partnership or of a citizen or resident of the United States, the sum of

(2)$6,000;

(c)Foreign corporations, etc. In the case of a foreign corporation or partnership or of a nonresident alien individual, an amount ascertained in the same manner as provided in subdivisions

(a)and

(b)without any exemption of $3,000 or $6,000.

(d)Determination by Secretary of the Treasury. If the Secretary of the Treasury is unable satisfactorily to determine the average amount of the annual net income of the trade or business during the prewar period, the deduction shall be *Infra.*determined in the same manner as provided in section two hundred and five. Sec. 204. Amount if no prewar business, etc. That if a corporation or partnership was not in existence, or an individual was not engaged in the trade or business, during the whole of any one calendar year during the prewar period, the deduction shall be an amount equal to eight per centum of the invested capital for the taxable year, plus in the case of a domestic corporation $3,000, and in the case of a domestic partnership or a citizen or resident of the United States $6,000. Determination If new business a continuation of former.A trade or business carried on by a corporation, partnership, or individual, although formally organized or reorganized on or after January second, nineteen hundred and thirteen, which is substantially a continuation of a trade or business carried on prior to that date, shall, for the purposes of this title, be deemed to have been in existence prior to that date, and the net income and invested capital of its predecessor prior to that date shall be deemed to have been its net income and invested capital. Sec. 205. Deductions by Secretary. If no prewar income

(a)That if the Secretary of the Treasury, upon complaint finds either

(1)that during the prewar period a domestic corporation or partnership, or a citizen or resident of the United States, had no If lower than average similar business.net income from the trade or business, or

(2)that during the prewar period the percentage, which the net income Basis of computing.was of the invested capital, was low as compared with the percentage, which the net income during such period of representative corporations, partnerships, and individuals, engaged in a like or similar trade or business, was of their invested capital, then the deduction shall be the sum of

(1)an amount equal to the same percentage of its invested capital for the taxable year which the average deduction (determined in the same manner as provided in section two hundred and three, without including the $3,000 or $6,000 therein referred to) for such year of representative corporations, partnerships, or individuals, engaged in a like or similar trade or business, is of their average invested capital for such year plus

(2)in the case of a domestic corporation $3,000, and in the case of a domestic partnership or a citizen or resident of the United States $6,000. Determination of percentage of net income to invested capital.The percentage which the net income was of the invested capital in each trade or business shall be determined by the Commissioner of Internal Revenue, in accordance with regulations prescribed by him, with the approval of the Secretary of the Treasury. In the case of a 305corporation or partnership which has fixed its own fiscal year, thewar excess profits tax. percentage determined by the calendar year ending during such fiscal year shall be used.

(b)The tax shall be assessed upon the basis of the deduction determinedAssessment. *Ante*, p. 304. Claims for abatement. as provided in section two hundred and three, but the taxpayer claiming the benefit of this section may at the time of making the return file a claim for abatement of the amount by which the tax so assessed exceeds a tax computed upon the basis of the deduction determined as provided in this section. In such event, collection ofCollection delayed. the part of the tax covered by such claim for abatement shall not be made until the claim is decided, but if in the judgment of the Commissioner of Internal Revenue, the interests of the United States would be jeopardized thereby he may require the claimant to give a bond in such amount and with such sureties as the commissionerBond, for payment, etc. may think wise to safeguard such interests, conditioned for the payment of any tax found to be due, with the interest thereon, and if such bond, satisfactory to the commissioner, is not given within such time as he prescribes, the full amount of tax assessed shall be collected and the amount overpaid, if any, shall upon final decision ofReturn of overpayments. the application be refunded as a tax erroneously or illegally collected. Sec. 206. That for the purposes of this title the net income of aAscertaining net incomes of corporations. For 1911, 1912. corporation shall be ascertained and returned

(a)for the calendar years nineteen hundred and eleven and nineteen hundred and twelve upon the same basis and in the same manner as provided in section thirty-eight of the Act entitled “An Act to provide revenue, equalizeVol. 36, p. 112. duties, and encourage the industries of the United States, and for other purposes,” approved August fifth, nineteen hundred and nine, except that income taxes paid by it within the year imposed by theIncome taxes included. authority of the United States shall be included;

(b)for the calendarFor 1913. Vol. 38, p. 172. year nineteen hundred and thirteen upon the same basis and in the same manner as provided in section II of the Act entitled “An Act to reduce tariff duties and to provide revenue for the Government, and for other purposes,” approved October third, nineteen hundred and thirteen, except that income taxes paid by it within the yearIncome taxes included. imposed by the authority of the United States shall be included, and except that the amounts received by it as dividends upon the stockTax-paid dividends deducted. or from the net earnings of other corporations, joint-stock companies or associations, or insurance companies, subject to the tax imposed by section II of such Act of October third, nineteen hundred and thirteen, shall be deducted; and

(c)for the taxable year upon theFor taxable year. same basis and in the same manner as provided in Title I of the ActVol. 39, p. 765. entitled “An Act to increase the revenue, and for other purposes,”*Post*, p. 333. approved September eighth, nineteen hundred and sixteen, as amended by this Act, except that the amounts received by itTax-paid dividends excepted. as dividends upon the stock or from the net earnings of other corporations, joint-stock companies or associations, or insurance companies, subject to the tax imposed by Title I of such Act of September eighth, nineteen hundred and sixteen, shall be deducted. The net income of a partnership or individual shall be ascertainedPartnerships or individuals. and returned for the calendar years nineteen hundred and eleven, nineteen hundred and twelve, and nineteen hundred and thirteen, and for the taxable year, upon the same basis and in the same manner *Post*, p. 331.as provided in Title I of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, except that the creditTax-paid income excepted. Vol. 39, p. 759. Deductions allowed partnerships. allowed by subdivision

(b)of section five of such Act shall be deducted. There shall be allowed

(a)in the case of a domestic partnership the same deductions as allowed to individuals in subdivision

(a)of section five of such Act of September eighth, nineteen hundredVol. 39, p. 759. and sixteen, as amended by this Act; and

(b)in the case of a foreign*Post*, p. 330. partnership the same deductions as allowed to individuals in subdivisionVol. 39, p. 760.

(a)of section six of such Act as amended by this Act.*Post*, p. 330. 306 Sec. 207. war excess profits tax. “Invested capital.” Meaning of, as used. That as used in this title, the term “invested capital” for any year means the average invested capital for the year, as defined and limited in this title, averaged monthly. Non taxable income, borrowed money, etc., excluded.As used in this title “invested capital” does not include stocks, bonds (other than obligations of the United States), or other assets, the income from which is not subject to the tax imposed by this title, nor money or other property borrowed, and means, subject to the above limitations:

(a)Of corporations or partnerships. Cash paid in. Other tangible property paid for stocks or shares. In the case of a corporation or partnership:

(1)Actual cash paid in,

(2)the actual cash value of tangible property paid in other than cash, for stock or shares in such corporation or partnership, at the time of such payment (but in case such tangible property was paid in prior to January first, nineteen hundred and fourteen, the actual cash value of such property as of January first, nineteen hundred and fourteen, but in no case to exceed the par value of the Earned surplus used in business.original stock or shares specifically issued therefor), and

(3)paid in or earned surplus and undivided profits used or employed in the business, exclusive of undivided profits earned during the taxable year: *Proviso*. Patents and copyrights.*Provided*, That

(a)the actual cash value of patents and copyrights paid in for stock or shares in such corporation or partnership, at the time of such payment, shall be included as invested capital, but not to exceed the par value of such stock or shares at the time of such Good will, franchises, and other intangibles.payment, and

(b)the good will, trade-marks, trade brands, the franchise of a corporation or partnership, or other intangible property, shall be included as invested capital if the corporation or partnership made payment bona fide therefor specifically as such in cash or tangible property, the value of such good will, trade-mark, trade brand, franchise, or intangible property, not to exceed the actual In business prior to March 3, 1917.cash or actual cash value of the tangible property paid therefor at the time of such payment; but good will, trade-marks, trade brands, franchise of a corporation or partnership, or other intangible property, bona fide purchased, prior to March third, nineteen hundred and seventeen, for and with interests or shares in a partnership or for Limitation.and with shares in the capital stock of a corporation (issued prior to March third, nineteen hundred and seventeen), in an amount not to exceed, on March third, nineteen hundred and seventeen, twenty Valuation.per centum of the total interests or shares in the partnership or of the total shares of the capital stock of the corporation, shall be included in invested capital at a value not to exceed the actual cash value at the time of such purchase, and in case of issue of stock therefor not to exceed the par value of such stock;

(b)Individuals. Cash paid in. Other tangible property. In the case of an individual,

(1)actual cash paid into the trade or business, and

(2)the actual cash value of tangible property paid into the trade or business, other than cash, at the time of such payment (but in case such tangible property was paid in prior to January Patents, franchises, and other intangibles.first, nineteen hundred and fourteen, the actual cash value of such property as of January first, nineteen hundred and fourteen), and

(3)the actual cash value of patents, copyrights, good will, trade-marks, trade brands, franchises, or other intangible property, paid into the trade or business, at the time of such payment, if payment was Valuation.made therefor specifically as such in cash or tangible property, not to exceed the actual cash or actual cash value of the tangible property bona fide paid therefor at the time of such payment. Foreign corporations. Income in United States.In the case of a foreign corporation or partnership or of a non-resident alien individual the term “invested capital” means that proportion of the entire invested capital, as defined and limited in this title, which the net income from sources within the United States bears to the entire net income. Sec. 208. Computation of capital of reorganized, etc., business under same control. That in case of the reorganization, consolidation or change of ownership of a trade or business after March third, nine-teen hundred and seventeen, if an interest or control in such trade 307or business of fifty per centum or more remains in control of thewar excess profits tax. same persons, corporations, associations, partnerships, or any of them, then in ascertaining the invested capital of the trade or business no asset transferred or received from the prior trade or business shall be allowed a greater value than would have been allowed under this title in computing the invested capital of such prior trade or business if such asset had not been so transferred or received, unless such asset was paid for specifically as such, in cash or tangible property, and then not to exceed the actual cash or actual cash value of the tangible property paid therefor at the time of such payment. Sec. 209. That in the case of a trade or business having no investedTax on trade or business without invested capital. capital or not more than a nominal capital there shall be levied, assessed, collected and paid, in addition to the taxes under existing law and under this Act, in lieu of the tax imposed by section two hundred and one, a tax equivalent to eight per centum of the net income of such trade or business in excess of the following deductions:Deductions allowed. In the case of a domestic corporation $3,000, and in the case of a domestic partnership or a citizen or resident of the United States $6,000; in the case of all other trades or business, no deduction. Sec. 210. That if the Secretary of the Treasury is unable in anyDeductions by the Secretary. case satisfactorily to determine the invested capital, the amount of the deduction shall be the sum of

(1)an amount equal to the sameProportion of net income of average similar business. proportion of the net income of the trade or business received during the taxable year as the proportion which the average deduction (determined in the same manner as provided in section two hundred and three, without including the $3,000 or $6,000 therein referred to) for the same calendar year of representative corporations, partner ships, and individuals, engaged in a like or similar trade or business, bears to the total net income of the trade or business received by such corporations, partnerships, an d individuals, plus

(2)in the caseFurther allowance to domestic persons. of a domestic corporation $3,000, and in the case of a domestic partnership or a citizen or resident of the United States $6,000. For the purpose of this section the proportion between the deductionRules for proportion to be made. and the net income in each trade or business shall be determined by the Commissioner of Internal Revenue in accordance with regulations prescribed by him, with the approval of the Secretary of the Treasury. In the case of a corporation or partnership which has fixed its own fiscal year, the proportion determined for the calendar year ending during such fiscal year shall be used. Sec. 211. That every foreign partnership having a net income ofPartnership returns required. $3,000 or more for the taxable year, and every domestic partnership having a net income of $6,000 or more for the taxable year, shall render a correct return of the income of the trade or business for the taxable year, setting forth specifically the gross income for such year, and the deductions allowed in this title. Such returns shall be rendered at the same time and in the same manner as is prescribed for income-tax returns under Title I of such Act of September eighth,Vol. 39, pp. 761, 770. *Post*, pp. 331, 335. nineteen hundred and sixteen, as amended by this Act. Sec. 212. That all administrative, special, and general provisions ofGeneral laws applicable. law, including the laws in relation to the assessment, remission, collection, and refund of internal-revenue taxes not heretofore specifically repealed, and not inconsistent with the provisions of this title are hereby extended and made applicable to all the provisions of thisVol. 39, pp. 756–777. *Post*, pp. 329–338. title and to the tax herein imposed, and all provisions of Title I of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, relating to returns and payment of the tax therein imposed, including penalties, are hereby made applicable to the tax imposed by this title. Sec. 213. That the Commissioner of Internal Revenue, with theRegulations, etc., to be made. approval of the Secretary of the Treasury, shall make all necessary 308war excess profits tax.regulations for carrying out the provisions of this title, and may require any corporation, partnership, or individual, subject to the provisions of this title, to furnish him with such facts, data, and information as in his judgment are necessary to collect the tax imposed by this title. Sec. 214. Excess-profits tax repealed. Vol. 39, pp., 1000–1002. That Title II (sections two hundred to two hundred and seven, inclusive) of the Act entitled “An Act to provide increased revenue to defray the expenses of the increased appropriations for the Army and Navy, and the extensions of fortifications, and for other purposes,” approved March third, nineteen hundred and seventeen, is hereby repealed. Payments thereon credited to this tax.Any amount heretofore or hereafter paid on account of the tax imposed by such Title II, shall be credited toward the payment of the tax imposed by this title, and if the amount so paid exceeds the amount of such tax the excess shall be refunded as a tax erroneously or illegally collected. Munitions tax. Vol. 39, p. 781, amended. Rate reduced.Subdivision

(1)of section three hundred and one of such Act of September eighth, nineteen hundred and sixteen, is hereby amended so that the rate of tax for the taxable year nineteen hundred and seventeen shall be ten per centum instead of twelve and one-half per centum, as therein provided. To cease January 1, 1918.Subdivision

(2)of such section is hereby amended to read as follows: “(2) This section shall cease to be of effect on and after January first, nineteen hundred and eighteen.” Title III.—war tax on beverages.War Tax on Beverages. Sec. 300. Distilled spirits. Tax on, in bond, produced or imported, increased. Vol. 28, p. 563. Exception. [R. S., sec. 3251, p. 627](/us/rs/s3251/p627), amended. *Post*, pp. 309, 1105. For beverages. That on and after the passage of this Act there shall be levied and collected on all distilled spirits in bond at that time or that have been or that may be then or thereafter produced in or imported into the United States, except such distilled spirits as are subject to the tax provided in section three hundred and three, in addition to the tax now imposed by law, a tax of $1.10 (or, if withdrawn for beverage purposes or for use in the manufacture or production of any article used or intended for use as a beverage, a tax of $2.10) on each proof gallon, or wine gallon when below proof and a proportionate tax at a like rate on all fractional parts of such proof or wine gallon, to be paid by the distiller or importer when withdrawn, and collected under the provisions of existing law. Tax on imported perfumes containing spirits.That in addition to the tax under existing law there shall be levied and collected upon all perfumes hereafter imported into the United States containing distilled spirits, a tax of $1.10 per wine gallon, and Collection at customhouse.a proportionate tax at a like rate on all fractional parts of such wine gallon. Such tax shall be collected by the collector of customs and deposited as internal-revenue collections, under such rules and regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. Sec. 301. Importing, forbidden hereafter. That no distilled spirits produced after the passage of this Act shall be imported into the United States from any foreign country, or from the West Indian Islands recently acquired from Denmark (unless produced from products the growth of such islands, and not then into any State or Territory or District of the United Admission for other than beverages.States in which the manufacture or sale of intoxicating liquor is prohibited), or from Porto Rico, or the Philippine Islands. Under such rules, regulations, and bonds as the Secretary of the Treasury may prescribe, the provisions of this section shall not apply to distilled spirits imported for other than

(1)beverage purposes or

(2)use in the manufacture or production of any article used or intended for use as a beverage. 309 Sec. 302. That at registered distilleries producing alcohol, or otherwar tax on beverages. Filling packages at distilleries. high-proof spirits, packages may be filled with such spirits reduced to not less than one hundred proof from the receiving cisterns and tax paid without being entered into bonded warehouse. Such spiritsTransfers by pipe lines. may also be transferred from the receiving cisterns at such distilleries, by means of pipe lines, direct to storage tanks in the bonded warehouse and may be warehoused in such storage tanks. Such spiritsIn tanks, etc., for storage. may be also transferred in tanks or tank cars to general bonded warehouses for storage therein, either in storage tanks in such warehouses or in the tanks in which they were transferred. Such spiritsTo rectifiers. may also be transferred after tax payment from receiving cisterns or warehouse storage tanks to tanks or tank cars and may be transported in such tanks or tank cars to the premises of rectifiers of spirits. The Commissioner of Internal Revenue, with the approval of theRegulations, etc., to be made. Details. Secretary of the. Treasury, is hereby empowered to prescribe all necessary regulations relating to the drawing off, transferring, gauging, storing and transporting of such spirits; the records to be kept and returns to be made; the size and kind of packages and tanks to be used; the marking, branding, numbering and stamping of such packages and tanks; the kinds of stamps, if any, to be used; and the time and manner of paying the tax; the kind of bond and the penal sum of same. The tax prescribed by law must be paid before such spirits are removedPayment of tax before removal. from the distillery premises, or from general bonded warehouse in the case of spirits transferred thereto, except as otherwise provided by law. Under such regulations as the Commissioner of Internal Revenue, Transfers without warehouse stamps in 30 days.with the approval of the Secretary of the Treasury, may prescribe, distilled spirits may hereafter be drawn from receiving cisterns and deposited in distillery warehouses without having affixed to the packages containing the same distillery warehouse stamps, and such packages, when so deposited in warehouse, may be withdrawn therefrom on the original gauge where the same have remained in such warehouse for a period not exceeding thirty days from the date of deposit. Under such regulations as the Commissioner of Internal Revenue, Ethyl alcohol. Used for other than beverages may be exempted from distillery time limitations.with the approval of the Secretary of the Treasury, may prescribe, the manufacture, warehousing, withdrawal, and shipment, under the provisions of existing law, of ethyl alcohol for other than (1 ) beverage purposes or

(2)use in the manufacture or production of any article used or intended for use as a beverage, and denatured alcohol,Denatured alcohol. [R. S., sec. 3283, p. 635](/us/rs/s3283/p635). may be exempted from the provisions of section thirty-two hundred and eighty-three, Revised Statutes of the United States. Under such regulations as the Commissioner of Internal Revenue,Time for filling tubs diminished. [R. S., sec. 3285, p. 635](/us/rs/s3285/p635). with the approval of the Secretary of the Treasury, may prescribe, manufacturers of ethyl alcohol for other than beverage purposes mayVol. 21, p. 145. be granted permission under the provisions of section thirty-two hundred and eighty-five, Revised Statutes of the United States, to fill fermenting tub in a sweet-mash distillery not oftener than once in forty-eight hours. Sec. 303. That upon all distilled spirits produced in or importedAdditional tax on stock held by retailers. into the United States upon which the tax now imposed by law has been paid, and which, on the day this Act is passed, are held by a retailer in a quantity in excess of fifty gallons in the aggregate, or byQuantity affected. any other person, corporation, partnership, or association in any quantity, and which are intended for sale, there shall be levied, assessed, collected, and paid a tax of $1.10 (or, if intended for sale for beverage purposes or for use in the manufacture or production of any article used or intended for use as a beverage, a tax of $2.10) on each proof gallon, and a proportionate tax at a like rate on all fractional parts of such proof gallon: *Provided*, That the tax on such distilled*Proviso*. In custody of a bankrupt court. spirits in the custody of a court of bankruptcy in insolvency proceed310war tax on beverages.ings on June first, nineteen hundred and seventeen, shall be paid by the person to whom the court delivers such distilled spirits at the Limit.time of such delivery, to the extent that the amount thus delivered exceeds the fifty gallons hereinbefore provided. Sec. 304. Rectified spirits. Additional tax on. That in addition to the tax now imposed or imposed by this Act on distilled spirits there shall be levied, assessed, collected, and paid a tax of 15 cents on each proof gallon and a proportionate tax at a like rate on all fractional parts of such proof gallon on all distilled spirits or wines hereafter rectified, purified, or refined in such manner, and on all mixtures hereafter produced in such manner, that the person so rectifying, purifying, refining, or mixing the same [R. S., sec. 3244, p. 623](/us/rs/s3244/p623).is a rectifier within the meaning of section thirty-two hundred and *Proviso*. Gin excepted.forty-four, Revised Statutes, as amended, and on all such articles in the possession of the rectifier on the day this Act is passed: *Provided*, That this tax shall not apply to gin produced by the redistillation of a pure spirit over juniper berries and other aromatics. Reduction of proof after rectifying, unlawful.When the process of rectification is completed and the tax prescribed by this section has been paid, it shall be unlawful for the rectifier or other dealer to reduce in proof or increase in volume such spirits or wine by the addition of water or other substance; nothing Reusing permitted.herein contained shall, however, prevent a rectifier from using again in the process of rectification spirits already rectified and upon which the tax has theretofore been paid. Exemptions from additional tax. Tax paid cordials or liqueurs. Vol. 39, p. 786.The tax imposed by this section shall not attach to cordials or liqueurs on which a tax is imposed and paid under the Act entitled “An Act to increase the revenue, and for other purposes,” approved September eighth, nineteen hundred and sixteen, nor to the mixing Blending pure wines and straight whiskies.and blending of wines, where such blending is for the sole purpose of perfecting such wines according to commercial standards, nor to blends made exclusively of two or more pure straight whiskies aged in wood for a period not less than four years and without the addition of coloring or flavoring matter or any other substance than pure *Proviso*. Whisky restrictions.water and if not reduced below ninety proof: *Provided*, That such blended whiskies shall be exempt from tax under this section only when compounded under the immediate supervision of a revenue officer, in such tanks and under such conditions and supervision as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. Uniform regulations to govern use, etc.All distilled spirits taxable under this section shall be subject to uniform regulations concerning the use thereof in the manufacture, blending, compounding, mixing, marking, branding, and sale of whisky and rectified spirits, and no discrimination whatsoever shall be made by reason of a difference in the character of the material from which same may have been produced. Rectifiers. Rules for business of.The business of a rectifier of spirits shall be carried on, and the tax on rectified spirits shall be paid, under such rules, regulations, and bonds as may be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury. Punishment for violations.Any person violating any of the provisions of this section shall be deemed to be guilty of a misdemeanor and, upon conviction, shall be fined not more than $1,000 or imprisoned not more than two years. Double tax for evasions.He shall, in addition, be liable to double the tax evaded together with the tax, to be collected by assessment or on any bond given. Sec. 305. Exchange of stamps restricted. That hereafter collectors of internal revenue shall not furnish wholesale liquor dealer’s stamps in lieu of and in exchange for stamps for rectified spirits unless the package covered by stamp for rectified spirits is to be broken into smaller packages. Stamps discontinued.The Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, is authorized to discontinue the use of the following stamps whenever in his judgment the interests of the Government will be subserved thereby: 311 Distillery warehouse, special bonded warehouse, special bonded rewarehouse,war tax on beverages. general bonded warehouse, general bonded retransfer, transfer brandy, export tobacco, export cigars, export oleomargarine and export fermented liquor stamps. Sec. 306. That the Commissioner of Internal Revenue, with theMeters, tanks, etc., required to be used. approval of the Secretary of the Treasury, is hereby authorized to require at distilleries, breweries, rectifying houses, and wherever else in his judgment such action may be deemed advisable, the installation of meters, tanks, pipes, or any other apparatus for the purpose of protecting the revenue, and such meters, tanks, and pipes and allExpense of installing, etc. necessary labor incident thereto shall be at the expense of the person, corporation, partnership, or associationBusiness forbidden on noncompliance. on whose premises the installation is required. Any such person, corporation, partnership, or association refusing or neglecting to install such apparatus when so required by the commissioner shall not be permitted to conduct business on such premises. Sec. 307. That on and after the passage of this Act there shall beFermented liquors. Additional tax on. *Post*, p. 1109. levied and collected on all beer, lager beer, ale, porter, and other similar fermented liquor, containing one-half per centum, or more of alcohol, brewed or manufactured and sold, or stored, in warehouse, or removed for consumption or sale, within the United States, byVol. 39, p. 783. whatever name such liquors may be called, in addition to the tax now imposed by law, a tax of $1.50 for every barrel containing not more than thirty-one gallons, and at a like rate for any other quantity or for the fractional parts of a barrel authorized and definen by law. Sec. 308. That from and after the passage of this Act taxableRemoval to industrial distilleries without paying tax. etc. Vol. 38, p. 199. fermented liquors may be conveyed without payment of tax from the brewery premises where produced to a contiguous industrial distillery of either class established under the Act of October third, nineteen hundred and thirteen, to be used as distilling material, and the residue from such distillation, containing less than one-half of one per centum of alcohol by volume, which is to be used in making beverages, may be manipulated by cooling, flavoring, carbonating, settling, and filtering on the distillery premises or elsewhere. The removal of the taxable fermented liquor from the breweryRegulations, etc., to be made. to the distillery and the operation of the distillery and removal of the residue therefrom shall be under the supervision of such officer or officers as the Commissioner of Internal Revenue shall deem proper, and the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, is hereby authorized to make such regulations from time to time as may be necessary to give force and effect to this section and to safeguard the revenue. Sec. 309. That upon all still wines, including vermuth, and uponWines, liqueurs, etc. Additional tax on, produced or imported. Vol. 39, p. 783. *Post*, p. 1110. all champagne and other sparkling wines, liqueurs, cordials, artificial or imitation wines or compounds sold as wine, produced in or imported into the United States, and hereafter removed from the custom-house, place of manufacture, or from bonded premises for sale or consumption, there shall be levied and collected, in addition to the tax now imposed by law upon such articles, a tax equal to such tax, to be levied, collected, and paid under the provisions of existing law. Sec. 310. That upon all articles specified in section three hundredQuantity of stock on hand taxable. and nine upon which the tax now imposed by law has been paid and which are on the day this Act is passed held in excess of twenty-five gallons in the aggregate of such articles and intended for sale, there shall be levied, collected, and paid a tax equal to the tax imposed by such section. Sec. 311. That upon all grape brandy or wine spirits withdrawn byBrandy withdrawn for fortifying wines. Tax on, doubled. Vol. 39, p. 784. a producer of wines from any fruit distillery or special bonded warehouse under subdivision

(c)of section four hundred and two of the 312war tax on beverages.Act entitled “An Act to increase the revenue, and for other purposes,” approved September eighth, nineteen hundred and sixteen, there shall be levied, assessed, collected, and paid in addition to the tax therein imposed, a tax equal to double such tax, to be assessed, collected, and paid under the provisions of existing law. Sec. 312. Used in fortified wines. Additional tax. That upon all sweet wines held for sale by the producer thereof upon the day this Act is passed there shall be levied, assessed, collected, and paid an additional tax equivalent to 10 cents per proof gallon upon the grape brandy or wine spirits used in the fortification On hand for fortifying.of such wine, and an additional tax of 20 cents per proof gallon shall be levied, assessed, collected, and paid upon all grape brandy or wine spirits withdrawn by a producer of sweet wines for the purpose of fortifying such wines and not so used prior to the passage of this Act. Sec. 313. Unfermented liquors, etc. Sirups and extracts for soft drinks. That there shall be levied, assessed, collected, and paid—

(a)Upon all prepared sirups or extracts (intended for use in the manufacture or production of beverages, commonly known as soft Tax on sales by producer, etc. *Post*, p. 1116.drinks, by soda fountains, bottling establishments, and other similar places) sold by the manufacturer, producer, or importer thereof, if so sold for not more than $1.30 per gallon, a tax of 5 cents per gallon; if so sold for more than $1.30 and not more than $2 per gallon, a tax of 8 cents per gallon; if so sold for more than $2 and not more than $3 per gallon, a tax of 10 cents per gallon; if so sold for more than $3 and not more than $4 per gallon, a tax of 15 cents per gallon; and if so sold for more than $4 per gallon, a tax of 20 cents per gallon; and

(b)Bottled grape juice, soft drinks, etc. Tax on sales by producer, etc. Upon all unfermented grape juice, soft drinks or artificial mineral waters (not carbonated), and fermented liquors containing less than one-half per centum of alcohol, sold by the manufacturer, producer, or importer thereof, in bottles or other closed containers, and Ginger ale, etc.upon all ginger ale, root beer, sarsaparilla, pop, and other carbonated waters or beverages, manufactured and sold by the manufacturer, producer, or importer of the carbonic acid gas used in carbonating the same, a tax of 1 cent per gallon; and

(c)Natural mineral waters. Tax on sales by producer, etc. Upon all natural mineral waters or table waters, sold by the producer, bottler, or importer thereof, in bottles or other closed containers, at over 10 cents per gallon, a tax of 1 cent per gallon. Sec. 314. Monthly returns by manufacturer, etc. That each such manufacturer, producer, bottler, or importer shall make monthly returns under oath to the collector of internal revenue for the district in which is located the principal place of business, containing such information necessary for the assessment of the tax, and at such times and in such manner, as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulation prescribe. Sec. 315. Carbonic acid gas in drums, etc. Tax on sales by producer, etc. *Post*, p. 1116. That upon all carbonic acid gas in drums or other containers (intended for use in the manufacture or production of carbonated water or other drinks) sold by the manufacturer, producer, or importer thereof, there shall be levied, assessed, collected, and paid Manner of payment.a tax of 5 cents per pound. Such tax shall be paid by the purchaser to the vendor thereof and shall be collected, returned, and paid to the United States by such vendor in the same manner as provided in section five hundred and three. Title IV.—war tax on cigars and tobacco.War Tax on Cigars, Tobacco, and Manufactures Thereof. Sec. 400. Additional tax on sales by manufacturer, etc. Vol. 36, p. 111. [R. S., sec. 3394](/us/rs/s3394/), p. 566, amended. Cigars. Rates. *Post*, p. 1116. That upon cigars and cigarettes, which shall be manufactured and sold, or removed for consumption or sale, there shall be levied and collected, in addition to the taxes now imposed by existing law, the following taxes, to be paid by the manufacturer or importer thereof:

(a)on cigars of all descriptions made of tobacco, or any substitute therefor, and weighing not more than three pounds 313per thousand, 25 cents per thousand:

(b)on cigars made of tobacco,cigars and tobacco war tax. or any substitute therefor, and weighing more than three pounds per thousand, if manufactured or imported to retail at 4 cents or more each, and not more than 7 cents each, $1 per thousand;

(c)if manufactured or imported to retail at more than 7 cents each and not more than 15 cents each, $ per thousand;

(d)if manufactured or imported to retail at more than 15 cents each and not more than 20 cents each, $5 per thousand;

(e)if manufactured or imported to retail at more than 20 cents each, $7 per thousand: *Provided*, That*Proviso*. Retail price construed. the word “retail” as used in this section shall mean the ordinary retail price of a single cigar, and that the Commissioner of Internal Revenue may, by regulation, require the manufacturer or importer to affix to each box or container a conspicuous label indicating byLabel to indicate tax. letter the clause of this section under which the cigars therein contained have been tax-paid, which must correspond with the tax-paid stamp on said box or container;

(f)on cigarettes made of tobacco,Cigarettes. or any substitute therefor, made in or imported into the United States, and weighing not more than three pounds per thousand, 80 cents per thousand; weighing more than three pounds per thousand, $1.20 per thousand. Every manufacturer of cigarettes (including small cigars weighing Cigarette packages allowed. Domestic. Vol. 36, p. 109. [R. S., sec. 3392, p. 666](/us/rs/s3392/p566), amended.not more than three pounds per thousand) shall put up all the cigarettes and such small cigars that he manufactures or has manufactured for him, and sells or removes for consumption or use, in packages or parcels containing five, eight, ten, twelve, fifteen, sixteen, twenty, twenty-four, forty, fifty, eighty, or one hundred cigarettes each, and shall securely affix to each of said packages or parcels a suitableStamps. stamp denoting the tax thereon and shall properly cancel the same prior to such sale or removal for consumption or use under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe; and allImported. cigarettes imported from a foreign country shall be packed, stamped, and the stamps canceled in a like manner, in addition to the import stamp indicating inspection of the custom-house before they are withdrawn therefrom. Sec. 401. That upon all tobacco and snuff hereafter manufacturedManufactured tobacco and snuff. Additional tax. Vol. 36, p. 108. [R. S., sec. 3368, p. 658](/us/rs/s3368/p658), amended. and sold, or removed for consumption or use, there shall be levied and collected, in addition to the tax now imposed by law upon such articles, a tax of 5 cents per pound, to be levied, collected, and paid under the provisions of existing law. In addition to the packages provided for under existing law, manufacturedAdditional packages allowed. Vol. 36, p. 108. [R. S., sec. 3362, p. 657](/us/rs/s3362/p657), amended. tobacco and snuff may be put up and prepared by the manufacturer for sale or consumption, in packages of the following description: Packages containing one-eighth, three-eighths, five-eighths, seven-eighths, one and one-eighth, one and three-eighths, one and five-eighths, one and seven-eighths, and five ounces. Sec. 402. That sections four hundred, four hundred and one, andTax to take effect in 30 days. four hundred and four, shall take effect thirty days after the passage of this Act: *Provided*, That after the passage of this Act and*Proviso*. New packages allowed before. before the expiration of the aforesaid thirty days, cigarettes and manufactured tobacco and snuff may be put up in the packages now provided for by law or in the packages provided for in sections four hundred and four hundred and one. Sec. 403. That there shall also be levied and collected, upon allTax paid stock on hand. Quantity allowed at ball the increased rate. manufactured tobacco and snuff in excess of one hundred pounds or upon cigars or cigarettes in excess of one thousand, which were manufactured or imported, and removed from factory or customhouse prior to the passage of this Act, bearing tax-paid stamps affixed to such articles for the payment of the taxes thereon, and which are, on the day after this Act is passed, held and intended for sale by any person, corporation, partnership, or association, and 314cigars and tobacco war tax.upon all manufactured tobacco, snuff, cigars, or cigarettes, removed from factory or customs house after the passage of this Act but prior to the time when the tax imposed by section four hundred or section four hundred and one upon such articles takes effect, an additional tax equal to one-half the tax imposed by such sections upon such articles. Sec. 404. Cigarette papers and tubes. Stamp tax on. That there shall be levied, assessed, and collected upon cigarette paper made up into packages, books, sets, or tubes, made up in or imported into the United States and intended for use by the smoker in making cigarettes the following taxes: On each package, book, or set, containing more than twenty-five but not more than fifty papers, one-half of 1 cent; containing more than fifty but not more than one hundred papers, 1 cent; containing more than one hundred papers, 1 cent for each one hundred papers or fractional part thereof; and upon tubes, 2 cents for each one hundred tubes or fractional part thereof. Title V.—public utilities and insurance.War Tax on Facilities Furnished by Public Utili ties, and Insurance. Sec. 500. War tax on transportation. *Post*, p. 1101. That from and after the first day of November, nineteen hundred and seventeen, there shall be levied, assessed, collected, and Of interstate freight.paid

(a)a tax equivalent to three per centum of the amount paid for the transportation by rail or water or by any form of mechanical motor power when in competition with carriers by rail or water of property by freight consigned from one point in the United States Express packages.to another;

(b)a tax of 1 cent for each 20 cents, or fraction thereof, paid to any person, corporation, partnership, or association, engaged m the business of transporting parcels or packages by express over regular routes between fixed terminals, for the transportation of any package, parcel, or shipment by express from one point in the United *Provisos*. Lists by carrier.States to another: *Provided*, That nothing herein contained shall be construed to require the carrier collecting such tax to list separately in any bill of lading, freight receipt, or other similar document, the amount of the tax herein levied, if the total amount of the freight and Passenger.tax be therein stated;

(c)a tax equivalent to eight per centum of the amount paid for the transportation of persons by rail or water, or by any form of mechanical motor power on a regular established line when in competition with carriers by rail or water, from one point in the United States to another or to any point in Canada or Mexico, Minimum amount.where the ticket therefor is sold or issued in the United States, not including the amount paid for commutation or season tickets for trips less than thirty miles, or for transportation the fare for which Seats, berths, and staterooms.does not exceed 35 cents, and a tax equivalent to ten per centum of the amount paid for scats, berths, and staterooms in parlor cars, Collection on prior purchases, or cash fares.sleeping cars, or on vessels. If a mileage book used for such transportation or accommodation has been purchased before this section takes effect, or if cash fare be paid, the tax imposed by this section shall be collected from the person presenting the mileage book, or paying the cash fare, by the conductor or other agent, when presented for such transportation or accommodation, and the amount so collected shall be paid to the United States in such manner and at such times as the Commissioner of Internal Revenue, with the approval Partially used tickets.of the Secretary of the Treasury, may prescribe; if a ticket (other than a mileage book) is bought and partially used before this section goes into effect it shall not be taxed, but it bought but not so used before this section takes effect, it shall not be valid for passage until the tax has been paid and such payment evidenced on the ticket in such manner as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulation pre 315scribe;

(d)a tax equivalent to five per centum of the amount paidpublic utilities. Oil by pipe lines. Messages, telegraph, etc. for the transportation of oil by pipe line;

(e)a tax of 5 cents upon each telegraph, telephone, or radio, dispatch, message, or conversation, which originates within the United States, and for the transmission of which a charge of 15 cents or more is imposed: *Provided*,Only one tax on message. That only one payment of such tax shall be required, notwithstanding the lines or stations of one or more persons, corporations, partnerships, or associations shall be used for the transmission of such dispatch, message, or conversation. Sec. 501. That the taxes imposed by section five hundred shall beUser of facilities to pay tax. paid by the person, corporation, partnership, or association paying or the services or facilities rendered. In case such carrier does not, because of its ownership of the commodityPayment on commodities owned by carrier. transported, or for any other reason, receive the amount which as a carrier it would otherwise charge, such carrier shall pay a tax equivalent to the tax which would be imposed upon the transportation of such commodity if the carrier received payment for such transportation: *Provided*, That in case of a carrier which on*Provisos*. Basis if no rates filed. May first, nineteen hundred and seventeen, had no rates or tariffs on file with the proper Federal or State authority, the tax shall be computed on the basis of the rates or tariffs of other carriers for like services as ascertained and determined by the Commissioner of Internal Revenue: *Provided further*, That nothing in this or the precedingExemptions. Used in business of carrier. section shall be construed as imposing a tax

(a)upon the transportation of any commodity which is necessary for the use of the earner in the conduct of its business as such and is intended to be so used or has been so used; or

(b)upon the transportation ofFor carrier of same system. company material transported by one carrier, which constitutes a part of a railroad system, for another earner which is also a part of the same system. Sec. 502. That no tax shall be imposed under section five hundredServices to Government, States, etc., not taxed. upon any payment received for services rendered to the United States, or any State, Territory, or the District of Columbia. The right to exemption under this section shall be evidenced in such manner as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulation prescribe. Sec. 503. That each person, corporation, partnership, or associationReturns of collections by carriers, etc. receiving any payments referred to in section five hundred shall collect the amount of the tax, if any, imposed by such section from the person, corporation, partnership, or association making suchPayment. payments, and shall make monthly returns under oath, in duplicate, and pay the taxes so collected and the taxes imposed upon it under paragraph two of section five hundred and one to the collector of internal revenue of the district in which the principal office or place of business is located. Such returns shall contain such information,Contents of returns, etc. and be made in such manner, as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulation prescribe.insurance. Sec. 504. That from and after the first day of November, nineteenInsurance policies. Tax levied on. *Post*, p. 1104. hundred and seventeen, there shall be levied, assessed, collected, and paid the following taxes on the issuance of insurance policies:

(a)Life insurance: A tax equivalent to 8 cents on each $100 orLife. fractional part thereof of the amount for which any life is insured under any policy of insurance, or other instrument, by whatever name the same is called: *Provided*, That on all policies for life insurance*Provisos*. Small weekly payment. only by which a life is insured not in excess of $500, issued on the industrial or weekly-payment plan of insurance, the tax shall be forty per centum of the amount of the first weekly premium: *Provided further*, That policies of reinsurance shall be exempt fromReinsurance exempt. the tax imposed by this subdivision; 316

(b)Insurance. Marine, inland, and fire. Marine, inland, and fire insurance: A tax equivalent to 1 cent on each dollar or fractional part thereof of the premium charged under each policy of insurance or other instrument by whatever name the same is called whereby insurance is made or renewed upon property of any description (including rents or profits), whether against peril by sea or inland waters, or by fire or lightning, or other *Proviso*. Reinsurance exempt.peril: *Provided*, That policies of reinsurance shall he exempt from the tax imposed by this subdivision;

(c)Casualty. Casualty insurance: A tax equivalent to 1 cent on each dollar or fractional part thereof of the premium charged under each policy of insurance or obligation of the nature of indemnity for loss, damage, Exception.or liability (except bonds taxable under subdivision two of schedule A *Post*, p. 321.of Title VIII) issued or executed or renewed by any person, corporation, partnership, or association, transacting the business of employer’s liability, workmen’s compensation, accident, health, tornado, plate glass, steam boiler, elevator, burglary, automatic sprinkler, automobile, or other branch of insurance (except life insurance, and *Proviso*. Reinsurance exempt.insurance described and taxed in the preceding subdivision): *Provided*, That policies of reinsurance shall be exempt from the tax imposed by this subdivision;

(d)Issued by exempted associations, etc., exempt. Policies issued by any person, corporation, partnership, or association, whose income is exempt from taxation under Title I of Vol. 39, pp. 766, 767.the Act entitled “An Act to increase the revenue, and for other purposes,” approved September eighth, nineteen hundred and sixteen, shall be exempt from the taxes imposed by this section. Sec. 505. Monthly returns by ssuer. That every person, corporation, partnership, or association, issuing policies of insurance upon the issuance of which a tax is imposed by section five hundred and four, shall, within the first fifteen days of each month, make a return under oath, in duplicate, Payment.and pay such tax to the collector of internal revenue of the district in which the principal office or place of business of such person, Contents of returns.corporation, partnership, or association is located. Such returns shall contain such information and be made in such maimer as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulation prescribe. Title VI.—War Excise Taxes. Sec. 600. On sales by producers, etc.Motor vehicles.*Post*, p. 1122. That there shall be levied, assessed, collected, and paid—

(a)Upon all automobiles, automobile trucks, automobile wagons, and motorcycles, sold by the manufacturer, producer, or importer, a tax equivalent to three per centum of the price for which so sold; and

(b)Mechanical musical instruments, etc. Upon all piano players, graphophones, phonographs, talking machines, and records used in connection with any musical instrument, piano player, graphophone, phonograph, or talking machine, sold by the manufacturer, producer, or importer, a tax equivalent to three per centum of the price for which so sold; and

(c)Films for moving pictures. Upon all moving-picture films (which have not been exposed) sold by the manufacturer or importer a tax equivalent to one-fourth of 1 cent per linear foot; and

(d)Moving-picture films. Upon all positive moving-picture films (containing a picture ready for projection) sold or leased by the manufacturer, producer, or importer, a tax equivalent to one-half of 1 cent per linear foot; and

(e)Jewelry. Upon any article commonly or commercially known as jewelry, whether real or imitation, sold by the manufacturer, producer, or importer thereof, a tax equivalent to three per centum of the price for which so sold; and

(f)Athletic articles, games, etc. Upon all tennis rackets, golf clubs, baseball bats, lacrosse sticks, balls of all kinds, including baseballs, foot balls, tennis, 317golf, lacrosse, billiard and pool balls, fishing rods and reels, billiardwar excise taxes. and pool tables, chess and checker boards and pieces, dice, games and parts of games, except playing cards and children’s toys andExceptions. games, sold by the manufacturer, producer, or importer, a tax equivalent to three per centum of the price for which so sold; and

(g)Upon all perfumes, essences, extracts, toilet waters, cosmetics,Toilet articles, etc. petroleum jellies, hair oils, pomades, hair dressings, hair restoratives, air dyes, tooth and mouth washes, dentifrices, tooth pastes, aromatic cachous, toilet soaps and powders, or any similar substance, article, or preparation by whatsoever name known or distinguished, upon all of the above which are used or applied or intended to be used or applied for toilet purposes, and which are sold by the manufacturer, importer, or producer, a tax equivalent to two per centum of the price for which so sold; and

(h)Upon all pills, tablets, powders, tinctures, troches or lozenges,Proprietary medicines, etc. sirups, medicinal cordials or bitters, anodynes, tonics, plasters, liniments, salves, ointments, pastes, drops, waters (except those taxed*Ante*, p. 312. under section throe hundred and thirteen of this Act), essences, spirits, oils, and all medicinal preparations, compounds, or compositions whatsoever, the manufacturer or producer of which claims to have any private formula, secret, or occult art for making or preparing the same, or has or claims to have any exclusive right or title to the making or preparing the same, or which are prepared, uttered, vended, or exposed for sale under any letters patent, or trade-mark, or which, if prepared by any formula, published or unpublished, are held out or recommended to the public by the makers, venders, or proprietors thereof as proprietary medicines or medicinal proprietary articles or preparations, or as remedies or specifics for any disease, diseases, or affection whatever affecting the human or animal body, and which are sold by the manufacturer, producer, or importer, a tax equivalent to two per centum of the price for which so sold; and

(i)Upon all chewing gum or substitute therefor sold by the manufacturer, Chewing gum.producer, or importer, a tax equivalent to two per centum of the price for which so sold; and

(j)Upon all cameras sold by the manufacturer, producer, or importer,Cameras. a tax equivalent to three per centum of the price for which so sold. Sec. 601. That each manufacturer, producer, or importer of anyMonthly returns and payments. of the articles enumerated in section six hundred shall make monthly returns under oath in duplicate and pay the taxes imposed on such articles by this title to the collector of internal revenue for the district in which is located the principal place of business. Such returns shall contain such information and be made at such times and in such manner as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulations prescribe. Sec. 602. That upon all articles enumerated in subdivisions (a),Floor stock held by dealer other than retailer, etc., subject to one-half of tax. (b), (e), (f), (g), (h), (i), or

(j)of section six hundred, which on the day this Act is passed are held and intended for sale by any person, corporation, partnership, or association, other than

(1)a retailer who is not also a wholesaler, or

(2)the manufacturer, producer, or importer thereof, there shall be levied, assessed, collected, and paid a tax equivalent to. one-half the tax imposed by each such subdivision upon the sale of the articles therein enumerated. This tax shall be paid by the person, corporation, partnership, or association so holding such articles. The taxes imposed by this section shall be assessed, collected, andAssessment, payment, etc. paid in the same manner as provided in section ten hundred and two in the case of additional taxes upon articles upon which the tax imposed by existing law has been paid. 318 war excise taxes.Nothing in this section shall be construed to impose a tax upon Exemption if no title passed.articles sold and delivered prior to May ninth, nineteen hundred and seventeen, where the title is reserved in the vendor as security for the payment of the purchase money. Sec. 603. Yachts, motor boats, etc. Annual excise tax on owners, etc. *Post*, p. 1129. That on the day this Act takes effect, and thereafter on July first in each year, and also at the time of the original purchase of a new boat by a user, if on any other date than July first, there shall be levied, assessed, collected, and paid, upon the use of yachts, pleasure boats, power boats, and sailing boats, of over five net tons, and motor boats with fixed engines, not used exclusively for trade or national defense, or not built according to plans and specifications approved by the Navy Department, an excise tax to be based on Rates.each yacht or boat, at rates as follows: Yachts, pleasure boats, power boats, motor boats with fixed engines, and sailing boats, of over five net tons, length not over fifty feet, 50 cents for each foot, length over fifty feet and not over one hundred feet, $1 for each foot, length over one hundred feet, $2 for each foot; motor boats of not over five net tons with fixed engines, $5. Measurement.In determining the length of such yachts, pleasure boats, power boats, motor boats with fixed engines, and sailing boats, the measurement of over-all length shall govern. Part of a year.In the case of a tax imposed at the time of the original purchase of a new boat on any other date than July first, the amount to be paid shall be the same number of twelfths of the amount of the tax as the number of calendar months, including the month of sale, remaining prior to the following July first. Title VII.—admissions and dues.War Tax on Admissions and Dues. Sec. 700. War tax on admissions. *Post*, p. 1120. That from and after the first day of November, nineteen hundred and seventeen, there shall be levied, assessed, collected, and paid

(a)a tax of 1 cent for each 10 cents or fraction thereof of the amount paid for admission to any place, including admission by season ticket or subscription, to be paid by the person paying for such *Provisos*. Children.admission: *Provided*, That the tax on admission of children under Free admissions.twelve years of age where an admission charge for such children is made shall in every case be 1 cent; and

(b)in the case of persons (except bona fide employees, municipal officers on official business, and children under twelve years of age) admitted free to any place at a time when and under circumstances under which an admission charge is made to other persons of the same class, a tax of 1 cent for each 10 cents or fraction thereof of the price so charged to such Cabarets, etc.other persons for the same or similar accommodations, to be paid by the person so admitted; and

(c)a tax of 1 cent for each 10 cents or fraction thereof paid for admission to any public performance for profit at any cabaret or other similar entertainment to which the charge for admission is wholly or in part included in the price paid for refreshment, service, or merchandise; the amount paid for such admission to be computed under rules prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, such tax to be paid by the person paying for such refreshment, Box holders, etc.service, or merchandise. In the case of persons having the permanent use of boxes or seats in an opera house or any place of amusement or a lease for the use of such box or seat in such opera house or place of amusement there shall be levied, assessed, collected, and paid a tax equivalent to ten per centum of the amount for which a similar box or seat is sold for performance or exhibition at which the box or seat Places exempt.is used or reserved by or for the lessee or holder. These taxes shall not be imposed in the case of a place the maximum charge for admission to which is 5 cents, or in the case of shows, rides, and other319amusements, (the maximum charge for admission to which is 10admissions and dues. cents) within outdoor general amusement parks, or in the case of admissions to such parks. No tax shall be levied under this title in respect to any admissionsReligious, educational, etc., entertainments not taxed. all the proceeds of which inure exclusively to the benefit of religious, educational, or charitable institutions, societies, or organizations, or admissions to agricultural fairs none of the profits of which are distributed to stockholders or members of the association conducting the same. The term “admission” as used in this title includes seats and tables,Charges included. reserved or otherwise, and other similar accommodations, and the charges made therefor. Sec. 701. That from and after the first day of November, nineteenClub dues, etc. *Post*, p. 1121. hundred and seventeen, there shall be levied, assessed, collected, and paid, a tax equivalent to ten per centum of any amount paid as dues or membership fees (including initiation fees), to any social, athletic, or sporting club or organization, where such dues or fees are in excess of $12 per year; such taxes to be paid by the person paying such dues or fees: *Provided*, That there shall be exempted from the provisions*Proviso*. Fraternal relief lodges, etc., exempt. of this section all amounts paid as dues or fees to a fraternal beneficiary society, order, or association, operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system, and providing for the payment of life, sick, accident, or other benefits to the members of such society, order, or association or their dependents. Sec. 702. That every person, corporation, partnership, or associationCollection by receivers.

(a)receiving any payments for such admission, dues, or fees, shall collect the amount of the tax imposed by section seven hundred or seven hundred and one from the person making such payments, or

(b)admitting any person free to any place for admission to which a charge is made shall collect the amount of the tax imposed by sectionReturns, payment, etc. seven hundred from the person so admitted, and

(c)in either case shall make returns and payments of the amount so collected, at the same time and in the same manner as provided in section five hundred*Ante*, p. 315. and three of this Act. Title VIII.—War Stamp Taxes.war stamp taxes. Sec. 800. That on and after the first day of December, nineteenLevied on designated bonds, stocks, documentary instruments. *Post*, p. 1133. hundred and seventeen, there shall be levied, collected, and paid, for and in respect of the several bonds, debentures, or certificates of stock and of indebtedness, and other documents, instruments, matters,*Post*, p. 321. and things mentioned and described in Schedule A of this title, or for or in respect of the vellum, parchment, or paper upon which such instruments, matters, or things, or any of them, are written or printed, by any person, corporation, partnership, or association who makes, signs, issues, sells, removes, consigns, or ships the same, or for whose use or benefit the same are made, signed, issued, sold, removed, consigned, or shipped, the several taxes specified in such schedule. Sec. 801. That there shall not be taxed under this title any bond,Bonds, etc., excepted. Federal, State, etc. note, or other instrument, issued by the United States, or by any foreign Government, or by any State, Territory, or the District of Columbia, or local subdivision thereof, or municipal or other corporation exercising the taxing power, when issued in the exercise of a strictly governmental, taxing, or municipal function; or stocks and bondsBuilding and loan associations. issued by cooperative building and loan associations which are organized and operated exclusively for the benefit of their members and make loans only to their shareholders, or by mutual ditch or irrigatingMutual ditch companies. companies. 320 Sec. 802. war stamp taxes. That whoever—

(a)Offenses designated. Using unstamped, etc., papers. Makes, signs, issues, or accepts, or causes to be made, signed, issued, or accepted, any instrument, document, or paper of any kind or description whatsoever without the full amount of tax thereon being duly paid;

(b)Shipping parcel post articles without stamps. Consigns or ships, or causes to be consigned or shipped, by parcel post any parcel, package, or article without the full amount of tax being duly paid;

(c)Selling unstamped articles. Manufactures or imports and sells, or offers for sale, or causes to be manufactured or imported and sold, or offered for sale, any playing cards, package, or other article without the full amount of tax being duly paid;

(d)Not canceling stamps. Makes use of any adhesive stamp to denote any tax imposed by this title without canceling or obliterating such stamp as prescribed in section eight hundred and four; Penalty.Is guilty of a misdemeanor and upon conviction thereof shall pay a fine of not more than $100 for each offense. Sec. 803. That whoever—

(a)Fraudulently removing, etc., stamps. Fraudulently cuts, tears, or removes from any vellum, parchment, paper, instrument, writing, package, or article, upon which any tax is imposed by this title, any adhesive stamp or the impression of any stamp, die, plate, or other article provided, made, or used in pursuance of this title;

(b)Reusing, etc., stamps. Fraudulently uses, joins, fixes, or places to, with, or upon any vellum, parchment, paper, instrument, writing, package, or article, upon which any tax is imposed by this title,

(1)any adhesive stamp, or the impression of any stamp, die, plate, or other article, which has been cut, torn, or removed from any other vellum, parchment, paper, Insufficient stamps.instrument, writing, package, or article, upon which any tax is imposed by this title; or

(2)any adhesive stamp or the impression of Counterfeits.any stamp, die, plate, or other article of insufficient value; or

(3)any forged or counterfeit stamp, or the impression of any forged or counterfeited stamp, die, plate, or other article;

(c)Removing stamps for illegal use. Willfully removes, or alters the cancellation, or defacing marks of, or otherwise prepares, any adhesive stamp, with intent to use, or cause the same to be used, after it has been already used, or knowingly or willfully buys, sells, offers for sale, or gives away, any such washed or restored stamp to any person for use, or knowingly uses the same;

(d)Possessing washed, etc., stamps. Knowingly and without lawful excuse (the burden of proof of such excuse being on the accused) has in possession any washed, restored, or altered stamp, which has been removed from any vellum, parchment, paper, instrument, writing, package, or article, is guilty of a Punishment.misdemeanor, and upon conviction shall be punished by a fine of not more than $1,000, or by imprisonment for not more than five Forfeiture of document, etc.years, or both, in the discretion of the court, and any such reused, canceled, or counterfeit stamp and the vellum, parchment, document, paper, package, or article upon which it is placed or impressed shall be forfeited to the United States. Sec. 804. Cancelation requirements. That whenever an adhesive stamp is used for denoting any tax imposed by this title, except as hereinafter provided, the person, corporation, partnership, or association, using or affixing the same shall write or stamp or cause to be written or stamped thereupon the initials of his or its name and the date upon which the same *Proviso*. Other methods allowed.is attached or used, so that the same may not again be used: *Provided*, That the Commissioner of Internal Revenue may prescribe such other method for the cancellation of such stamps as he may deem expedient. Sec. 805. Preparation, etc., of stamps.

(a)That the Commissioner of Internal Revenue shall cause to be prepared and distributed for the payment of the taxes prescribed in this title suitable stamps denoting the tax on the document, articles, or thing to which the same may be affixed, and shall 321prescribe such method for the affixing of said stamps in substitutionwar stamp taxes. or or in addition to the method provided in this title, as he may deem expedient.

(b)The Commissioner of Internal Revenue, with the approval ofOutside contracts for stamps allowed. the Secretary of the Treasury, is authorized to procure any of the stamps provided for in this title by contract whenever such stamps can not be speedily prepared by the Bureau of Engraving and Printing;Termination of authority. but this authority shall expire on the first day of January, nineteen hundred and eighteen, except as to imprinted stamps furnished under contract, authorized by the Commissioner of Internal Revenue.

(c)All internal-revenue laws relating to the assessment and collectionGeneral laws made applicable for mistakes, etc. of taxes are hereby extended to and made a part of this title, so far as applicable, for the purpose of collecting stamp taxes omitted through mistake or fraud from any instrument, document, paper, writing, parcel, package, or article named herein. Sec. 806. That the Commissioner of Internal Revenue shallDistribution through postmasters. furnish to the Postmaster General without prepayment a suitable quantity of adhesive stamps to be distributed to and kept on sale by the various postmasters in the United States. The PostmasterAccountability, etc. General may require each such postmaster to give additional or increased bond as postmaster for the value of the stamps so furnished, and each such postmaster shall deposit the receipts from the sale of such stamps to the credit of and render accounts to the Postmaster General at such times and in such form as he may by regulations prescribe. The Postmaster General shall at least once monthlyTransfers of collections to the Treasury. transfer all collections from this source to the Treasury as internal-revenue collections. Sec. 807. That the collectors of the several districts shall furnishDistribution through assistant treasurers and depositaries. without prepayment to any assistant treasurer or designated depositary of the United States located in their respective collection districtsBonds required. a suitable quantity of adhesive stamps for sale. In such cases the collector may require a bond, with sufficient sureties, to an amount equal to the value of the adhesive stamps so furnished, conditioned for the faithful return, whenever so required, of all quantities or amounts undisposed of, and for the payment monthly of all quantities or amounts sold or not remaining on hand. The Secretary ofRegulations authorized. the Treasury may from time to time make such regulations as he may find necessary to insure the safe-keeping or prevent the illegal use of all such adhesive stamps. schedule a.—stamp taxes.schedule a. 1. Bonds of indebtedness: Bonds, debentures, or certificates ofBonds of indebtedness. indebtedness issued on and after the first day of December, nineteen hundred and seventeen, by any person, corporation, partnership, or association, on each $100 of face value or fraction thereof, 5 cents:*Proviso*. Renewals. Basis of tax. *Provided*, That every renewal of the foregoing shall be taxed as a new issue: *Provided further*, That when a bond conditioned for the repayment or payment of money is given in a penal sum greater than the debt secured, the tax shall be based upon the amount secured. 2. Bonds, indemnity and surety: Bonds for indemnifying anyIndemnity and surety bonds. person, corporation, partnership, or corporation who shall have become bound or engaged as surety, and all bonds for the due execution or performance of any contract, obligation, or requirement, or the duties of any office or position, and to account for money received by virtue thereof, and all other bonds of any description, except such as may be required in legal proceedings, not otherwise provided for in this schedule, 50 cents: *Provided*, That where a*Provisos*. Rate of premium. premium is charged for the execution of such bond the tax shall be paid at the rate of one per centum on each dollar or fractional part 322war stamp taxes.thereof of the premium charged: *Provided further*, That policies of Reinsurance exempt.reinsurance shall be exempt from the tax imposed by this subdivision. 3. Capital stock. Original issues. Capital stock, issue: On each original issue, whether on organization or reorganization, of certificates of stock by any association, company, or corporation, on each $100 of face value or fraction *Provisos*. Without face value.thereof, 5 cents: *Provided*, That where capital stock is issued without face value, the tax shall be 5 cents per share, unless the actual value is in excess of $100 per share, in which case the tax shall be 5 cents on each $100 of actual value or fraction thereof. To be attached to stock books.The stamps representing the tax imposed by this subdivision shall be attached to the stock books and not to the certificates issued. 4. Sales or transfers. Capital stock, sales or transfers: On all sales, or agreements to sell, or memoranda of sales or deliveries of, or transfers of legal title to shares or certificates of stock in any association, company, or corporation, whether made upon or shown by the books of the association, company, or corporation, or by any assignment in blank, or by any delivery, or by any paper or agreement or memorandum or other evidence of transfer or sale, whether entitling the holder in any manner to the benefit of such stock or not, on each $100 of face value or fraction thereof, 2 cents, and where such shares of stock are without par value, the tax shall be 2 cents on the transfer or sale or agreement to sell on each share, unless the actual value thereof is in excess of $100 per share, in which case the tax shall be 2 cents *Provisos*. Collateral agreements not taxed.on each $100 of actual value or fraction thereof: *Provided*, That it is not intended by this title to impose a tax upon an agreement evidencing a deposit of stock certificates as collateral security for money loaned thereon, which stock certificates are not actually sold, Transfers through bankers, etc.nor upon such stock certificates so deposited: *Provided further*, That the tax shall not be imposed upon deliveries or transfers to a broker for sale, nor upon deliveries or transfers by a broker to a customer for whom and upon whose order he has purchased same, but such deliveries or transfers shall be accompanied by a certificate setting Affixing stamps in books.forth the facts: *Provided further*, That in case of sale where the On certificates.evidence of transfer is shown only by the books of the company the stamp shall be placed upon such books; and where the change of On bills of sale.ownership is by transfer of the certificate the stamp shall be placed upon the certificate; and in cases of an agreement to sell or where the transfer is by delivery of the certificate assigned in blank there shall be made and delivered by the seller to the buyer a bill or memorandum of such sale, to which the stamp shall be affixed; and every bill or memorandum of sale or agreement to sell before mentioned shall Punishment for sales, etc., without stamps.show the date thereof, the name of the seller, the amount of the sale, and the matter or thing to which it refers. Any person or persons liable to pay the tax as herein provided, or anyone who acts in the matter as agent or broker for such person or persons who shall make any such sale, or who shall in pursuance of any such sale deliver any stock or evidence of the sale of any stock or bill or memorandum thereof, as herein required, without having the proper stamps affixed thereto with intent to evade the foregoing provisions shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not exceeding $1,000, or be imprisoned not more than six months, or both, at the discretion of the court. 5. Sales of products at exchanges, etc., for future delivery. Produce, sales of, on exchange: Upon each sale, agreement of sale, or agreement to sell, including so-called transferred or scratch sales, any products or merchandise at any exchange, or board of trade, or other similar place, for future delivery, for each $100 in value of the merchandise covered by said sale or agreement of sale or agreement to sell, 2 cents, and for each additional $100 or fractional 323part thereof in excess of $100, 2 cents: *Provided*, That on every salewar stamp taxes. or agreement of sale or agreement to sell as aforesaid there shall be*Provisos*. Stamped bill of sale, etc., required. made and delivered by the seller to the buyer a bill, memorandum, agreement, or other evidence of such sale, agreement of sale, or agreement to sell, to which there shall be affixed a lawful stamp or stamps in value equal to the amount of the tax on such sale: *Provided further*,Clearing house transfers without tax. That sellers of commodities described herein, having paid the tax provided by this subdivision, may transfer such contracts to a clearing house corporation or association, and such transfer shall not be deemed to be a sale, or agreement of sale, or an agreement to sell within the provisions of this Act, provided that such transferConditions. shall not vest any beneficial interest in such clearing house association but shall be made for the sole purpose of enabling such clearing house association to adjust and balance the accounts of the members of said clearing house association on their several contracts. AndContents of bills of sale, etc. every such bill, memorandum, or other evidence of sale or agreement to sell shall show the date thereof, the name of the seller, the amount of the sale, and the matter or tiling to which it refers; and any personPunishment for failure to deliver stamped bill, etc. or persons liable to pay the tax as herein provided, or anyone who acts in the matter as agent or broker for such person or persons, who shall make any such sale or agreement of sale, or agreement to sell, or who shall, in pursuance of any such sale, agreement of sale, or agreement to sell, deliver any such products or merchandise without a bill, memorandum, or other evidence thereof as herein required, or who shall deliver such bill, memorandum, or other evidence of sale, or agreement to sell, without having the proper stamps affixed thereto, with intent to evade the foregoing provisions, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not exceeding $ 1,000, or be imprisoned not more than six months, or both, at the discretion of the court. That no bill, memorandum, agreement, or other evidence of suchCash sales for immediate delivery not taxed. sale, or agreement of sale, or agreement to sell, in case of cash sales of products or merchandise for immediate or prompt delivery which in good faith are actually intended to be delivered shall be subject to this tax. 6. Drafts or checks payable otherwise than at sight or on demand,Drafts, promissory notes, etc. promissory notes, except bank notes issued for circulation, and for each renewal of the same, for a sum not exceeding $100, 2 cents; and for each additional $100 or fractional part thereof, 2 cents. 7. Conveyance: Deed, instrument, or writing, whereby any lands,Real estate conveyances, etc. tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his, her, or their direction, when the consideration or value of the interest or property conveyed, exclusive of the value of any lien or encumbrance remaining thereon at the time of sale, exceeds $100 and does not exceed $500, 50 cents; and for each additional $500 or fractional part thereof 50 cents: *Provided*, That nothing contained in this paragraph shall be so construed*Proviso*. Trust deeds, etc., exempt. as to impose a tax upon any instrument or writing given to secure a debt. 8. Entry of any goods, wares, or merchandise at any custom-house,Customhouse entries. either for consumption or warehousing, not exceeding $100 in value, 25 cents; exceeding $100 and not exceeding $500 in value, 50 cents; exceeding $500 in value, $1. 9. Entry for the withdrawal of any goods or merchandise fromWarehouse withdrawals. customs bonded warehouse, 50 cents. 10. Passage ticket, one way or round trip, for each passenger, soldForeign passage tickets. or issued in the United States for passage by any vessel to a port or place not in the United States, Canada, or Mexico, if costing not exceeding $30, $1; costing more than $30 and not exceeding $60, $3; 324war stamp taxes.costing more than $60, $5: *Provided*, That such passage tickets, *Proviso*. Exemption.costing $10 or less, shall be exempt from taxation. 11. Proxies. Proxy for voting at any election for officers, or meeting for the transaction of business, of any incorporated company or association, Exceptions.except religious, educational, charitable, fraternal, or literary societies, or public cemeteries, 10 cents. 12. Powers of attorney. Power of attorney granting authority to do or perform some act for or in behalf of the grantor, which authority is not *Proviso*. Pensions, etc., exempt.otherwise vested in the grantee, 25 cents: *Provided*, That no stamps shall be required upon any papers necessary to be used for the collection of claims from the United States or from any State for pensions, back pay, bounty, or for property lost in the military or naval service or upon powers of attorney required in bankruptcy cases. 13. Playing cards. Additional. Vol. 28, p. 560. Playing cards: Upon every pack of playing cards containing not more than fifty-four cards, manufactured or imported, and sold, or removed for consumption or sale, after the passage of this Act, a tax of 5 cents per pack in addition to the tax imposed under existing law. 14. Parcel-post packages. Parcel-post packages: Upon every parcel or package transported from one point in the United States to another by parcel post on which the postage amounts to 25 cents or more, a tax of 1 cent for each 25 cents or fractional part thereof charged for such transportation, to be paid by the consignor. Transporting without stamps forbidden.No such parcel or package shall be transported until a stamp or stamps representing the tax due shall have been affixed thereto. Title IX.—war estate tax.War Estate Tax. Sec. 900. Additional levy. Vol. 39, pp. 777, 1002, amended. That in addition to the tax imposed by section two hundred and one of the Act entitled “An Act to increase the revenue, and for other purposes,” approved September eighth, nineteen hundred and sixteen, as amended—

(a)Tax on transfers of estates of deceased persons hereafter. Vol. 39, p. 777. *Post*, p. 1096. A tax equal to the following percentages of its value is hereby imposed upon the transfer of each net estate of every decedent dying after the passage of this Act, the transfer of which is taxable under such section (the value of such net estate to be determined as provided in Title II of such Act of September eighth, nineteen hundred and sixteen): Rates.One-half of one per centum of the amount of such net estate not in excess of $50,000; One per centum of the amount by which such net estate exceeds $50,000 and does not exceed $150,000; One and one-half per centum of the amount by which such net estate exceeds $150,000 and does not exceed $250,000; Two per centum of the amount by which such net estate exceeds $250,000 and does not exceed $450,000; Two and one-half per centum of the amount by which such net estate exceeds $450,000 and does not exceed $1,000,000; Three per centum of the amount by which such net estate exceeds $1,000,000 and does not exceed $2,000,000; Three and one-half per centum of the amount by which such net estate exceeds $2,000,000 and does not exceed $3,000,000; Four per centum of the amount by which such net estate exceeds $3,000,000 and does not exceed $4,000,000; Four and one-half per centum of the amount by which such net estate exceeds $4,000,000 and does not exceed $5,000,000; Five per centum of the amount by which such net estate exceeds $5,000,000 and does not exceed $8,000,000; Seven per centum of the amount by which such net estate exceeds $8,000,000 and does not exceed $10,000,000; and325 Ten per centum of the amount by which such net estate exceedswar estate tax. $10,000,000. Sec. 901. That the tax imposed by this title shall not apply to theNot applicable if person died while in military or naval service during the war, etc. transfer of the net estate of any decedent dying while serving in the military or naval forces of the United States, during the continuance of the war in which the United States is now engaged, or if death results from injuries received or disease contracted in such service, within one year after the termination of such war. For the purposes of this section the termination of the war shall be evidenced by the proclamation of the President. Title X.—Administrative Provisions.administrative provisions. Sec. 1000. That there shall be levied, collected, and paid in theArticles from Virgin Islands to pay domestic internal revenue tax. *Post*, p. 1150. United States, upon articles coming into the United States from the West Indian Islands acquired from Denmark, a tax equal to the internal-revenue tax imposed in the United States upon like articlesExempt from island tax. of domestic manufacture; such articles shipped from said islands to the United States shall be exempt from the payment of any tax imposed by the internal-revenue laws of said islands: *Provided*, That*Proviso*. Articles from United States to pay island tax. there shall be levied, collected, and paid in said islands, upon articles imported from the United States, a tax equal to the internal-revenue tax imposed in said islands upon like articles there manufactured; and such articles going into said islands from the United States shallExempt from United States tax. be exempt from payment of any tax imposed by the internal-revenue laws of the United States. Sec. 1001. That all administrative, special, or stamp provisions ofGeneral revenue laws applicable to this Act. law, including the law relating to the assessment of taxes, so far as applicable, are hereby extended to and made a part of this Act, andRecords, returns, etc., required. every person, corporation, partnership, or association liable to any tax imposed by this Act, or for the collection thereof, shall keep such records and render, under oath, such statements and returns, and shall comply with such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may from time to time prescribe. Sec. 1002. That where additional taxes are imposed by this ActReturns of taxable articles subject to additional rates. upon articles or commodities, upon which the tax imposed by existing law has been paid, the person, corporation, partnership, or association required by this Act to pay the tax shall, within thirty days after its passage, make return under oath in such form and under such regulations as the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury shall prescribe. PaymentExtension of payment allowed. of the tax shown to be due may be extended to a date not exceeding seven months from the passage of this Act, upon the filing of a bond for payment in such form and amount and with such sureties as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. Sec. 1003. That in all cases where the method of collecting theOther methods of collection authorized. tax imposed by this Act is not specifically provided, the tax shall be collected in such manner as the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury may prescribe. All administrative and penalty provisions of Title VIII of this Act,Stamp tax penalties, etc. *Ante*, p. 320. in so far as applicable, shall apply to the collection of any tax which the Commissioner of Internal Revenue determines or prescribes shall be paid by stamp. Sec. 1004. That whoever fails to make any return required by thisPunishment for violating requirements of Act. Act or the regulations made under authority thereof within the time prescribed or who makes any false or fraudulent return, and whoever evades or attempts to evade any tax imposed by this Act or fails to collect or truly to account for and pay over any such tax, shall be subject to a penalty of not more than $1 ,000, or to imprisonment forAdditional penalty. not more than one year, or both, at the discretion of the court, and in addition thereto a penalty of double the tax evaded, or not col326administrative provisions.lected, or accounted for and paid over, to be assessed and collected in the same manner as taxes are assessed and collected, in any case in which the punishment is not otherwise specifically provided. Sec. 1005. Enforcement. That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, is hereby authorized to make all needful rules and regulations for the enforcement of the provisions of this Act. Sec. 1006. Temporary use of existing stamps for new rates. That where the rate of tax imposed by this Act, payable by stamps, is an increase over previously existing rates, stamps on hand in the collectors’ offices and in the Bureau of Internal Revenue may continue to be used until the supply on hand is exhausted, but shall be sold and accounted for at the rates provided by this Act, Payment for stamps on hand.and assessment shall be made against manufacturers and other taxpayers having such stamps on hand on the day this Act takes effect for the difference between the amount paid for such stamps and the tax due at the rates provided by this Act. Sec. 1007. Payment of tax on articles under contracts prior to May 9, 1917, by vendee. That

(a)if any person, corporation, partnership, or association has prior to May ninth, nineteen hundred and seventeen, made a bona fide contract with a dealer for the sale, after the tax takes effect, of any article (or, in the case of moving picture films, such a contract with a dealer, exchange, or exhibitor, for the sale or lease thereof) upon which a tax is imposed under Title III, IV, or VI, or under subdivision thirteen of Schedule A of Title VIII, or under this section, and

(b)if such contract does not permit the adding of the whole of such tax to the amount to be paid under such contract, then the vendee or lessee shall, in lieu of the vendor or lessor, pay so much of such tax as is not so permitted to be added to the contract price. Time of payment. *Ante*, p. 315.The taxes payable by the vendee or lessee under this section shall be paid to the vendor or lessor at the time the sale or lease is consummated, and collected, returned, and paid to the United States by such vendor or lessor in the same manner as provided in section five hundred and three. “Dealer”construed.The term “dealer” as used in this section includes a vendee who purchases any article with intent to use it in the manufacture or production of another article intended for sale. Sec. 1008. Fractions of a cent. That in the payment of any tax under this Act not payable by stamp a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent. Sec. 1009. Advance payments of estimated tax in installments. That the Secretary of the Treasury, under rules and regulations prescribed by him, shall permit taxpayers liable to income and excess profits taxes to make payments m advance in installments or in whole of an amount not in excess of the estimated taxes which will be due from them, and upon determination of the Refund of excess.taxes actually due any amount paid in excess shall be refunded as *Provisos*. Allotment of payments.taxes erroneously collected: *Provided*, That when payment is made in installments at least one-fourth of such estimated tax shall be paid before the expiration of thirty days after the close of the taxable year, at least an additional one-fourth within two months after the close of the taxable year, at least an additional one-fourth within four months after the close of the taxable year, and the remainder of the tax due on or before the time now fixed by law for such Credit for advanced payments.payment: *Provided further*, That the Secretary of the Treasury, under rules and regulations prescribed by him, may allow credit against such taxes so paid in advance of an amount not exceeding three per centum per annum calculated upon the amount so paid from the date of such payment to the date now fixed by law for such pay ment; but no such credit shall be allowed on payments in excess of taxes determined to be due, nor on payments made after the expira 327tion of four and one-half months after the close of the taxable year.administrative provisions. All penalties provided by existing law for failure to pay tax when duePenalties for nonpayment. are hereby made applicable to any failure to pay the tax at the time or times required in this section. Sec. 1010. That under rules and regulations prescribed by theCertificates of indebtedness receivable for income and excess profits taxes. *Ante*, pp. 36, 290. Secretary of the Treasury, collectors of internal revenue may receive, at par and accrued interest, certificates of indebtedness issued under section six of the Act entitled “An Act to authorize an issue of bonds to meet expenditures for the national security and defense, and, for the purpose of assisting in the’ prosecution of the war, to extend credit to foreign governments, and for other purposes,” approved April twenty-fourth, nineteen hundred and seventeen, and any subsequent Act or Acts, and uncertified checks in payment of incomeAlso uncertified checks. and excess-profits taxes, during such time and under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe; but if a check so receivedLiability if unpaid. is not paid by the bank on which it is drawn the person by whom such check has been tendered shall remain hable for the payment of the tax and for all legal penalties and additions the same as if such check had not been tendered. Title XI.—Postal Rates.postal rates. Sec. 1100. That the rate of postage on all mail matter of the firstIncrease rate on first class matter. *Post*, p. 1150. class, except postal cards, shall thirty days after the passage of this Act be, in addition to the existing rate, 1 cent for each ounce or fraction thereof: *Provided*, That the rate of postage on drop letters of the*Proviso*. Drop letters at present. Postal cards, etc., increased. first class shall be 2 cents an ounce or fraction thereof. Postal cards, and private mailing or post cards when complying with the requirements of existing law, shall be transmitted through the mails at 1 cent each in addition to the existing rate. That letters written and mailed by soldiers, sailors, and marines Letters from armed forces abroad free.assigned to duty in a foreign country engaged in the present war may be mailed free of postage, subject to such rules and regulations as may be prescribed by the Postmaster General. Sec. 1101. That on and after July first, nineteen hundred andSecond class matter. eighteen, the rates of postage on publications entered as second-classRates payable by publisher or agent. matter (including sample copies to the extent of ten per centum of the weight of copies mailed to subscribers during the calendar year) when sent by the publisher thereof from the post office of publication or other post office, or when sent by a news agent to actual subscribers thereto, or to other news agents for the purpose of sale:

(a)In the case of the portion of such publication devoted to matterOn portion not advertisements. Flat rates. other than advertisements, shall be as follows:

(1)On and after July first, nineteen hundred and eighteen, and until July first, nineteen hundred and nineteen, 1¼ cents per pound or fraction thereof;

(2)on and after July first, nineteen hundred and nineteen, 1½ cents per pound or fraction thereof.

(b)In the case of the portion of such publication devoted to advertisementsAdvertisement portion. Zone rates applicable. the rates per pound or fraction thereof for delivery within the several zones applicable to fourth-class matter shall be as follows (but where the space devoted to advertisements does not exceed five per centum of the total space, the rate of postage shall be the same as if the whole of such publication was devoted to matter other than advertisements):

(1)On and after July first, nineteen hundredFrom July 1, 1918, to July 1, 1919. and eighteen, and until July first, nineteen hundred and nineteen, for the first and second zones, 1¼ cents; for the third zone, 1½ cents; for the fourth zone, 2 cents; for the fifth zone, 2¼ cents; for the sixth zone, 2½ cents; for the seventh zone, 3 cents; for the eighth zone, 3¼ cents;

(2)on and after July first, nineteen hundred and nineteen,From July 1, 1919, to July 1, 1920. and until July first, nineteen hundred and twenty, for the first and 328postal rates.second zones, 1½ cents; for the third zone, 2 cents; for the fourth zone, 3 cents; for the fifth zone 3½ cents; for the sixth zone, 4 cents; From July 1, 1920, to July 1, 1921.for the seventh zone, 5 cents; for the eighth zone, 5½ cents;

(3)on and after July first, nineteen hundred and twenty, and until July first, nineteen hundred and twenty-one, for the first and second zones, 1¾ cents; for the third zone, 2½ cents; for the fourth zone, 4 cents; for the fifth zone, 4¾ cents; for the sixth zone, 5½ cents; for the seventh zone, 7 cents; for the eighth zone, 7¾ cents;

(4)on and After July 1, 1921.after July first, nineteen hundred and twenty-one, for the first and second zones, 2 cents; for the third zone, 3 cents; for the fourth zone, 5 cents; for the fifth zone, 6 cents; for the sixth zone, 7 cents; for the seventh zone, 9 cents; for the eighth zone, 10 cents;

(c)Statements for determining rates to be filed. With the first mailing of each issue of each such publication, the publisher shall file with the postmaster a copy of such issue, together with a statement containing such information as the Post master General may prescribe for determining the postage chargeable thereon. Sec. 1102. Daily newspapers. Present rate when deposited at carrier office for delivery. That the rate of postage on daily newspapers, when the same are deposited in a letter-carrier office for delivery by its carriers, shall be the same as now provided by law; and nothing in this title shall affect existing law as to free circulation and existing rates on second-class mail matter within the comity of publication: *Proviso*. Separation for zone mailing.*Provided*, That the Postmaster General may hereafter require publishers to separate or make up to zones in such a manner as he may direct all mail matter of the second class when offered for mailing. Sec. 1103. Religious, educational, etc., publications. Flat rates established for. That in the case of newspapers and periodicals entitled to be entered as second-class matter and maintained by and in the interest of religious, educational, scientific, philanthropic, agricultural, labor, or fraternal organizations or associations, not organized for profit and none of the net income of which inures to the benefit of any private stockholder or individual, the second-class postage rates shall be, irrespective of the zone in which delivered (except when the same are deposited in a letter carrier office for delivery by its carriers, in which case the rates shall be the same as now provided After July 1, 1918.by law), 1⅛ cents a pound or fraction thereof on and after July first, nineteen hundred and eighteen, and until July first, nineteen hundred and nineteen, and on and after July first, nineteen hundred and Evidence required to secure rates.nineteen, 1¼ cents a pound or fraction thereof. The publishers of such newspapers or periodicals before being entitled to the foregoing rates shall furnish to the Postmaster General, at such times and under such conditions as he may prescribe, satisfactory evidence that none of the net income of such organization inures to the benefit of any private stockholder or individual. Sec. 1104. Rates for small issues. That where the total weight of any one edition or issue of any publication mailed to any one zone does not exceed one pound, the rate of postage shall be 1 cent. Sec. 1105. Rates on entire bulk mailed. The zone rates provided by this title shall relate to the entire bulk mailed to any one zone and not to individually addressed packages. Sec. 1106. Present rates if not sent by publisher, etc. That where a newspaper or periodical is mailed by other than the publisher or his agent or a news agent or dealer, the rate shall be the same as now provided by law. Sec. 1107. Monthly payment of increased first-class receipts into general fund. *Post*, p. 1150. That the Postmaster General, on or before the tenth day of each month, shall pay into the general fund of the Treasury an amount equal to the difference between the estimated amount received during the preceding month for the transportation of first class matter through the mails and the estimated amount which would have been received under the provisions of the law in force at the time of the passage of this Act. Sec. 1108. No salary increase of postmasters during the war. That the salaries of postmasters at offices of the first, second, and third classes shall not be increased after July first, 329nineteen hundred and seventeen, during the existence of the presentpostal rates. war. The compensation of postmasters at offices of the fourth classPay for fourth class offices. shall continue to be computed on the basis of the present rates of postage. Sec. 1109. That where postmasters at offices of the third classAdditional clerk hire at third class offices if postmaster in military service. have been since May first, nineteen hundred and seventeen, or hereafter are granted leave without pay for military purposes, the Postmaster General may allow, in addition to the maximum amounts which may now be allowed such offices for clerk hire, in accordance with law, an amount not to exceed fifty per centum of the salary of the postmaster. Sec. 1110. That section five of the Act approved March third,Intoxicating liquors by mail, etc. Vol. 39, p. 1069. Ethyl alcohol for Government use, etc., not prohibited. nineteen hundred and seventeen, entitled “An Act making appropriations for the Post Office Department for the year ending June thirtieth, nineteen hundred and eighteen,” shall not be construed to apply to ethyl alcohol for governmental, scientific, medicinal, mechanical, manufacturing, and industrial purposes, and the Postmaster General shall prescribe suitable rules and regulations to carry into effect this section in connection with the Act of which it is amendatory, nor shall said section be held to prohibit the use of the mails by regularly ordained ministers of religion, or by officers of regularly established churches, for ordering wines for sacramental uses, or by manufacturersWines for sacramental use, allowed. and dealers for quoting and billing such wines for such purposes only. Title XII.—Income Tax Amendments.income tax amendments. Sec. 1200. That subdivision

(a)of section two of such Act of September eighth,Vol. 39, p. 757, amended. *Post*, p. 1150. nineteen hundred and sixteen, is hereby amended to read as follows: " “(a) That, subject only to such exemptions and deductions as areNet income defined. hereinafter allowed, the net income of a taxable person shall include gains, profits, and income, derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, or from professions, vocations, businesses, trade, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in real or personal property, also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever.” " Section four of such Act of September eighth, nineteen hundredVol. 39, p. 758, amended. and sixteen, is hereby amended to read as follows: " “Sec. 4. The following income shall be exempt from the provisionsExemptions. of this title: “The proceeds of life insurance policies paid to individual beneficiariesLife insurance policies. upon the death of the insured; the amount received by the insured, as a return of premium or premiums paid by him under life insurance, endowment, or annuity contracts, either during the term or at the maturity of the term mentioned in the contract or upon surrender of the contract; the value of property acquired by gift,Gifts, etc. bequest, devise, or descent (but the income from such property shall be included as income); interest upon the obligations of a State orInterest on State, Federal, etc., obligations. Exception. any political subdivision thereof or upon the obligations of the United States (but, in the case of obligations of the United States issued after September first, nineteen hundred and seventeen, only if and to the extent provided in the Act authorizing the issue thereof) or its possessions or securities issued under the provisions of theVol. 39, p. 360. Federal Farm Loan Act of July seventeenth, nineteen hundred and sixteen; the compensation of the present President of the UnitedPresident during present term. Judges, State officials, etc. States during the term for which he has been elected and the judges of the supreme and inferior courts of the United States now in office, 330income tax amendments. Exception.and the compensation of all officers and employees of a State, or any political subdivision thereof, except when such compensation is paid y the United States Government.” " Sec. 1201. Deductions allowed citizens or residents. Vol, 39, p. 759, amended.

(1)That paragraphs second and third of subdivision

(a)of section five of such Act of September eighth, nineteen hundred and sixteen, are hereby amended to read as follows: " “Second. Interest paid on debts. Exception. All interest paid within the year on his indebtedness except on indebtedness incurred for the purchase of obligations or securities the interest upon which is exempt from taxation as income under this title; “Third. General taxes. Income and excess profits excepted. Taxes paid within the year imposed by the authority of the United States (except income and excess profits taxes) or of its Territories, or possessions, or any foreign country, or by the authority of any State, county, school district, or municipality, or other taxing subdivision of any State, not including those assessed against local benefits;” "

(2)Vol. 39, p. 759, amended. That section five of such Act of September eighth, nineteen hundred and sixteen, is hereby amended by adding at the end of subdivision

(a)a further paragraph, numbered nine, to read as follows: " “Ninth. Contributions to religious, charitable, etc., associations. Contributions or gifts actually made within the year to corporations or associations organized and operated exclusively for religious, charitable, scientific, or educational purposes, or to societies for the prevention of cruelty to children or animals, no part of the Limit.net income of which inures to the benefit of any private stockholder or individual, to an amount not in excess of fifteen per centum of the taxpayer’s taxable net income as computed without the benefit of Restriction.this paragraph. Such contributions or gifts shall be allowable as deductions only if verified under rules and regulations prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury.” " Sec. 1202. Deductions allowed nonresident aliens. Vol. 39, p. 760, amended. That

(1)paragraphs second and third of subdivision

(a)of section six of such Act of September eighth, nineteen hundred and sixteen, are hereby amended to read as follows: " “Second. Share of interest paid on debts. Exception. The proportion of all interest paid within the year by such person on his indebtedness (except on indebtedness incurred for the purchase of obligations or securities the interest upon which is exempt from taxation as income under this title) which the gross amount of his income for the year derived from sources within the United States bears to the gross amount of his income for the year Condition. Vol.39, p. 761. *Post*, p. 331.derived from all sources within and without the United States, but this deduction shall be allowed only if such person includes in the return required by section eight all the information necessary for its calculation; “Third. General taxes in United States. Income and excess profits excepted. Taxes paid within the year imposed by the authority of the United States (except income and excess profits taxes), or of its Territories, or possessions, or by the authority of any State, county, school district, or municipality, or other taxing subdivision of any State, paid within the United States, not including those assessed against local benefits;” "

(2)New provision. Vol. 39, p. 761, amended. Section six of such Act of September eighth, nineteen hundred and sixteen, is also further amended by adding a new subdivision to read as follows: " “(c) Complete returns of total United States income required. A nonresident alien individual shall receive the benefit of the deductions and credits provided for in this section only by filing or causing to be filed with the collector of internal revenue a true and accurate return of his total income, received from all sources, corporate or otherwise, in the United States, in the manner prescribed by this title; and in case of his failure to file such return the collector Tax, etc., in case of failure.shall collect the tax on such income, and all property belonging to such nonresident alien individual shall be liable to distraint for the tax.” " 331 Sec. 1203.

(1)That section seven of such Act of September eighth,income tax amendments. Personal exemptions. Vol. 39, p. 761, amended. Deductions for normal tax of $3,000 for citizens or residents. *Ante*, p. 301. nineteen hundred and sixteen, is hereby amended to read as follows: " “Sec. 7. That for the purpose of the normal tax only, there shall be allowed as an exemption in the nature of a deduction from the amount of the net income of each citizen or resident of the United States, ascertained as provided herein, the sum of $3,000, plus $1,000 additional if the person making the return be a head of a family or aAdditional $1,000 if head of family. married man with a wife living with him, or plus the sum of $1,000 additional if the person making the return be a married woman with a husband living with her; but in no event shall this additional exemption of $1,000 be deducted by both a husband and a wife: *Provided*, That only one deduction of $4,000 shall be made from the*Provisos*. Limitation. aggregate income of both husband and wife when living together: *Provided further*, That if the person making the return is the head of aAllowance for minor or dependent children. family there shall be an additional exemption of $200 for each child dependent upon such person, if under eighteen years of age, or if incapable of self-support because mentally or physically defective, but this provision, shall operate only in the case of one parent in the same family: *Provided further*, That guardians or trustees shall beGuardians or trustees. allowed to make this personal exemption as to income derived from the property of which such guardian or trustee has charge in favor of each ward or cestui que trust: *Provided further*, That in no eventRestriction. shall a ward or cestui que trust be allowed a greater personal exemption than as provided in this section, from the amount of net income received from all sources. There shall also be allowed an exemptionEstates during administration. from the amount of the net income of estates of deceased citizens or residents of the United States during the period of administration or settlement, and of trust or other estates of citizens or residentsTrust estates. Vol. 39, pp. 756, 759. of the United States the income of which is not distributed annually or regularly under the provisions of subdivision

(b)of section two, the sum of $3,000, including such deductions as are allowed under section five.” "

(2)Subdivision

(b)of section seven of such Act of SeptemberAllowance to nonresident alien repealed. Vol 39, p. 761, repealed. Returns to be made. Vol. 39, p. 762, amended. eighth, nineteen hundred and sixteen, is hereby repealed. Sec. 1204.

(1)That subdivisions

(c)and

(e)of section eight of such Act of September eighth, nineteen hundred and sixteen, are hereby amended to read as follows: " “(c) Guardians, trustees, executors, administrators, receivers, conservators,Guardians and other fiduciaries. and all persons, corporations, or associations, acting in any fiduciary capacity, shall make and render a return of the income of the person, trust, or estate for whom or which they act, and be subject to all the provisions of this title which apply to individuals. Such fiduciary shall make oath that he has sufficient knowledge ofAffidavits required. the affairs of such person, trust, or estate to enable him to make such return and that the same is, to the best of his knowledge and belief, true and correct, and be subject to all the provisions of this title which apply to individuals: *Provided*, That a return made by one of*Provisos*. Joint fiduciaries. two or more joint fiduciaries filed in the district where such fiduciary resides, under such regulations as the Secretary of the Treasury may prescribe, shall be a sufficient compliance with the requirements of this paragraph: *Provided further*, That no return of income not exceedingIncomes not over $3,000 excepted. $3,000 shall be required except as in this title otherwise provided. “(e) Persons carrying on business in partnership shall be liable forPartnerships. Individual liability only. income tax only in their individual capacity, and the share of the profits of the partnership to which any taxable partner would be entitled if the same were divided, whether divided or otherwise, shall be returned for taxation and the tax paid under the provisions of this title: *Provided*, That from the net distributive interests on which*Provisos*. Deductions allowed members. the individual members shall be liable for tax, normal and additional, there shall be excluded their proportionate shares received from 332income tax amendments.interest on the obligations of a State or any political or taxing subdivision thereof, and upon the obligations of the United States (if and to the extent that it is provided in the Act authorizing the issue of such obligations of the United States that they are exempt from taxation), Credits for tax-paid dividends, etc. Vol. 39, p. 759.and its possessions, and that for the purpose of computing the normal tax there shall be allowed a credit, as provided by section five, subdivision (b), for their proportionate share of the profits derived from Returns required.dividends. Such partnership, when requested by the Commissioner of Internal Revenue or any district collector, shall render a correct Exception. Vol. 39, p. 758. *Ante*, p. 302.return of the earnings, profits, and income of the partnership, except income exempt under section four of this Act, setting forth the item of the gross income and the deductions and credits allowed by this title, and the names and addresses of the individuals who would be Fiscal year returns.entitled to the net earnings, profits, and income, if distributed. A partnership shall have the same privilege of fixing and making returns upon the basis of its own fiscal year as is accorded to corporations Tax at rate for year in which earned.under this title. If a fiscal year ends during nineteen hundred and sixteen or a subsequent calendar year for which there is a rate of tax different from the rate for the preceding calendar year, then

(1)the rate for such preceding calendar year shall apply to an amount of each partner’s share of such partnership profits equal to the proportion which the part of such fiscal year falling within such calendar year bears to the full fiscal year, and

(2)the rate for the calendar year during which such fiscal year ends shall apply to the remainder. "

(2)Deduction of tax by corporations, repealed. Vol. 39, p. 762, repealed. Subdivision

(d)of section eight of such Act of September eighth, nineteen hundred and sixteen, is hereby repealed. Sec. 1205. Assessment and administration.

(1)That subdivisions (b), (c), (f), and

(g)of section nine of such Act of September eighth, nineteen hundred and sixteen, are hereby amended to read as follows: " “(b) Withholding normal tax on nonresidents at source of income. Vol. 39, p. 763, amended. All persons, corporations, partnerships, associations, and insurance companies, in whatever capacity acting, including lessees or mortgagors of real or personal property, trustees acting in any trust capacity, executors, administrators, receivers, conservators, employers, and all officers and employees of the United States, having the control, receipt, custody, disposal, or payment of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable annual or periodical Tax-paid dividends excepted.gains, profits, and income of any nonresident alien individual, other than income derived from dividends on capital stock, or from the net earnings of a corporation, joint-stock company or association, or insurance company, which is taxable upon its net income as provided in this title, are hereby authorized and required to deduct and withhold from such annual or periodical gains, profits, and income such sum as will be sufficient to pay the normal tax imposed thereon by this title, and shall make return thereof on or before March first of each year and, on or before the time fixed by law for the payment of the tax, shall pay the amount withheld to the officer of the United Indemnity for paying at source.States Government authorized to receive the same: and they are each hereby made personally liable for such tax, and they are each hereby indemnified against every person, corporation, partnership, association, or insurance company, or demand whatsoever for all payments which they shall make in pursuance and by virtue of this title. “(c) Tax to be withheld from interest on bonds, etc. The amount of the normal tax hereinbefore imposed shall also be deducted and withheld from fixed or determinable annual or periodical gains, profits and income derived from interest upon bonds and mortgages, or deeds of trust or other similar obligations of corporations, joint-stock companies, associations, and insurance Conditions.companies, (if such bonds, mortgages, or other obligations contain a contract or provision by which the, obligor agrees to pay any portion 333of the tax imposed by this title upon the obligee or to reimburse theincome tax amendments. obligee for any portion of the tax or to pay the interest without deduction for any tax which the obligor may be required or permitted to pay thereon or to retain therefrom under any law of the United States) whether payable annually or at shorter or longer periods and whether such interest is payable to a non-resident alien individual or to an individual citizen or resident of the United States, subject to the provisions of the foregoing subdivision

(b)of this section requiring the tax to be withheld at the source and deducted from annual income and returned and paid to the Government, unless theUnless exemption notice filed. *Ante*, p. 331. person entitled to receive such interest shall file with the withholding agent, on or before February first, a signed notice in writing claiming the benefit of an exemption under section seven of this Title. “(f) All persons, corporations, partnerships, or associations, undertakingLicenses for collecting foreign coupons, etc. Vol. 39, p. 765, amended. as a matter of business or for profit the collection of foreign payments of interest or dividends by means of coupons, checks, or bills of exchange shall obtain a license from the Commissioner of Internal Revenue, and shall be subject to such regulations enabling the Government to obtain the information required under this title, as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe; and whoever knowinglyPunishment for collecting without license, etc. undertakes to collect such payments as aforesaid without having obtained a license therefor, or without complying with such regulations, shall be deemed guilty of a misdemeanor and for each offense be fined in a sum not exceeding $5,000, or imprisoned for a term not exceeding one year, or both, in the discretion of the court. “(g) The tax herein imposed upon gains, profits, and incomes notPersonal returns of other incomes. Vol. 39, p. 765. falling under the foregoing and not returned and paid by virtue of the foregoing or as otherwise provided by law shall be assessed by personal return under rules and regulations to be prescribed by the Commissioner of Internal Revenue and approved by the Secretary of the Treasury. The intent and purpose of this title is that all No taxable liability of owner released.gains, profits, and income of a taxable class, as defined by this title, shall be charged and assessed with the corresponding tax, normal and additional, prescribed by this title, and said tax shall be paid by the owner of such income, or the proper representative having the receipt, custody, control, or disposal of the same. For the purposeOwnership determined. of this title ownership or liability shall be determined as of the year for which a return is required to be rendered. “The provisions of this section, except subdivision (c), relating toRestriction on deducting tax at source. the deduction and payment of the tax at the source of income shall only apply to the normal tax hereinbefore imposed upon nonresident alien individuals.” "

(2)Subdivisions

(d)and

(e)of section nine of such Act of SeptemberOther provisions repealed. Vol. 39, pp. 764, 765. eighth, nineteen hundred and sixteen, are hereby repealed. Sec. 1206.

(1)That the first paragraph of section ten of such ActCorporations. Vol, 39, p. 765, amended. of September eighth, nineteen hundred and sixteen, is hereby amended to read as follows: " “Sec. 10.

(a)That there shall be levied, assessed, collected, andNormal tax on net incomes. Domestic. paid annually upon the total net income received in the preceding calendar year from all sources by every corporation, joint-stock company or association, or insurance company, organized in the United States, no matter how created or organized, but not including partnerships, a tax of two per centum upon such income; andForeign, from United States sources. a like tax shall be levied, assessed, collected, and paid annually upon the total net income received in the preceding calendar year from all sources within the United States by every corporation, joint-stock company or association, or insurance company, organized, authorized, or existing under the laws of any foreign country, including interest on bonds, notes, or other interest-bearing obligations of 334income tax amendments.residents, corporate or otherwise, and including the income derived from dividends on capital stock or from net earnings of resident corporations, joint-stock companies or associations, or insurance companies, whose net income is taxable under this title.” "

(2)New provision. Vol. 39, p. 766, amended. Section ten of such Act of September eighth, nineteen hundred and sixteen, is hereby further amended by adding a new subdivision as follows: " “(b) Additional tax on undistributed net earnings. In addition to the income tax imposed by subdivision

(a)of this section there shall be levied, assessed, collected, and paid annually an additional tax of ten per centum upon the amount, remaining undistributed six months after the end of each calendar or fiscal year, of the total net income of every corporation, joint-stock company or association, or insurance company, received during the year, as determined for the purposes of the tax imposed by such Income taxes not included.subdivision (a), but not including the amount of any income taxes paid by it within the year imposed by the authority of the United States. Not applicable for portion retained for business use.“The tax imposed by this subdivision shall not apply to that portion of such undistributed net income which is actually invested and employed in the business or is retained for employment in the reasonable requirements of the business or is invested in obligations of the United States issued after September first, nineteen hundred and *Proviso*. Surtax if not so employed.seventeen: *Provided*, That if the Secretary of the Treasury ascertains and finds that any portion of such amount so retained at any time for employment in the business is not so employed or is not reasonably required in the business a tax of fifteen per centum shall be levied, assessed, collected, and paid thereon. Applicable to each taxable year.“The foregoing tax rates shall apply to the undistributed net income received by every taxable corporation, joint-stock company or association, or insurance company in the calendar year nineteen hundred and seventeen and in each year thereafter, except that if it has fixed its own fiscal year under the provisions of existing law, the foregoing rates shall apply to the proportion of the taxable undistributed net income returned for the fiscal year ending prior to December thirty-first, nineteen hundred and seventeen, which the period between January first, nineteen hundred and seventeen, and the end of such fiscal year bears to the whole of such fiscal year.” " Sec. 1207. Deductions. Allowed domestic corporations. Vol. 39, p. 768, amended.

(1)That paragraphs third and fourth of subdivision

(a)of section twelve of such Act of September eighth, nineteen hundred and sixteen, are hereby amended to read as follows: " “Third. Interest paid on indebtedness. Exceptions and limitations. The amount of interest paid within the year on its indebtedness (except on indebtedness incurred for the purchase of obligations or securities the interest upon which is exempt from taxation as income under this title) to an amount of such indebtedness not in excess of the sum of

(a)the entire amount of the paid-up capital stock outstanding at the close of the year, or, if no capital stock, the entire amount of capital employed in the business at the close of the year, and

(b)one-half of its interest-bearing indebtedness then *Provisos*. Preferred, stock not included.outstanding: *Provided*, That for the purpose of this title preferred capital stock shall not be considered interest-bearing indebtedness, and interest or dividends paid upon this stock shall not be deductible from Shares without nominal value.gross income: *Provided further*, That in cases wherein shares of capital stock are issued without par or nominal value, the amount of paid-up capital stock, within the meaning of this section, as represented by such shares, will be the amount of cash, or its equivalent, paid or transferred to the corporation as a consideration for such shares: Secured by collateral.*Provided further*, That in the case of indebtedness wholly secured by property collateral, tangible or intangible, the subject of sale or hy ecation in the ordinary business of such corporation, joint-stock company or association as a dealer only in the property constituting such collateral, or in loaning the funds thereby procured, the total 335interest paid by such corporation, company, or association within theincome tax amendments. year on any such indebtedness may be deducted as a part of its expenses of doing business, but interest on such indebtedness shall onlyLimitation. be deductible on an amount of such indebtedness not in excess of the actual value of such property collateral: *Provided further*, That inNo allowance for bonds guaranteed free from tax. the case of bonds or other indebtedness, which have been issued with a guaranty that the interest payable thereon shall be free from taxation, no deduction for the payment of the tax herein imposed, or any other tax paid pursuant to such guaranty, shall be allowed; and inInterest on bank deposits allowed. the case of a bank, banking association, loan or trust company, interest paid within the year on deposits or on moneys received for investment and secured by interest-bearing certificates of indebtedness issued by such bank, banking association, loan or trust company shall be deducted; “Fourth. Taxes paid within the year imposed by the authorityGeneral taxes. Income and excess profits excepted. of the United States (except income and excess profits taxes), or of its Territories, or possessions, or any foreign country, or by the authority of any State, county, school district, or municipality, or other taxing subdivision of any State, not including those assessed against local benefits.” "

(2)Paragraphs third and fourth of subdivision

(b)of sectionForeign corporations. Vol. 39, p. 769 amended. Deductions from in come in United States. twelve of such Act of September eighth, nineteen hundred and sixteen, are hereby amended to read as follows: " “Third. The amount of interest paid within the year on its indebtednessInterest paid on indebtedness. Exceptions and limitations. (except on indebtedness incurred for the purchase of obligations or securities the interest upon which is exempt from taxation as income under this title) to an amount of such indebtedness not in excess of the proportion of the sum of

(a)the entire amount of the paid-up capital stock outstanding at the close of the year, or, if no capital stock, the entire amount of the capital employed in the business at the close of the year, and

(b)one-half of its interest-bearing indebtedness then outstanding, which the gross amount of its income for the year from business transacted and capital invested within the United States bears to the gross amount of its income derived from all sources within and without the United States: *Provided*,*Proviso*. No allowance for bonds guaranteed free from tax. That in the case of bonds or other indebtedness which have been issued with a guaranty that the interest payable thereon shall be free from taxation, no deduction for the payment of the tax herein imposed or any other tax paid pursuant to such guaranty shall be allowed; and in case of a bank, banking association, loan or trustInterest on bank deposits allowed. company, or branch thereof, interest paid within the year on deposits by or on moneys received for investment from either citizens or residents of the United States and secured by interest-bearing certificates of indebtedness issued by such bank, banking association, loan or trust company, or branch thereof; “Fourth. Taxes paid within the year imposed by the authority ofGeneral taxes in United States. Income and excess profits excepted. the United States (except income and excess profits taxes), or of its Territories, or possessions, or by the authority of any State, county, school district, or municipality, or other taxing subdivision of any State, paid within the United States, not including those assessed against local benefits.” " Sec. 1208. That subdivision

(e)of section thirteen of such Act ofReturns. Vol. 39, p. 771, amended. September eighth, nineteen hundred and sixteen, is hereby amended to read as follows: " “(e) All the provisions of this title relating to the tax authorizedForeign corporations. Provisions for nonresident aliens applicable to tax-paid dividends. and required to be deducted and withheld and paid to the officer of the United States Government authorized to receive the same from the income of nonresident alien individuals from sources within the United States shall be made applicable to the tax imposed by subdivision

(a)of section ten upon incomes derived from interest upon 336income tax amendments.bonds and mortgages or deeds of trust or similar obligations of domestic or other resident corporations, joint-stock companies or associations, and insurance companies by nonresident alien firms, copartnerships, companies, corporations, joint-stock companies or associations, and insurance companies, not engaged in business or trade within the United States and not having any office or place of business therein.” " Sec. 1209. Penalty provisions. Vol. 39, p. 775, amended. That section eighteen of such Act of September eighth, nineteen hundred and sixteen, is hereby amended to read as follows: " “Sec. 18. Penalty for not making returns, etc. Application extended. That any person, corporation, partnership, association, or insurance company, liable to pay the tax, to make a return or to supply information required under this title, who refuses or neglects to pay such tax, to make such return or to supply such information at the time or times herein specified in each year, shall be liable, Punishment for false returns, etc.except as otherwise specially provided in this title, to a penalty of not less than $20 nor more than $1,000. Any individual or any officer of any corporation, partnership, association, or insurance company, required by law to make, render, sign, or verify any return or to supply any information, who makes any false or fraudulent return or statement with intent to defeat or evade the assessment required by this title to be made, shall be guilty of a misdemeanor, and shall be fined not exceeding $2,000 or be imprisoned not exceeding one year, or both, in the discretion of the court, with the costs of *Proviso*. Tax duly paid not to be withheld at source.prosecution: *Provided*, That where any tax heretofore due and payable has been duly paid by the taxpayer, it shall not be re-collected from any withholding agent required to retain it at its source, nor shall any Penalty restricted to fraudulent evasions.penalty be imposed or collected in such cases from the taxpayer, or such withholding agent whose duty it was to retain it, for failure to return or pay the same, unless such failure was fraudulent and for the purpose of evading payment.” " Sec. 1210. Corporation returns. Vol. 39, pp. 777, 1004, amended. That section twenty-six of such Act of September eighth, nineteen hundred and sixteen, as amended by the Act entitled “An Act to provide increased revenue to defray the expenses of the increased appropriations for the Army and Navy and the extensions of fortifications, and for other purposes,” approved March third, nineteen hundred and seventeen, is hereby amended to read as follows: " “Sec. 26. Sworn returns to be made of all dividend payments. Every corporation, joint-stock company or association, or insurance company subject to the tax herein imposed, when required by the Commissioner of Internal Revenue, shall render a correct return, duly verified under oath, of its payments of dividends, whether made in cash or its equivalent or in stock, including the Names, etc., of stockholders included.names and addresses of stockholders and the number of shares owned by each, and the tax years and the applicable amounts in which such dividends were earned, in such form and manner as may be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury.” " Sec. 1211. Administrative provisions. Vol. 39, p. 777, amended. New sections. Exchange brokers to make returns of all dealings and customers. That Title I of such Act of September eighth, nineteen hundred and sixteen, is hereby amended by adding to Part III six new sections, as follows: " “Sec. 27. That every person, corporation, partnership, or association, doing business as a broker on any exchange or board of trade or other similar place of business shall, when required by the Commissioner of Internal Revenue, render a correct return duly verified under oath, under such rules and regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe, showing the names of customers for whom such person, corporation, partnership, or association has transacted any Details of profits and losses.business, with such details as to the profits, losses, or other information which the commissioner may require, as to each of such cus337tomers, as will enable the Commissioner of Internal Revenue to determine income tax amendments.whether all income tax due on profits or gains of such customers has been paid. “Sec. 28. That all persons, corporations, partnerships, associations,Persons paying fixed incomes to others of $800 and over to make returns thereof. and insurance companies, in whatever capacity acting, including lessees or mortgagors of real or personal property, trustees acting in any trust capacity, executors, administrators, receivers, conservators, and employers, making payment to another person, corporation, partnership, association, or insurance company, of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable gains, profits, and income (other than payments described in sections twenty-six andExceptions. twenty-seven), of $800 or more in any taxable year, or, in the caseReturns from United States officials. of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for, are hereby authorized and required to render a true and accurate return to the Commissioner of Internal Revenue, under such rules and regulations and in such form and maimer as may be prescribed by him, with the approval of the Secretary ofDetails. the Treasury, setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment: *Provided*, That such returns shall be required, regardless of amounts,*Proviso*. All payments of interest on bonds, etc., required. Collection of foreign bonds, dividends, etc. in the case of payments of interest upon bonds and mortgages or deeds of trust or other similar obligations of corporations, joint-stock companies, associations, and insurance companies, and in the case of collections of items (not payable in the United States) of interest upon the bonds of foreign countries and interest from the bonds and dividends from the stock of foreign corporations by persons, corporations, partnerships, or associations, undertaking as a matter of business or for profit the collection of foreign payments of such interest or dividends by means of coupons, checks, or bills of exchange. “When necessary to make effective the provisions of this sectionName and address. the name and address of the recipient of income shall be furnished upon demand of the person, corporation, partnership, association, or insurance company paying the income. “The provisions of this section shall apply to the calendar yearApplicable each year. nineteen hundred and seventeen and each calendar year thereafter,Exception. but shall not apply to the payment of interest on obligations of the United States. “Sec. 29. That in assessing income tax the net income embracedExcess profits tax to be credited in income returns. in the return shall also be credited with the amount of any excess profits tax imposed by Act of Congress and assessed for the same calendar or fiscal year upon the taxpayer, and, in the case of a member of a partnership, with his proportionate share of such excess profits tax imposed upon the partnership. “Sec. 30. That nothing in section II of the Act approved OctoberInvestment of foreign governments in United States not taxed. Vol. 38, p. 166. *Ante*, p. 300. third, nineteen hundred and thirteen, entitled ‘An Act to reduce tariff duties and to provide revenue for the Government, and for other purposes,’ or in this title, shall be construed as taxing the income of foreign governments received from investments in the United States in stocks, bonds, or other domestic securities, owned by such foreign governments, or from interest on deposits in banks in the United States of moneys belonging to foreign governments. “Sec. 31.

(a)That the term ‘dividends’ as used in this title shallAll dividends accruing since March 1, 1913, included in income. be held to mean any distribution made or ordered to be made by a corporation, joint-stock company, association, or insurance company, out of its earnings or profits accrued since March first, nineteen 338income tax amendments.hundred and thirteen, and payable to its shareholders, whether in cash or in stock of the corporation, joint-stock company, association, or insurance company, which stock dividend shall be considered income, to the amount of the earnings or profits so distributed. “(b) Distributions taxed at rate for year earned, etc. Any distribution made to the shareholders or members of a corporation, joint-stock company, or association, or insurance company, in the year nineteen hundred and seventeen, or subsequent tax years, shall be deemed to have been made from the most recently accumulated undivided profits or surplus, and shall constitute a part of the annual income of the distributee for the year in which received, and shall be taxed to the distributee at the rates prescribed by law for the years in which such profits or surplus were accumulated by the corporation, joint-stock company, association, or insurance Earnings prior to March 1, 1913, not taxed.company, but nothing herein shall be construed as taxing any earnings or profits accrued prior to March first, nineteen hundred and thirteen, but such earnings or profits may be distributed in stock dividends or otherwise, exempt from the tax, after the distribution of earnings and profits accrued since March first, nineteen hundred and thirteen, Limitation.has been made. This subdivision shall not apply to any distribution made prior to August sixth, nineteen hundred and seventeen, out of earnings or profits accrued prior to March first, nineteen hundred and thirteen. “Sec. 32. Life insurance by corporations, etc., of employees not deducted from income. That premiums paid on life insurance policies covering the lives of officers, employees, or those financially interested in any trade or business conducted by an individual, partnership, corporation, joint-stock company or association, or insurance company, shall not be deducted in computing the not income of such individual, corporation, joint-stock company or association, or insurance company, or in computing the profits of such partnership for the purposes of subdivision

(e)of section nine.” " Sec. 1212. Tax of citizens withheld at source for 1917, released. Vol. 39, p. 762. That any amount heretofore withheld by any withholding agent as required by Title I of such Act of September eighth, nineteen hundred and sixteen, on account of the tax imposed upon the income of any individual, a citizen or resident of the United States, for the calendar year nineteen hundred and seventeen, except *Ante*, p. 332.in the cases covered by subdivision

(c)of section nine of such Act, as amended by this Act, shall be released and paid over to such Collection from individuals.individual, and the entire tax upon the income of such individual for such year shall be assessed and collected in the manner prescribed by such Act as amended by this Act. Title XIII.—general provisions.General Provisions. Sec. 1300. Invalidity of any clause, etc., not to affect remainder of Act. That if any clause, sentence, paragraph, or part of this Act shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of said Act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in winch such judgment shall have been rendered. Sec. 1301. Special preparedness fund repealed. Vol. 39, p. 1000, repealed. That Title I of the Act entitled “An Act to provide increased revenue to defray the expenses of the increased appropriations for the Army and Navy and the extension of fortifications, and for other purposes,” approved March third, nineteen hundred and seventeen, be, and the same is hereby, repealed. Sec. 1302. In effect day after passage. That unless otherwise herein specially provided, this Act shall take effect on the day following its passage. Approved, October 3, 1917.