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Code · STATUTES-AT-LARGE · Vol. 53 STAT. · June 30, 1940 · Public Law 155

Public Law 155.

17,830 words·~81 min read·/statutes-at-large/vol-53/public-law-155·

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

(/us/pl/76/154)] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*, War Department Civil Appropriation Act, 1940. That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending June 30, 1940, for civil functions administered by the War Department, and for other purposes, namely: 53 Stat. 857 QUARTERMASTER CORPS cemeterial expenses For maintaining and improving national cemeteries, including fuel Maintenance, improvement, etc.Vehicles.Arlington National Cemetery, Va.Plot in Congressional Cemetery, D.
C.Roadways; limitation.Headstones.[17 Stat. 545](/us/stat/17/545); [20 Stat. 281](/us/stat/20/281); [34 Stat. 56](/us/stat/34/56); [38 Stat. 768](/us/stat/38/768); [45 Stat. 1307](/us/stat/45/1307).[24 U. S. C. §§ 279, 280, 280a](/us/usc/t24/s279/280/280a).Recovery of bodies, etc.[45 Stat. 251](/us/stat/45/251).[10 U. S. C. § 916; Supp. IV, § 916](/us/usc/t10/s916).Monuments, etc., in Cuba and China.Confederate cemeteries, etc.[52 Stat. 667](/us/stat/52/667).*Provisos*.Encroachments forbidden.Roadway repairs, restriction. for and pay of superintendents and the superintendent at Mexico City, and other employees; purchase of land; purchase of tools and materials; purchase and exchange of two passenger-carrying motor vehicles; repair, maintenance, and operation of passenger-carrying motor vehicles; care and maintenance of the Arlington Memorial Amphitheater, chapel, and grounds in the Arlington National Cemetery, and that portion of Congressional Cemetery to which the United States has title and the graves of those buried therein, including Confederate graves, and including the burial site of Pushmataha, a Choctaw Indian chief; repair to roadways but not to more than a single approach road to any national cemetery constructed under special Act of Congress; headstones for unmarked graves of soldiers, sailors, and marines under the Acts approved March 3, 1873 (24 U. S. C. 279), February 3, 1879 (24 U. S. C. 280), March 9, 1906 (34 Stat. 56), March 14, 1914 (38 Stat. 768), and February 26, 1929 (24 U. S. C. 280a), and civilians interred in post cemeteries; recovery of bodies and disposition of remains of military personnel and civilian employees of the Army under Act approved March 9, 1928 (10 U. S. C. 916); travel allowances of attendants accompanying remains of military personnel and civilian employees; for repairs and preservation of monuments, tablets, roads, fences, and so forth, made and constructed by the United States in Cuba and China to mark the places where American soldiers fell; care, protection, and maintenance of the Confederate Mound in Oakwood Cemetery at Chicago, the Confederate Stockade Cemetery at Johnstons Island, the Confederate burial plats owned by the United States in Confederate Cemetery at North Alton, the Confederate Cemetery, Camp Chase, at Columbus, the Confederate Cemetery at Point Lookout, and the Confederate Cemetery at Rock Island; and for care and maintenance of graves used by the Army for burials in commercial cemeteries, $1,449,960, and in addition, $136,254 of the appropriation, “Cemeterial Expenses, War Department, 1939”, such amount of such appropriation being hereby reappropriated: *Provided*, That no railroad shall be permitted upon any right-of-way which may have been acquired by the United States leading to a national cemetery, or to encroach upon any roads or walks constructed thereon and maintained by the United States: *Provided further*, That no part of this appropriation shall be used for repairing any roadway not owned by the United States within the corporate limits of any city, town, or village.
The Secretary of War is authorized to convey to any State, county, Conveyance to State, etc., of U. S. interest in any approach road to national cemetery.*Provisos*.Conditions.Transfer of jurisdiction. municipality, or proper agency thereof, in which the same is located, all the right, title, and interest of the United States in and to any Government owned or controlled approach road to any national cemetery: *Provided*, That prior to the delivery of any instrument of conveyance hereunder, the State, county, municipality, or agency to which the conveyance herein authorized is to be made, shall notify the Secretary of War in writing of its willingness to accept and maintain the road included in such conveyance: *Provided further*, That upon the execution and delivery of any conveyance herein authorized, the jurisdiction of the United States of America over the road conveyed, shall cease and determine and shall thereafter vest in the State in which said road is located. 53 Stat. 858 SIGNAL CORPS alaska communication system Operation, improvement, etc.*Proviso*.Report to Congress.
For operation, maintenance, and improvement of the Alaska Communication System, including travel allowances and travel in kind as authorized by law, and operation and maintenance of passenger-carrying vehicles, $200,000, to be derived from the receipts-of the Alaska Communication System which have been covered into the Treasury of the United States, and to remain available until the close of the fiscal year 1941: *Provided*, That the Secretary of War shall report to Congress the extent and cost of any extensions and betterments which may be effected under this appropriation.
BUREAU OF INSULAR AFFAIRS United States High Commissioner to the Philippine Islands United States High Commissioner’s office.[48 Stat. 461](/us/stat/48/461).[48 U. S. C. § 1237 (4)](/us/usc/t48/s1237/4).Salaries and expenses.Traveling expenses, etc.Vehicles.Household expenses.*Provisos*.Legal adviser and financial expert.Minor purchases.[R. S. § 3709](/us/bill/76/rs/3709).[41 U. S. C. § 5](/us/usc/t41/s5). For the maintenance of the office of the United States High Commissioner to the Philippine Islands as authorized by subsection 4 of section 7 of the Act approved March 24, 1934 (48 Stat. 456), including salaries and wages; rental, furnishings, equipment, maintenance, renovation, and repair of office quarters and living quarters for the High Commissioner; supplies and equipment; purchase and exchange of lawbooks and books of reference, periodicals, and newspapers; traveling expenses, including for persons appointed hereunder within the United States and their families, actual expenses of travel and transportation of household effects from their homes in the United States to the Philippine Islands, and return, utilizing Government vessels whenever practicable; operation, maintenance, and repair of motor vehicles, and all other necessary expenses, $163,130, of which amount not exceeding $10,000 shall be available for expenditure in the discretion of the High Commissioner for maintenance of his household and such other purposes as he may deem proper: *Provided*, That the salary of the legal adviser and the financial expert shall not exceed the annual rate of $10,000 and $9,000 each, respectively: *Provided further*, That section 3709 of the Revised Statutes (41 U. S. C. 5), shall not apply to any purchase or service rendered under this appropriation when the aggregate amount involved does not exceed the sum of $100.
CORPS OF ENGINEERS Availability. To be immediately available and to be expended under the direction of the Secretary of War and the supervision of the Chief of Engineers, and to remain available until expended: rivers and harbors Maintenance of existing works.Survey of boundary, etc., waters.New York harbor.California Débris Commission.[27 Stat. 507](/us/stat/27/507).[33 U. S. C. §§ 661, 678, 683; Supp. IV, § 683](/us/usc/t33/s661/678/683).Removal of navigation obstructions. For the preservation and maintenance of existing river and harbor works, and for the prosecution of such projects heretofore authorized as may be most desirable in the interests of commerce and navigation; for survey of northern and northwestern lakes and other boundary and connecting waters as heretofore authorized, including the preparation, correction, printing, and issuing of charts and bulletins and the investigation of lake levels; for prevention of obstructive and injurious deposits within the harbor and adjacent waters of New York City; for expenses of the California Debris Commission in carrying on the work authorized by the Act approved March 1, 1893, as amended (33 U. S. C. 661, 678, and 683); for removing sunken vessels or craft obstructing or endangering navigation as authorized by law; for operating and maintaining, keeping in repair, and continuing in use without interruption any lock, canal (except the Panama Canal), 53 Stat. 859 canalized river, or other public works for the use and benefit of navigation belonging to the United States, including maintenance of the Hennepin Canal in Illinois; for payment annually of tuition fees of Student officers at civil technical institutions.[41 Stat. 785](/us/stat/41/785).[10 U. S. C. § 535](/us/usc/t10/s535).Surveys, etc.Printing and binding.Vehicles, etc.*Provisos*.Unauthorized surveys, etc., forbidden.Maintenance of harbor channels outside harbor lines.Power-driven boats, restriction on use.Permanent International Commission of the Congresses of Navigation. not to exceed fifty student officers of the Corps of Engineers at civil technical institutions under the provisions of section 127a of the National Defense Act, as amended (10 U. S. C. 535); for examinations, surveys, and contingencies of rivers and harbors; for printing and binding, newspapers, lawbooks, books of reference, periodicals, and office supplies and equipment required in the Office of the Chief of Engineers to carry out the purposes of this appropriation, including such printing as may be authorized by the Committee on Printing of the House of Representatives, either during a recess or session of Congress, of surveys authorized by law, and such surveys as may be printed during a recess of Congress shall be printed, with illustrations, as documents of the next succeeding session of Congress, and for the purchase (not to exceed $220,708) of motor-propelled passenger-carrying vehicles and motorboats, for official use: *Provided*, That no part of this appropriation shall be expended for any preliminary examination, survey, project, or estimate not authorized by law, $96,000,000: *Provided*, That from this appropriation the Secretary of War may, in his discretion and on the recommendation of the Chief of Engineers based on the recommendation by the Board of Rivers and Harbors in the review of a report or reports authorized by law, expend such sums as may be necessary for the maintenance of harbor channels provided by a State, municipality, or other public agency, outside of harbor lines and serving essential needs of general commerce and navigation, such work to be subject to the conditions recommended by the Chief of Engineers in his report or reports thereon: *Provided further*, That no appropriation under the Corps of Engineers for the fiscal year 1940 shall be available for any expenses incident to operating any power-driven boat or vessel on other than Government business: *Provided further*, That not to exceed $3,000 of the amount herein appropriated shall be available for the support and maintenance of the Permanent International Commission of the Congresses of Navigation and for the payment of the actual expenses of the properly accredited delegates of the United States to the meeting of the congresses and of the commission. flood control Flood control, general:
For the construction and maintenance of Public works on rivers and harbors.*Post*, p. 1328.[49 Stat. 1570](/us/stat/49/1570).[33 U. S. C., Supp. IV, ch. 15](/us/usc/t33/15).Printing and binding.Vehicles.Preliminary examinations, etc.*Provisos*.Run-off and waterflow, retardation, etc., surveys.Personal services.Salmon River, Alaska. certain public works on rivers and harbors for flood control, and for other purposes, in accordance with the provisions of the Flood Control Act, approved June 22, 1936, as amended and supplemented, including printing and binding, newspapers, law books, books of reference, periodicals, and office supplies and equipment required in the Office of the Chief of Engineers to carry out the purposes of this appropriation, the purchase (not to exceed $149,500) of motor-propelled passenger-carrying vehicles and motorboats for official use, and for preliminary examinations and surveys of flood-control projects authorized by law, $133,000,000: *Provided*, That $3,000,000 of this appropriation shall be transferred and made available to the Secretary of Agriculture for preliminary examinations and surveys, as authorized by law, for run-off and water-flow retardation and soil-erosion prevention on the watersheds of flood-control projects, including the employment of persons in the District of Columbia and elsewhere, purchase of books and periodicals, printing and binding, rent in the District of Columbia, the purchase (not to exceed $75,000) of motor-propelled passenger-carrying vehicles and motorboats, and for other necessary expenses: *Provided further*, That funds appropriated herein may be used for flood control work on the Salmon River, 53 Stat. 860 Use of funds for designated surveys, etc.[52 Stat. 1216](/us/stat/52/1216).[33 U.
S. C., Supp. IV, § 701f (note)](/us/usc/t33/s701f).Expenditure not to be construed as commitment to construction of any project.Memphis, Tenn., project modified.[50 Stat. 881](/us/stat/50/881).Bayou Bodeau and Cypress Bayou, La., reservoir, etc., construction.[52 Stat. 1220](/us/stat/52/1220). Alaska, as authorized by law: *Provided further*, That funds appropriated herein may be used to execute detailed surveys, prepare plans and specifications, and to procure options on land and property necessary for the construction of authorized flood-control projects or for flood-control projects considered for selection in accordance with the provisions of section 4 of the Flood Control Act approved June 28, 1938: *Provided further*, That the expenditure of funds for completing the necessary surveys and securing options shall not be construed as a commitment of the Government to the construction of any project: *Provided further*, That the conditions of local cooperation for the Memphis, Tennessee, flood-control project, authorized by the Flood Control Act approved August 28, 1937, shall be so modified (without increasing the total estimated construction cost of the project) that the cost of providing pumping stations and outlet works for interior drainage shall be borne by the United States, all in accordance with plans to be approved by the Chief of Engineers: *And provided further*, That the reservoir and other flood-control works on Bayou Bodeau and Cypress Bayou, Louisiana, authorized by the Flood Control Act approved June 28, 1938, shall be constructed in accordance with the revised plans and cost estimates now in the Office, Chief of Engineers.
Mississippi River and tributaries.[45 Stat. 534](/us/stat/45/534); [49 Stat. 1508](/us/stat/49/1508).[33 U. S. C. § 702a; Supp. IV, § 702a–l](/us/usc/t33/s702a/702a–l). Flood control, Mississippi River and tributaries: For prosecuting work of flood control in accordance with the provisions of the Flood Control Act approved May 15, 1928, as amended (33 U. S. C. 702a), including printing and binding, newspapers, law books, books of reference, periodicals, and office supplies and equipment required in the office of the Chief of Engineers to carry out the purposes of this appropriation, and for the purchase (not to exceed $51,400) of motor-propelled passenger-carrying vehicles and motorboats for official use, $39,000,000.
Emergency fund, tributaries of Mississippi River.[49 Stat. 1511](/us/stat/49/1511).[33 U. S. C., Supp. IV, 702g–l](/us/usc/t33/s702g–l). Emergency fund for flood control on tributaries of Mississippi River: For rescue work and for repair or maintenance of any flood-control work on any tributaries of the Mississippi River threatened or destroyed by flood, in accordance with section 9 of the Flood Control Act, approved June 15, 1936 (49 Stat. 1508), $800,000. hydroelectric power Fort Peck Dam, Mont.[52 Stat. 403](/us/stat/52/403).
Power plant, Fort Peck Dam, Montana: For continuing the construction of the hydroelectric power plant at Fort Peck Dam, Montana, as authorized by the Act approved May 18, 1938 (52 Stat. 403), $2,000,000. Bonneville Dam, Oreg.[49 Stat. 1038](/us/stat/49/1038); [50 Stat. 731](/us/stat/50/731).[16 U. S. C., Supp. IV, ch. 12B](/us/usc/t16/12B). Power plant, Bonneville Dam, Columbia River, Oregon: For continuing the construction of the hydroelectric power plant at Bonneville Dam, Columbia River, Oregon, as authorized by the Acts approved August 30, 1935 (49 Stat. 1038), and August 20, 1937 (50 Stat. 731), $7,000,000.
UNITED STATES SOLDIERS’ HOME Maintenance, etc. For maintenance and operation of the United States Soldiers’ Home, to be paid from the Soldiers’ Home Permanent Fund, $800,500. THE PANAMA CANAL All expenses.Objects specified.Printing and binding. For every expenditure requisite for and incident to the maintenance and operation, sanitation, and civil government of the Panama Canal and Canal Zone, including the following: Compensation of all officials and employees; foreign and domestic newspapers and periodicals; law books not exceeding $1,000; textbooks and books of reference; printing and binding, including printing of annual report; rent and personal services in the District of Columbia; purchase or 53 Stat. 861 exchange of typewriting, adding, and other machines; purchase or exchange, maintenance, repair, and operation of motor-propelled Vehicles.Damage claims.Emergencies.Public funds and securities, transportation and insurance. and horse-drawn passenger-carrying vehicles; claims for damages to vessels passing through the locks of the Panama Canal, as authorized by the Panama Canal Act; claims for losses of or damages to property arising from the conduct of authorized business operations; claims for damages to property arising from the maintenance and operation, sanitation, and civil government of the Panama Canal; acquisition of land and land under water, as authorized in the Panama Canal Act; expenses incurred in assembling, assorting, storing, repairing, and selling material, machinery, and equipment heretofore or hereafter purchased or acquired for the construction of the Panama Canal which are unserviceable or no longer needed, to be reimbursed from the proceeds of such sale; expenses incident to conducting hearings and examining estimates for appropriations on the Isthmus; expenses incident to any emergency arising because of calamity by flood, fire, pestilence, or like character not foreseen or otherwise provided for herein; traveling expenses, when prescribed by the Governor of the Panama Canal to persons engaged in field work or traveling on official business; not to exceed $2,000 for travel and subsistence expenses of members of the police and fire forces of the Panama Canal incident to their special training in the United States; transportation, including insurance, of public funds and securities between the United States and the Canal Zone; purchase, construction, repair, replacement, alteration, or enlargement of buildings, structures, equipment, and other improvements; and for such other expenses not in the United States as the Governor of the Panama Canal may deem necessary best to promote the maintenance and operation, sanitation, and civil government of the Panama Canal, all to be expended under the direction of the Governor of the Panama Canal and accounted for as follows:
For maintenance and operation of the Panama Canal: Salary of Maintenance and operation.Governor’s salary.Supplies, equipment, etc.Payment to alien cripples.[39 Stat. 750](/us/stat/39/750).[5 U. S. C. § 793](/us/usc/t5/s793).Relief payments.[50 Stat. 478](/us/stat/50/478).[48 U. S. C., Supp. IV, § 1372](/us/usc/t48/s1372).Contracts authorized. the Governor, $10,000; contingencies of the Governor, to be expended in his discretion, not exceeding $3,000; purchase, inspection, delivery, handling, and storing of materials, supplies, and equipment for issue to all departments of the Panama Canal, the Panama Railroad, other branches of the United States Government, and for authorized sales; payment in lump sums of not exceeding the amounts authorized by the Injury Compensation Act approved September 7, 1916 (5 U. S. C. 793), to alien cripples who are now a charge upon the Panama Canal by reason of injuries sustained while employed in the construction of the Panama Canal; and relief payments authorized by the Act approved July 8, 1937 (50 Stat. 478); in all, $22,632,087 together with all moneys arising from the conduct of business operations authorized by the Panama Canal Act.
Of such sum of $22,632,087, $14,200,000 shall be immediately available; and in addition the Governor of the Panama Canal, when authorized by the Secretary of War, may enter into contracts prior to July 1, 1940, for the same objects embraced by such appropriation to an amount not in excess of $2,300,000, and his action in so doing shall be deemed a contractual obligation of the Federal Government for the payment of the cost thereof. For sanitation, quarantine, hospitals, and medical aid and support Sanitation, etc.Support of insane and lepers, etc.Deportation expenses.Chief quarantine officer. of the insane and of lepers and aid and support of indigent persons legally within the Canal Zone, including expenses of their deportation when practicable, the purchase of artificial limbs or other appliances for persons who were injured in the service of the Isthmian Canal Commission or the Panama Canal prior to September 7, 1916, additional compensation to any officer of the United States Public Health Service detailed with the Panama Canal as chief quarantine 53 Stat. 862 Payment for furnishing of blood for transfusion.*Proviso*.Validation of expenditures heretofore made. officer, and payments of not to exceed $50 in any one case to persons within the Government service who shall furnish blood from their veins for transfusion to the veins of patients in Panama Canal hospitals: *Provided*, That expenditures heretofore made to any person within the Government service for blood furnished to patients in Panama Canal hospitals are hereby validated; $962,035.
Civil government, Panama Canal and Canal Zone. For civil government of the Panama Canal and Canal Zone, including gratuities and necessary clothing for indigent discharged prisoners, $1,180,802. Availability. Total, Panama Canal, $24,774,924, to be available until expended. Additional sums.Disposition of net profits. In addition to the foregoing sums there is appropriated for the fiscal year 1940 for expenditures and reinvestment under the several heads of appropriation aforesaid, without being covered into the Treasury of the United States, and to remain available until expended, all moneys received by the Panama Canal during the fiscal year 1940 and prior fiscal years (exclusive of net profits for such prior fiscal years) from services rendered or materials and supplies furnished to the United States, the Panama Railroad Company, the Canal Zone government, or to their employees, respectively, or to the Panama Government, from hotel and hospital supplies and services; from rentals, wharfage, and like service; from labor, materials, and supplies and other services furnished to vessels other than those passing through the Canal, and to others unable to obtain the same elsewhere; from the sale of scrap and other byproducts of manufacturing and shop operations; from the sale of obsolete and unserviceable materials, supplies, and equipment purchased or acquired for the operation, maintenance, protection, sanitation, and government of the Canal and Canal Zone; and any net profits accruing from such business to the Panama Canal shall annually be covered into the Treasury of the United States.
Waterworks, sewers, and pavements, Panama and Colon. There is also appropriated for the fiscal year 1940 for the operation, maintenance, and extension of waterworks, sewers, and pavements in the cities of Panama and Colon, to remain available until expended, the necessary portions of such sums as shall be paid during that fiscal year as water rentals or directly by the Government of Panama for such expenses. Sec. 2. Short title. This Act may be cited as the “War Department Civil Appropriation Act, 1940”.
Approved, June 28, 1939. To provide revenue, equalize taxation, and for other purposes. Chapter 247 53 Stat. 862 1939-06-29 United States Government Publishing Office text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. Digitization Vendor 2024-11-24 76 1 public [CHAPTER 247] AN ACT To provide revenue, equalize taxation, and for other purposes. June 29, 1939[[H. R. 6851](/us/bill/76/hr/6851)][[Public, No. 155](/us/pl/76/155)] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*, Revenue Act of 1939.
That this Act may be cited as the “Revenue Act of 1939”. TITLE I— EXCISE TAXES AND POSTAL RATES SEC. 1. CONTINUATION OF EXCISE TAXES AND POSTAL RATES. Continuation until 1941.*Ante*, pp. 189, 195, 196, 411, 420, 421, 422, 425.[I. R. C. §§ 1700
(a)(1), 1801, 1802, 3403
(f)(1), 3452, 3460 (a), 3465, 3481 (b), 3482](/us/irc/s1700/a/1/1801/1802/3403/f/1/3452/3460/a/3465/3481/b/3482).[50 Stat. 358](/us/stat/50/358).[39 U. S. C., Supp. IV, § 280 (note)](/us/usc/t39/s280).[48 Stat. 254](/us/stat/48/254). Sections 1700
(a)(1), 1801, 1802, 3403
(f)(1), 3452, 3460 (a), 3465, 3481 (b), and 3482 of the Internal Revenue Code are amended by striking out “1939” wherever appearing therein and inserting in lieu thereof “1941”. Section 1001 (a), as amended, of the Revenue Act of 1932, and section 2, as amended, of the Act entitled “An Act to extend the gasoline tax for one year, to modify postage rates on mail matter, and for other purposes”, approved June 16, 1933, are further amended by striking out “1939” wherever appearing therein and inserting in lieu thereof “1941”. 53 Stat. 863 SEC. 2. SPORTING ARMS AND AMMUNITION TAX. Section 3407 of the Internal Revenue Code (relating to the tax Firearms, shells, and cartridges.*Ante*, p. 412.[I. R. C. § 3407](/us/irc/s3407). on firearms, shells, and cartridges) is amended by adding at the end thereof the following new paragraph:" “The provisions of section 3452 (relating to expiration of taxes) Expiration of taxes.*Ante*, p. 420.[I. R. C. § 3452](/us/irc/s3452). shall not apply to the tax imposed by this section.” " SEC. 3. TOILET PREPARATIONS TAX AMENDMENTS.
(a)Section 3401 of the Internal Revenue Code (relating to the Toilet preparations.*Ante*, p. 410.[I. R. C. § 3401](/us/irc/s3401). tax on toilet preparations) is amended by inserting at the end thereof the following new paragraphs:" “In the case of a sale by a manufacturer to a selling corporation of Transactions otherwise than at arm’s length.Presumption of sales at arm’s length. an article to which the tax under this section applies, the transaction shall be prima facie presumed to be otherwise than at arm’s length if either the manufacturer or the selling corporation owns more than 75 per centum of the outstanding stock of the other, or if more than 75 per centum of the outstanding stock of both corporations is owned by the same persons in substantially the same proportions. Sales by a manufacturer to a selling corporation shall in all other cases be prima facie presumed to be at arm’s length. “Notwithstanding section 3441 (a), in determining, for the purpose Charge for coverings and containers.*Ante*, p. 416.[I. R. C. § 3441 (a)](/us/irc/s3441/a).Items excluded from price. of this section, the price for which an article is sold, whether at arm’s length or not, there shall be included any charge for coverings and containers of whatever nature, only if furnished by the actual manufacturer of the article, and any charge incident to placing the article in condition packed ready for shipment, only if performed by the actual manufacturer of the article, but there shall be excluded the amount of the tax imposed by this section, whether or not stated as a separate charge. Whether sold at arm’s length or not, a transportation, delivery, insurance, or other charge, and the wholesaler’s salesmen’s commissions and costs and expenses of advertising and selling (not required by the foregoing sentence to be included), shall be excluded from the price only if the amount thereof is established to the satisfaction of the Commissioner, in accordance with the regulations.” "
(b)The amendments made by subsection
(a)shall be effective only Effective date of amendments. with respect to sales made after the date of the enactment of this Act. TITLE II— INCOME TAX AMENDMENTS SEC. 201. CORPORATION TAX IN GENERAL. Sections 13, 14, and 15 of the Internal Revenue Code are amended *Ante*, pp. 7–9.[I. R. C. §§ 13–15](/us/irc/s13–15). to read as follows:" “SEC. 13. TAX ON CORPORATIONS IN GENERAL. “(a) Definitions.— For the purposes of this chapter— Definitions. “(1) Adjusted net income.— The term ‘adjusted net income’ “Adjusted net income.”*Ante*, p. 18.[I. R. C. § 26 (a)](/us/irc/s26/a). means the net income minus the credit provided in section 26 (a), relating to interest on certain obligations of the United States and Government corporations. “(2) Normal-tax net income.— The term ‘normal-tax net income’ means the adjusted net income “Normal-tax net income.”*Ante*, p. 19.[I. R. C. § 26 (b)](/us/irc/s26/b). minus the credit for dividends received provided in section 26 (b). “(b) Imposition of Tax.— There shall be levied, collected, and paid Imposition of tax. for each taxable year upon the normal-tax net income of every corporation the normal-tax net income of which is more than $25,000 53 Stat. 864 *Ante*, pp. 78, 71–75, 98, 99.[I. R. C. § 231 (a), Supp. G, Supp. Q](/us/irc/s231/a). (except a corporation subject to the tax imposed by section 14, section 231 (a), Supplement G, or Supplement Q) whichever of the following taxes is the lesser: “(1) General rule. General rule.— A tax of 18 per centum of the normal-tax net income; or “(2) Alternative tax; normal-tax net income in excess of $25,000. Alternative tax (corporations with normal-tax net income slightly more than $25,000).— A tax of $3,525, plus 32 per centum of the amount of the normal-tax net income in excess of $25,000. “(c) Exempt corporations. Exempt Corporations.— *Ante*, p. 33.[I. R. C. § 101](/us/irc/s101). “For corporations exempt from taxation under this chapter, see section 101. “(d) Personal holding companies. Tax on Personal Holding Companies.— *Ante*, p. 104.[I. R. C. § 500](/us/irc/s500). “For surtax on personal holding companies, see section 500. “(e) Improper accumulation of surplus. Improper Accumulation of Surplus.— *Ante*, p. 35.[I. R. C. § 102](/us/irc/s102). “For surtax on corporations which accumulate surplus to avoid surtax on shareholders, see section 102. “SEC. 14. TAX ON SPECIAL CLASSES OF CORPORATIONS. “(a) Imposition of tax.*Ante*, p. 863. Imposition of Tax.— There shall be levied, collected, and paid for each taxable year upon the normal-tax net income of the following corporations (in lieu of the tax imposed by section 13) the tax hereinafter in this section specified. “(b) Normal-tax net incomes, not more than $25,000. Corporations With Normal-tax Net Incomes of Not More Than $25,000.— If the normal-tax net income of the corporation is not more than $25,000, and if the corporation does not come within one of the classes specified in subsection (c), (d), or
(e)of this section, the tax shall be as follows: “Upon normal-tax net incomes not in excess of $5,000, 12½ per centum. “$625 upon normal-tax net incomes of $5,000, and upon normal-tax net incomes in excess of $5,000 and not in excess of $20,000, 14 per centum in addition of such excess. “$2,725 upon normal-tax net incomes of $20,000, and upon normal-tax net incomes in excess of $20,000, 16 per centum in addition of such excess. “(c) Foreign corporations. Foreign Corporations.— “(1) In the case of a foreign corporation engaged in trade or business within the United States or having an office or place of business therein, the tax shall be an amount equal to 18 per centum of the normal-tax net income, regardless of the amount thereof. “(2) In the case of a foreign corporation not engaged in trade or business within the United States and not having an office or *Ante*, p. 78.[I. R. C. § 231 (a)](/us/irc/s231/a). place of business therein, the tax shall be as provided in section 231 (a). “(d) Insurance companies.*Ante*, pp. 71–75.I. R. C., Supp. G. Insurance Companies.— In the case of insurance companies, the tax shall be as provided in Supplement G. “(e) Mutual investment companies.*Ante*, pp. 98, 99.I. R. C., Supp. Q. Mutual Investment Companies.— In the case of mutual investment companies, as defined in Supplement Q, the tax shall be as provided in such Supplement. “(f) Exempt corporations.*Ante*, p. 33.[I. R. C. § 101](/us/irc/s101). Exempt Corporations.— “For corporations exempt from taxation under this chapter, see section 101. “(g) Personal holding companies.*Ante*, p. 104.[I. R. C. § 500](/us/irc/s500). Tax on Personal Holding Companies.— “For surtax on personal holding companies, see section 500. “(h) Improper accumulation of surplus.*Ante*, p. 35.[I. R. C. § 102](/us/irc/s102). Improper Accumulation of Surplus.— “For surtax on corporations which accumulate surplus to avoid surtax on shareholders, see section 102.” " 53 Stat. 865 SEC. 202. TAX ON BANKS AND TRUST COMPANIES. Section 104
(b)of the Internal Revenue Code (relating to the tax Banks and trust companies.*Ante*, p. 36.[I. R. C. § 104 (b)](/us/irc/s104/4). on banks) is amended to read as follows: " “(b) Rate of Tax.— Banks shall be subject to tax under section 13 Rate of tax.*Ante*, pp. 863, 864.[I. R. C. §§ 13, 14 (b)](/us/irc/s13/14/b). or section 14 (b).” " SEC. 203. TAX ON LIFE INSURANCE COMPANIES. Section 201
(b)of the Internal Revenue Code (relating to the tax Life insurance companies.*Ante*, p. 71.[I. R. C. § 201 (b)](/us/irc/s201/b). on life insurance companies) is amended to read as follows:" “(b) Imposition of Tax.— “(1) In general.—Imposition of tax. In lieu of the tax imposed by sections 13 In general.*Ante*, pp. 863, 864.[I. R. C. §§ 13, 14](/us/irc/s13/14). and 14, there shall be levied, collected, and paid for each taxable year upon the normal-tax net income of every life insurance company a tax at the rates provided in section 13 or section 14 (b). “(2) Normal-tax net income of foreign life insurance Normal-tax net income of foreign companies. companies.— In the case of a foreign life insurance company, the normal-tax net income shall be an amount which bears the same ratio to the normal-tax net income, computed without regard to this paragraph, as the reserve funds required by law and held by it at the end of the taxable year upon business transacted within the United States bear to the reserve funds held by it at the end of the taxable year upon all business transacted. “(3) No United States insurance business.— Foreign life No United States business. insurance companies not carrying on an insurance business within the United States and holding no reserve funds upon business transacted within the United States, shall not be taxable under this section but shall be taxable as other foreign corporations.” " SEC. 204. TAX ON INSURANCE COMPANIES OTHER THAN LIFE OR MUTUAL. Section 204
(a)of the Internal Revenue Code (relating to the tax Insurance companies other than life or mutual.*Ante*, p. 72.[I. R. C. § 204 (a)](/us/irc/s204/a). on insurance companies other than life or mutual) is amended to read as follows:" “(a) Imposition of Tax.—Imposition of tax. “(1) In general.— In lieu of the tax imposed by sections 13 In general.*Ante*, pp. 863, 864.[I. R. C. §§ 13, 14](/us/irc/s13/14). and 14, there shall be levied, collected, and paid for each taxable year upon the normal-tax net income of every insurance company (other than a life or mutual insurance company) a tax at the rates provided in section 13 or section 14 (b). “(2) Normal-tax net income of foreign companies.— In the Normal-tax net income of foreign companies. case of a foreign insurance company (other than a life or mutual insurance company), the normal-tax net income shall be the net income from sources within the United States minus the sum of— “(A) Interest on obligations of the United States and Interest on obligations of United States and its instrumentalities.*Ante*, p. 18.[I. R. C. § 26 (a)](/us/irc/s26/a). its instrumentalities.— The credit provided in section 26 (a). “(B) Dividends received.— The credit provided in section 26 (b).Dividends received.*Ante*, p. 19.[I. R. C. § 26 (b)](/us/irc/s26/b). “(3) No United States insurance business.— Foreign insurance No United States insurance business. companies not carrying on an insurance business within the United States shall not be taxable under this section but shall be taxable as other foreign corporations.” " SEC. 205. TAX ON MUTUAL INSURANCE COMPANIES OTHER THAN LIFE. Section 207
(a)of the Internal Revenue Code (relating to the tax Mutual companies other than life.*Ante*, p. 74.[I. R. C. § 207 (a)](/us/irc/s207/a). on mutual insurance companies other than life) is amended to read as follows:" “(a) Imposition of Tax.—Imposition of tax. “(1) In general.— There shall be levied, collected, and paid In general. for each taxable year upon the normal-tax net income of every 53 Stat. 866 *Ante*, pp. 863, 864.[I. R. C. §§ 13, 14 (b)](/us/irc/s13/14/b). mutual insurance company (other than a life insurance company) a tax at the rates provided in section 13 or section 14 (b). “(2) Foreign corporations. Foreign corporations.— The tax imposed by paragraph
(1)shall apply to foreign corporations as well as domestic corporations; but foreign insurance companies not carrying on an insurance business within the United States shall be taxable as other foreign corporations.” " SEC. 206. TAX ON RESIDENT FOREIGN CORPORATIONS. Resident foreign corporations.*Ante*, p. 78.[I. R. C. § 231 (b)](/us/irc/s231/b). Section 231
(b)of the Internal Revenue Code (relating to the tax on resident foreign corporations) is amended to read as follows:" “(b) Resident Corporations.— A foreign corporation engaged in trade or business within the United States or having an office or place *Ante*, p. 864.[I. R. C. § 14
(c)(1)](/us/irc/s14/c/1). of business therein shall be taxable as provided in section 14
(c)(1).” " SEC. 207. TAX ON CORPORATIONS ENTITLED TO THE BENEFITS OF SECTION 251. Income from sources within a United States possession.*Ante*, p. 80.[I. R. C. § 251
(c)(1)](/us/irc/s251/c/1). Section 251
(1)of the Internal Revenue Code (relating to tax on corporations deriving a large part of their income from sources within a possession) is amended to read as follows:" “(1) Corporation tax.*Ante*, pp. 863, 864.[I. R. C. §§ 13, 14 (b)](/us/irc/s13/14/b). Corporation tax.— A domestic corporation entitled to the benefits of this section shall be subject to tax under section 13 or section 14 (b).” " SEC. 208. TAX ON CHINA TRADE ACT CORPORATIONS. China Trade Act corporations.*Ante*, p. 81.[I. R. C. § 261 (a)](/us/irc/s261/a). Section 261
(a)of the Internal Revenue Code (relating to the tax on China Trade Act corporations) is amended to read as follows:" “(a) Corporation tax.[42 Stat. 849](/us/stat/42/849).[15 U. S. C. ch. 4](/us/usc/t15/4).*Ante*, pp. 863, 864.[I. R. C. §§ 13, 14 (b)](/us/irc/s13/14/b). Corporation Tax.— A corporation organized under the China Trade Act, 1922, 42 Stat. 849 (U. S. C., 1934 ed., title 15, chap. 4), shall be subject to tax under section 13 or section 14 (b).” " SEC. 209. TAX ON MUTUAL INVESTMENT COMPANIES. Mutual investment companies.*Ante*, p. 99.[I. R. C. § 362 (b)](/us/irc/s362/b). Section 362
(b)of the Internal Revenue Code (relating to the tax on mutual investment companies) is amended to read as follows:" “(b) Imposition of tax. Imposition of Tax.— There shall be levied, collected, and paid for each taxable year upon the Supplement Q net income of every mutual investment company a tax equal to 18 per centum of the amount thereof.” " SEC. 210. TECHNICAL AMENDMENTS MADE NECESSARY BY CHANGE IN CORPORATION TAX.
(a)Technical amendments.*Ante*, p. 9.[I. R. C. § 21 (b)](/us/irc/s21/b). Section 21
(b)of the Internal Revenue Code is amended to read as follows:" “(b) Cross references.*Ante*, p. 863.[I. R. C. § 13](/us/irc/s13). Cross References.— For definition of ‘adjusted net income’ and ‘normal-tax net income’, see section 13.” "
(b)Bankruptcy or receivership.*Ante*, p. 59.[I. R. C. § 141 (j)](/us/irc/s141/j). Section 141
(j)of the Internal Revenue Code (relating to affiliated corporations in bankruptcy or receivership) shall not apply with respect to a taxable year beginning after December 31, 1939.
(c)China Trade Act corporations, additional credits.*Ante*, p. 81.[I. R. C. § 262](/us/irc/s262).*Ante*, pp. 863, 864, 111.[I. R. C. §§ 13, 14, 600](/us/irc/s13/14/600). Section 262 of the Internal Revenue Code (relating to additional credits of China Trade Act corporations) is amended by striking out “sections 14 and 600” and inserting in lieu thereof “sections 13, 14, and 600”; and by striking out “section 14” wherever it appears and inserting in lieu thereof “section 13 or 14”. 53 Stat. 867 SEC. 211. NET OPERATING LOSSES.
(a)Section 23 of the Internal Revenue Code (relating to deductions Deductions from gross income.*Ante*, p. 12.[I. R. C. § 23](/us/irc/s23). from gross income) is amended by inserting at the end thereof the following:" “(s) Net Operating Loss Deduction.— For any taxable year beginning Net operating loss deduction. after December 31, 1939, the net operating loss deduction computed under section 122.” "
(b)The Internal Revenue Code is amended by inserting after section *Ante*, p. 56. 121 the following new section:" “SEC. 122. NET OPERATING LOSS DEDUCTION. “(a) Definition of Net Operating Loss.— As used in this section, “Net operating loss” defined. the term ‘net operating loss’ means the excess of the deductions allowed by this chapter over the gross income, with the exceptions and limitations provided in subsection (d). “(b) Amount of Carry-Over.— The term ‘net operating loss carry-over’ Amount of carry-over. means in the case of any taxable year the sum of: “(1) The amount, if any, of the net operating loss for the first preceding taxable year; and “(2) The amount of the net operating loss, if any, for the second preceding taxable year reduced by the excess, if any, of the net income (computed with the exceptions and limitations provided in subsection
(d)(1), (2), (3), and (4)) for the first preceding taxable year over the net operating loss for the third preceding taxable year. “(c) Amount of Net Operating Loss Deduction.— The amount of Amount of net operating loss deduction. the net operating loss deduction shall be the amount of the net operating loss carry-over reduced by the amount, if any, by which the net income (computed with the exceptions and limitations provided in subsection
(d)(1), (2), (3), and (4)) exceeds, in the case of a taxpayer other than a corporation, the net income (computed without such deduction), or, in the case of a corporation, the normal-tax net income (computed without such deduction); “(d) Exceptions and Limitations.— The exceptions and limitations Exceptions and limitations. referred to in subsections (a), (b), and
(c)shall be as follows: “(1) The deduction for depletion shall not exceed the amount Depletion.*Ante*, p. 45.[I. R. C. § 114
(b)(2), (3), (4)](/us/irc/s114/b/2/3/4). which would be allowable if computed without reference to discovery value or to percentage depletion under section 114
(b)(2), (3), or (4); “(2) There shall be included in computing gross income the Interest.*Ante*, p. 12.[I. R. C. § 23 (b)](/us/irc/s23/b). amount of interest received which is wholly exempt from the taxes imposed by this chapter, decreased by the amount of interest paid or accrued which is not allowed as a deduction by section 23 (b), relating to interest on indebtedness incurred or continued to purchase or carry certain tax-exempt obligations; “(3) No net operating loss deduction shall be allowed; No net operating loss deduction allowed. “(4) Long-term capital gains and long-term capital losses Long-term capital gains and losses.*Ante*, p. 51.[I. R. C. § 117 (b)](/us/irc/s117/b). shall be taken into account without regard to the provisions of section 117 (b). As so computed the amount deductible on account of long-term capital losses shall not exceed the amount includible on account of the long-term capital gains, and the amount deductible on account of short-term capital losses shall not exceed the amount includible on account of the short-term capital gains; 53 Stat. 868 “(5) Deductions otherwise allowed by law not attributable to the operation of a trade or business regularly carried on by the taxpayer shall (in the case of a taxpayer other than a corporation) be allowed only to the extent of the amount of the gross income not derived from such trade or business. For the purposes of this paragraph deductions and gross income shall be computed with the exceptions and limitations specified in paragraphs
(1)to
(4)of this subsection. “(e) No carry-over from year prior to 1939. No Carry-over from Year Prior to 1939.— As used in this section, the terms ‘third preceding taxable year’, ‘second preceding taxable year’, and ‘first preceding taxable year’ do not include any taxable year beginning prior to January 1, 1939.” "
(c)Estates, trusts, and participants in common trust funds.*Ante*, p. 68. Allowance of Deduction to Estates, Trusts, and Participants in Common Trust Funds.— The Internal Revenue Code is amended by inserting after the section 169 the following new section:" “SEC. 170. NET OPERATING LOSSES. Allowance of deduction for net operating losses.*Ante*, p. 867. “The benefit of the deduction for net operating losses allowed by section 23
(s)shall be allowed to estates and trusts under regulations prescribed by the Commissioner with the approval of the Secretary. The benefit of such deduction shall not be allowed to a common trust fund, but shall be allowed to the participants in the common trust fund under regulations prescribed by the Commissioner with the approval of the Secretary.” "
(d)Partners.*Ante*, p. 71. Allowance of Deduction to Partners.— The Internal Revenue Code is amended by inserting after section 188 the following new section:" “SEC. 189. NET OPERATING LOSSES. Net operating loss deduction.*Ante*, p. 867. “The benefit of the deduction for net operating losses allowed by section 23
(s)shall not be allowed to a partnership but shall be allowed to the members of the partnership under regulations prescribed by the Commissioner with the approval of the Secretary.” "
(e)Life insurance companies, deductions. Allowance of Deduction to Insurance Companies.—
(1)*Ante*, p. 71.[I. R. C. § 203 (a)](/us/irc/s203/a). Section 203
(a)of the Internal Revenue Code (relating to deductions of life insurance companies) is amended by inserting at the end thereof the following new paragraph:" “(8) The amount of the net operating loss deduction provided *Ante*, p. 867. in section 23 (s).” "
(2)*Ante*, p. 74.[I. R. C. § 207](/us/irc/s207). The Internal Revenue Code is amended by inserting after section 207 the following:" “SEC. 208. NET OPERATING LOSSES. Insurance companies, net operating losses.*Ante*, p. 867. “The benefit of the deduction for net operating losses allowed by section 23
(s)shall be allowed to insurance companies subject to the taxes imposed in this supplement under regulations prescribed by the Commissioner with the approval of the Secretary.” "
(f)Section 102 net income, definition modified.*Ante*, p. 35.[I. R. C. § 102 (d)](/us/irc/s102/d).*Ante*, p. 867. Denial of Deduction to Section 102 Corporations.— Section 102
(1)of the Internal Revenue Code (relating to the definition of section 102 net income) is amended by striking out “The term ‘section 102 net income’ means the net income minus the sum of” and inserting in lieu thereof “The term ‘section 102 net income’ means the net income, computed without the net operating loss deduction provided in section 23 (s), minus the sum of”. 53 Stat. 869
(g)Denial of Deduction to Foreign Personal Holding Foreign personal holding companies, disallowed deductions.*Ante*, p. 96.[I. R. C. § 336 (b)](/us/irc/s336/b). Companies.— Section 336
(b)of the Internal Revenue Code (relating to disallowed deductions in computing net income of foreign personal holding companies) is amended by inserting at the end thereof the following:" “(3) Net loss carry-over disallowed.— The deduction for net *Ante*, p. 867. operating losses provided in section 23
(s)shall not be allowed.” "
(h)Denial of Deduction to Mutual Investment Companies.—Mutual investment companies, disallowed deductions.*Ante*, p. 99.[I. R. C. § 362 (a)](/us/irc/s362/a). Section 362
(a)of the Internal Revenue Code (relating to definition of Supplement Q net income) is amended to read as follows:" “(a) Supplement Q Net Income.— For the purposes of this chapter “Supplement Q net income”, defined.*Ante*, p. 867.*Ante*, p. 20.[I. R. C. § 27 (b)](/us/irc/s27/b). the term ‘Supplement Q, net income’ means the adjusted net income, computed without the net operating loss deduction provided in section 23 (s), minus the basic surtax credit computed under section 27
(b)without the application of paragraphs
(2)and (3).” "
(i)Denial of Deduction to Domestic Personal Holding Subchapter A net income.*Ante*, p. 108.[I. R. C. § 505](/us/irc/s505). Companies.— Section 505 of the Internal Revenue Code (relating to definition of subchapter A net income) is amended by inserting at the end thereof the following:" “(c) Net Loss Carry-Over Disallowed.— The deduction for net Disallowed deductions.*Ante*, p. 867. operating losses provided in section 23
(s)shall not be allowed.” "
(j)Technical Amendment.— Section 26
(2)of the Internal Operating loss credit, technical amendment.*Ante*, p. 19.[I. R. C. § 26
(c)(2)](/us/irc/s26/c/2). Revenue Code (relating to operating loss credit) is amended by striking out “chapter” and inserting in lieu thereof “section”. SEC. 212. CORPORATION CAPITAL LOSSES.
(a)Limitations.— Section 117
(d)of the Internal Revenue Code Corporation capital losses.*Ante*, p. 52.[I. R. C. § 117 (d)](/us/irc/s117/d). (relating to limitation on capital losses) is amended to read as follows:" “(d) Limitation on Capital Losses.— Long-term capital losses Limitation on capital losses. shall be allowed, but short-term capital losses shall be allowed only to the extent of short-term capital gains.” "
(b)Net Short-Term Loss Carry-Over.— Section 117
(e)of the Net short-term loss carry-over.*Ante*, p. 52.[I. R. C. § 117 (e)](/us/irc/s117/e). Internal Revenue Code (relating to the one-year carry-over of net short-term capital loss) is amended to read as follows:" “(e) Net Short-Term Capital Loss Carry-Over.— If any taxpayer Net short-term capital loss carry-over. sustains in any taxable year, beginning after December 31, 1937, in the case of a taxpayer other than a corporation, or beginning after December 31, 1939, in the case of a corporation, a net short-term capital loss, such loss (in an amount not in excess of the net income for such year) shall be treated in the succeeding taxable year as a short-term capital loss, except that it shall not be included in computing the net short-term capital loss for such year.” "
(c)Capital Losses of Foreign Personal Holding Companies.—Supplement P net income.*Ante*, p. 95.[I. R. C. § 336](/us/irc/s336). Section 336 of the Internal Revenue Code (relating to definition of Supplement P net income) is amended by inserting at the end thereof the following new subsection:" “(c) Capital Losses.— The net income shall be computed without Capital losses.[I. R. C. § 117 (d), (e)](/us/irc/s117/d/e). regard to section 117
(d)and (e), and losses from sales or exchanges of capital assets shall be allowed only to the extent of $2,000 plus the gains from such sales or exchanges.” "
(d)Capital Losses of Domestic Personal Holding Companies.—Subchapter A net income.*Ante*, p. 108.[I. R. C. § 505](/us/irc/s505). Section 505 of the Internal Revenue Code (relating to definition of subchapter A net income) is amended by inserting at the end thereof the following new subsection:" “(d) Capital Losses.— The net income shall be computed without Capital losses.*Ante*, p. 52.[I. R. C. § 117 (d), (e)](/us/irc/s117/d/e). regard to section 117
(d)and (e), and losses from sales or exchanges of capital assets shall be allowed only to the extent of $2,000 plus the gains from such sales or exchanges.” " 53 Stat. 870 SEC. 213. ASSUMPTION OF INDEBTEDNESS.
(a)Recognition of gain or loss.*Ante*, p. 37.[I. R. C. § 112](/us/irc/s112). Assumption of Liability Not Recognized.— Section 112 of the Internal Revenue Code (relating to recognition of gain or loss) is amended by adding at the end thereof the following new subsection:" “(k) Assumption of liability.*Ante*, p. 37.*Ante*, p. 39.If purpose was to avoid Federal income tax.Not a bona fide transaction.Burden of proof. Assumption of Liability Not Recognized.— Where upon an exchange the taxpayer receives as part of the consideration property which would be permitted by subsection
(4)or
(5)of this section to be received without the recognition of gain if it were the sole consideration, and as part of the consideration another party to the exchange assumes a liability of the taxpayer or acquires from the taxpayer property subject to a liability, such assumption or acquisition shall not be considered as ‘other property or money’ received by the taxpayer within the meaning of subsection (c), (d), or
(e)of this section and shall not prevent the exchange from being within the provisions of subsection
(4)or (5); except that if, taking into consideration the nature of the liability and the circumstances in the light of which the arrangement for the assumption or acquisition was made, it appears that the principal purpose of the taxpayer with respect to the assumption or acquisition was a purpose to avoid Federal income tax on the exchange, or, if not such purpose, was not a bona fide business purpose, such assumption or acquisition (in the amount of the liability) shall, for the purposes of this section, be considered as money received by the taxpayer upon the exchange. In any suit or proceeding where the burden is on the taxpayer to prove that such assumption or acquisition is not to be considered as money received by the taxpayer, such burden shall not be considered as sustained unless the taxpayer sustains such burden by the clear preponderance of the evidence.” "
(b)Reorganization, amendment to definition.*Ante*, p. 40.[I. R. C. § 112
(g)(1)](/us/irc/s112/g/1). Amendment to Definition of Reorganization.— Section 112
(1)of the Internal Revenue Code (relating to definition of reorganization) is amended to read as follows:" “(1) The term ‘reorganization’ means
(A)a statutory merger or consolidation, or
(B)the acquisition by one corporation, in exchange solely for all or a part of its voting stock, of at least 80 per centum of the voting stock and at least 80 per centum of the total number of shares of all other classes of stock of another corporation, or
(C)the acquisition by one corporation, in exchange solely for all or a part of its voting stock, of substantially all the properties of another corporation, but in determining whether the exchange is solely for voting stock the assumption by the acquiring corporation of a liability of the other, or the fact that property acquired is subject to a liability, shall be disregarded, or
(D)a transfer by a corporation of all or a part of its assets to another corporation if immediately after the transfer the transferor or its shareholders or both are in control of the corporation to which the assets are transferred, or
(E)a recapitalization, or
(F)a mere change in identity, form, or place of organization, however effected.” "
(c)Requirement of substantially proportionate interests.*Ante*, p. 37.[I. R. C. § 112
(b)(5)](/us/irc/s112/b/5).Where transferee assumes liability of transferor. Requirement of Substantially Proportionate Interests.— Section 112
(5)of the Internal Revenue Code (relating to requirement of substantially proportionate interests) is amended by adding at the end thereof the following new sentence: “Where the transferee assumes a liability of a transferor, or where the property of a transferor is transferred subject to a liability, then for the purpose only of determining whether the amount of stock or securities received by each of the transferors is in the proportion required by this paragraph, the amount of such liability (if under subsection
(k)it is not to be considered as ‘other property or money’) shall be considered as stock or securities received by such transferor.” 53 Stat. 871
(d)Basis of Property.— Section 113
(6)of the Internal Revenue Basis of property.*Ante*, p. 41.[I. R. C. § 113
(a)(6)](/us/irc/s113/a/6).Money received by taxpayer upon the exchange. Code (relating to basis of property) is amended by inserting before the last sentence thereof the following: “Where as part of the consideration to the taxpayer another party to the exchange assumed a liability of the taxpayer or acquired from the taxpayer property subject to a liability, such assumption or acquisition (in the amount of the liability) shall, for the purposes of this paragraph, be considered as money received by the taxpayer upon the exchange.”
(e)Taxable Years to Which Applicable.— The amendments made Taxable years to which applicable. by subsections (a), (b), (c), and
(d)shall be applicable to taxable years beginning after December 31, 1938.
(f)Assumption of Liability Not Recognized Under Prior Acts.—Assumption of liability not recognized under prior Acts.
(1)Where upon an exchange occurring in a taxable year ending *Post*, p. 1402.[52 Stat. 485](/us/stat/52/485).[43 Stat. 256](/us/stat/43/256).*Ante*, pp. 37, 870.[I. R. C. § 112
(4)(5)](/us/irc/s112/b/4/5).Acquisition not considered as “other property or money” received by taxpayer.[52 Stat. 488, 489](/us/stat/52/488/489); [43 Stat. 257](/us/stat/43/257).Exception.[52 Stat. 485](/us/stat/52/485).[43 Stat. 256](/us/stat/43/256).*Ante*, pp. 37, 870.[I. R. C. § 112](/us/irc/s112). after December 31, 1923, and beginning before January 1, 1939, the taxpayer received as part of the consideration property which would be permitted by subsection
(4)or
(5)of section 112 of the Revenue Act of 1938, or the corresponding provisions of the Revenue Act of 1924 or subsequent revenue Acts, to be received without the recognition of gain if it were the sole consideration, and as part of the consideration another party to the exchange assumed a liability of the taxpayer or acquired from the taxpayer property subject to a liability, such assumption or acquisition shall not be considered as “other property or money” received by the taxpayer within the meaning of subsection (c), (d), or
(e)of section 112 of the Revenue Act of 1938, or the corresponding provisions of the Revenue Act of 1924 or subsequent revenue Acts, and shall not prevent the exchange from being within the provisions of subsection
(4)or
(5)of section 112 of the Revenue Act of 1938, or the corresponding provisions of the Revenue Act of 1924 or subsequent revenue Acts; except that if, in the determination of the tax liability of such taxpayer for the taxable year in which the exchange occurred, by a decision of the Board of Tax Appeals or of a court which became final before the ninetieth day after the date of enactment of the Revenue Act of 1939, or by a closing agreement, gain was recognized to such taxpayer by reason of such assumption or acquisition of property, then for the purposes of section 112 of the Revenue Act of 1938, and corresponding provisions of the Revenue Act of 1924 or subsequent revenue Acts, such assumption or acquisition (in the amount of the liability considered in computing the gain) shall be considered as money received by the taxpayer upon the exchange.
(2)Paragraph
(1)shall be effective with respect to the Revenue Effective date of paragraph. Act of 1924 and subsequent revenue Acts as of the date of enactment of each such Act.
(g)Definition of Reorganization Under Prior Acts.—Definition of reorganization under prior Acts.
(1)Section 112
(1)of the Revenue Acts of 1938, 1936, and 1934 are amended to read as follows: [52 Stat. 489](/us/stat/52/489); [49 Stat. 1681](/us/stat/49/1681); [48 Stat. 705](/us/stat/48/705)." “(1) The term ‘reorganization’ means
(A)a statutory merger or consolidation, or
(B)the acquisition by one corporation, in exchange solely for all or a part of its voting stock, of substantially all the properties of another corporation, but in determining whether the exchange is solely for voting stock the assumption by the acquiring corporation of a liability of the other, or the fact that property acquired is subject to a liability, shall be disregarded; or the acquisition by one corporation in exchange solely for all or a part of its voting stock of at least 80 per centum of the voting stock and at least 80 per centum of the total number of shares of all other classes of stock of another corporation, or
(C)a transfer by a corporation of all or a part of its assets to another corporation if immediately after the transfer the transferor or its shareholders or both are in control of the 53 Stat. 872 corporation to which the assets are transferred, or
(D)a recapitalization, or
(E)a mere change in identity, form, or place of organization, however effected.” "
(2)Effective date. The amendments made by paragraph
(1)to the respective Acts amended shall be effective as to each of such Acts as of the date of enactment of such Act.
(h)Substantially proportionate interests under prior Acts.[52 Stat. 485](/us/stat/52/485); [49 Stat. 1679](/us/stat/49/1679); [48 Stat. 704](/us/stat/48/704); [47 Stat. 196](/us/stat/47/196); [45 Stat. 816](/us/stat/45/816); [44 Stat. 12](/us/stat/44/12); [43 Stat. 256](/us/stat/43/256).Assumption of transferor’s liability by transferee; property transferred subject to a liability, etc. Substantially Proportionate Interests Under Prior Acts.—
(1)Section 112
(5)of the Revenue Acts of 1938, 1936, 1934, 1932, and 1928, and section 203
(4)of the Revenue Acts of 1926 and 1924 are amended by inserting at the end thereof the following: “Where the transferee assumes a liability of a transferor, or where the property of a transferor is transferred subject to a liability, then for the purpose only of determining whether the amount of stock or securities received by each of the transferors is in the proportion required by this paragraph, the amount of such liability (if under section 213 of the Revenue Act of 1939 it is not considered as ‘other property or money’) shall be considered as stock or securities received by such transferor. If, as the result of a determination of the tax liability of the taxpayer for the taxable year in which the exchange occurred, by a decision of the Board of Tax Appeals or of a court which became final before the ninetieth day after the date of the enactment of the Revenue Act of 1939, or by a closing agreement, the treatment of the amount of such liability was different from the treatment which would result from the application of the preceding sentence, such sentence shall not apply and the result of such determination shall be deemed proper.”
(2)Effective date. The amendments made by paragraph
(1)to the respective Acts amended shall be effective as to each of such Acts as of the date of enactment of such Act.
(i)Basis under prior Acts.[52 Stat. 491](/us/stat/52/491); [49 Stat. 1682](/us/stat/49/1682); [48 Stat. 706](/us/stat/48/706); [47 Stat. 199](/us/stat/47/199); [45 Stat. 819](/us/stat/45/819); [44 Stat. 15](/us/stat/44/15); [43 Stat. 258](/us/stat/43/258).Where taxpayer’s liability assumed by transferee, etc. Basis Under Prior Acts.—
(1)Section 113
(6)of the Revenue Acts of 1938, 1936, 1934, 1932, and 1928, and section 204
(6)of the Revenue Acts of 1926 and 1924 are amended by inserting before the last sentence thereof the following: “Where as part of the consideration to the taxpayer another party to the exchange assumed a liability of the taxpayer or acquired from the taxpayer property subject to a liability, such assumption or acquisition (in the amount of the liability) shall, for the purposes of this paragraph, be considered as money received by the taxpayer upon the exchange.”
(2)Effective date. The amendments made by paragraph
(1)to the respective Acts amended shall be effective as to each of such Acts as of the date of enactment of such Act. SEC. 214. BASIS OF STOCK DIVIDENDS AND STOCK RIGHTS.
(a)Unadjusted basis of property.*Ante*, p. 40.[I. R. C. § 113 (a)](/us/irc/s113/a). Basis Under Internal Revenue Code.— Section 113
(a)of the Internal Revenue Code (relating to the unadjusted basis of property) is amended by inserting at the end thereof the following new paragraph:" “(19)
(A)Allocations of stock. If the property was acquired by a shareholder in a corporation and consists of stock in such corporation, or rights to acquire such stock, acquired by him after February 28, 1913, in a distribution by such corporation (hereinafter in this paragraph called ‘new stock’), or consists of stock in respect of which such distribution was made (hereinafter in this paragraph called ‘old stock’) and “(i) the new stock was acquired in a taxable year beginning before January 1, 1936; or “(ii) the new stock was acquired in a taxable year beginning after December 31, 1935, and its distribution did not 53 Stat. 873 constitute income to the shareholder within the meaning of the Sixteenth Amendment to the Constitution; then the basis of the new stock and of the old stock, respectively, Basis. shall, in the shareholder’s hands, be determined by allocating between the old stock and the new stock the adjusted basis of the old stock; such allocation to be made under regulations which shall be prescribed by the Commissioner with the approval of the Secretary. “(B) Where the new stock consisted of rights to acquire stock Where proceeds of acquired stock, etc., were included in gross income before January 1, 1939.Claim for refund, etc., not asserted. and such rights were sold in a taxable year beginning before January 1, 1939, and there was included in the gross income for such year the entire amount of the proceeds of such sale, then, if before the date of the enactment of the Revenue Act of 1939 the taxpayer has not asserted (by claim for a refund or credit or otherwise) that any part of the proceeds of the sale of such new stock should be excluded from gross income for the year of its sale, the basis of the old stock shall be determined without regard to subparagraph (A); and no part of the proceeds of the sale of such new stock shall ever be excluded from the gross income of the year of such sale. “(C) Subparagraph
(A)shall not apply if the new stock was Allocation inapplicable in certain cases. acquired in a taxable year beginning before January 1, 1936, and there was included, as a dividend, in gross income for such year an amount on account of such stock, and after such inclusion such amount was not (before the date of the enactment of the Revenue Act of 1939) excluded from gross income for such year. “(D) Subparagraph
(A)shall not apply if the new stock or the old stock was sold or otherwise disposed of in a taxable year beginning prior to January 1, 1936, and the basis (determined by a decision of a court or the Board of Tax Appeals, or a closing agreement, and the decision or agreement became final before the ninetieth day after the date of the enactment of the Revenue Act of 1939) for determining gain or loss on such sale or other disposition was ascertained by a method other than that of allocation of the basis of the old stock.” "
(b)Distributions Not Treated as Dividends.— Section 115
(d)Distributions not treated as dividends.*Ante*, p. 47.[I. R. C. § 115 (d)](/us/irc/s115/d). of the Internal Revenue Code (relating to distributions applied in reduction of basis) is amended to read as follows:" “(d) Other Distributions From Capital.— If any distribution Other distributions from capital.*Ante*, pp. 40, 871.[I. R. C. § 113](/us/irc/s113).Distribution in liquidation, etc. made by a corporation to its shareholders is not out of increase in value of property accrued before March 1, 1913, and is not a dividend, then the amount of such distribution shall be applied against and reduce the adjusted basis of the stock provided in section 113, and if in excess of such basis, such excess shall be taxable in the same manner as a gain from the sale or exchange of property. This subsection shall not apply to a distribution in partial or complete liquidation or to a distribution which, under subsection
(f)(1), is not treated as a dividend, whether or not otherwise a dividend.” "
(c)Determination of Period for Which Held.— Section 117
(h)Determination of period for which held.*Ante*, p. 52.[I. R. C. § 117 (h)](/us/irc/s117/h). of the Internal Revenue Code (relating to determination of period for which property is held) is amended by adding at the end thereof the following new paragraph:" “(5) In determining the period for which the taxpayer has held stock or rights to acquire stock received upon a distribution, if the basis of such stock or rights is determined under section 113
(19)*Ante*, p. 872. (A), there shall (under regulations prescribed by the Commissioner with the approval of the Secretary) be included the period for which he held the stock in the distributing corporation prior to the receipt of such stock or rights upon such distribution.” " 53 Stat. 874
(d)Taxable years to which applicable. Taxable Years to Which Applicable.— The amendments made by subsections (a), (b), and
(c)shall be applicable to taxable years beginning after December 31, 1938.
(e)Basis under prior Acts.[52 Stat. 447](/us/stat/52/447). Basis Under Prior Acts.— The following rules shall be applied, for the purposes of the Revenue Act of 1938 or any prior revenue Act as if such rules were a part of each such Act when it was enacted, in determining the basis of property acquired by a shareholder in a corporation which consists of stock in such corporation, or rights to acquire such stock, acquired by him after February 28, 1913, in a distribution by such corporation (hereinafter in this subsection called “new stock”), or consisting of stock in respect of which such distribution was made (hereinafter in this subsection called “old stock”) if the new stock was acquired in a taxable year beginning before January 1, 1936, or acquired in a taxable year beginning after December 31, 1935, and its distribution did not constitute income to the shareholder within the meaning of the Sixteenth Amendment to the Constitution:
(1)Determination of basis of new and of old stock. The basis of the new stock and of the old stock, respectively, shall, in the shareholder’s hands, be determined by allocating between the old stock and the new stock the adjusted basis of the old stock; such allocation to be made under regulations which shall be prescribed by the Commissioner with the approval of the Secretary.
(2)Where entire proceeds of stock sale were included in gross income.Claim for refund not asserted. Where the new stock consisted of rights to acquire stock and such rights were sold and there was included in the gross income for the taxable year of the sale the entire amount of the proceeds of such sale, then, if before the date of the enactment of this Act the taxpayer has not asserted (by claim for a refund or credit or otherwise) that any part of the proceeds of the sale of such new stock should be excluded from gross income for the year of its sale, the basis of the old stock shall be determined without regard to paragraph
(1)and no part of the proceeds of the sale of such new stock shall ever be excluded from the gross income of the year of such sale.
(3)Allocation inapplicable in certain cases. Paragraph
(1)shall not apply if the new stock was acquired in a taxable year beginning before January 1, 1936, and there was included, as a dividend, in gross income for such year an amount on account of such stock, and after such inclusion such amount was not (before the date of the enactment of this Act) excluded from gross income for such year.
(4)Paragraph
(1)shall not apply if the new stock or the old stock was sold or otherwise disposed of in a taxable year begining before January 1, 1936, and the basis (determined by a decision of a court or the Board of Tax Appeals, or a closing agreement, and the decision or agreement became final before the ninetieth day after the date of the enactment of this Act) for determining gain or loss on such sale or other disposition was ascertained by a method other than that of allocation of the basis of the old stock.
(f)Determination under prior Acts of period for which held. Determination Under Prior Acts of Period for Which Held.— For the purposes of the Revenue Act of 1938 or any prior revenue Act, in determining the period for which the taxpayer has held stock or rights to acquire stock, received upon a distribution, if the basis of such stock or rights is determined under section 214
(1)of the Revenue Act of 1939, there shall (under regulations which shall be prescribed by the Commissioner with the approval of the Secretary) be included the period for which he held the stock in the distributing corporation prior to the receipt of such stock or rights upon such distribution. This subsection shall be applicable as if it were a part of each such Act when such Act was enacted. 53 Stat. 875 SEC. 215. DISCHARGE OF INDEBTEDNESS.
(a)Income From Discharge of Indebtedness.— Section 22
(b)of Exclusions from gross income.*Ante*, p. 10.[I. R. C. § 22 (b)](/us/irc/s22/b). the Internal Revenue Code (relating to exclusions from gross income) is amended by adding at the end thereof the following new paragraph: “(9) Income from discharge of indebtedness.— In the case of Income from discharge of corporate indebtedness. a corporation, the amount of any income of the taxpayer attributable to the discharge, within the taxable year, of any indebtedness of the taxpayer or for which the taxpayer is liable evidenced by a security (as hereinafter in this paragraph defined) if—
(A)it is established to the satisfaction of the Commissioner, or
(B)it is certified to the Commissioner by any Federal agency authorized to make loans on behalf of the United States to such corporation or by any Federal agency authorized to exercise regulatory power over such corporation, that at the time of such discharge the taxpayer was in an unsound financial condition, and if the taxpayer makes and files at the time of filing the return, in such manner as the Commissioner, with the approval of the Secretary, by regulations prescribes, its consent to the regulations prescribed under section 113
(3)then in effect. In such case the amount of any income of the taxpayer attributable to any unamortized premium (computed as of the first day of the taxable year in which such discharge occurred) with respect to such indebtedness shall not be included in gross income and the amount of the deduction attributable to any unamortized discount (computed as of the first day of the taxable year in which such discharge occurred) with respect to such indebtedness shall not be allowed as a deduction. As used in this paragraph the term ‘security’ means any “Security” defined.Application of paragraph. bond, debenture, note, or certificate, or other evidence of indebtedness, issued by any corporation, in existence on June 1, 1939. This paragraph shall not apply to any discharge occurring before the date of the enactment of the Revenue Act of 1939, or in a taxable year beginning after December 31, 1942.”
(b)Basis Reduced.— Section 113
(b)of the Internal Revenue Code Adjusted basis of property reduced.*Ante*, p. 44.[I. R. C. § 113 (b)](/us/irc/s113/b). (relating to the adjusted basis of property) is amended by adding at the end thereof the following new paragraph:" “(3) Discharge of indebtedness.— Where in the case of a corporation Discharge of indebtedness. any amount is excluded from gross income under section 22
(9)on account of the discharge of indebtedness the whole or a part of the amount so excluded from gross income shall be applied in reduction of the basis of any property held (whether before or after the time of the discharge) by the taxpayer during any portion of the taxable year in which such discharge occurred. The amount to be so applied (not in excessi of the amount so excluded from gross income, reduced by the amount of any deduction disallowed under section 22
(b)(9)) and the particular properties to which the reduction shall be allocated, shall be determined under regulations (prescribed by the Commissioner with the approval of the Secretary) in effect at the time of the filing of the consent by the taxpayer referred to in section 22
(b)(9). The reduction shall be made as of the first day of the taxable year in which the discharge occurred except in the case of property not held by the taxpayer on such first day, in which case it shall take effect as of the time the holding of the taxpayer began.” " 53 Stat. 876
(c)Taxable years to which applicable. Taxable Years to Which Applicable.— The amendments made by this section shall be applicable to taxable years beginning after December 31, 1938. SEC. 216. FOREIGN TAX CREDIT.
(a)Allowance of foreign tax credit.*Ante*, p. 56.[I. R. C. § 131 (a)](/us/irc/s131/a).*Ante*, p. 35.[I. R. C. § 102](/us/irc/s102). Disallowance of Credit to Section 102 Corporations.— Section 131
(a)of the Internal Revenue Code (relating to allowance of foreign tax credit) is amended by striking out “If the taxpayer signifies in his return his desire to have the benefits of this section, the tax imposed by this chapter shall be credited with” and inserting in lieu thereof “If the taxpayer signifies in his return his desire to have the benefits of this section, the tax imposed by this chapter, except the tax imposed under section 102, shall be credited with”.
(b)Limit on foreign tax credit.*Ante*, p. 56.[I. R. C. § 131 (b)](/us/irc/s131/b). Limit on Credit.— Section 131
(b)of the Internal Revenue Code (relating to the limit on foreign tax credit) is amended to read as follows:" “(b) Limit on Credit.— The amount of the credit taken under this section shall be subject to each of the following limitations: “(1) The amount of the credit in respect of the tax paid or accrued to any country shall not exceed the same proportion of the tax against which such credit is taken, which the taxpayer’s net income from sources within such country bears to his entire net income, in the case of a taxpayer other than a corporation, or to the normal-tax net income, in the case of a corporation, for the same taxable year; and “(2) The total amount of the credit shall not exceed the same proportion of the tax against which such credit is taken, which the taxpayer’s net income from sources without the United States bears to his entire net income, in the case of a taxpayer other than a corporation, or to the normal-tax net income, in the case of a corporation, for the same taxable year.” "
(c)Taxes of foreign subsidiary, credit.*Ante*, p. 57.[I. R. C. § 131 (f)](/us/irc/s131/f). Foreign Subsidiary.— Section 131
(f)of the Internal Revenue Code (relating to credit for taxes of foreign subsidiary) is amended by striking out “entire net income” and inserting in lieu thereof “normal-tax net income”. SEC 217. EXEMPTION OF CERTAIN FEDERAL EMPLOYEES’ ORGANIZATIONS.
(a)Tax exemption of certain Federal employees’ organizations.*Ante*, p. 33.[I. R. C. § 101](/us/irc/s101). Section 101 of the Internal Revenue Code (relating to exemptions from tax on corporations) is amended by adding at the end thereof the following new paragraph:" “(19) Voluntary employees’ beneficiary associations providing for the payment of life, sick, accident, or other benefits to the members of such association or their dependents or their designated beneficiaries, if
(A)admission to membership in such association is limited to individuals who are officers or employees of the United States Government, and
(B)no part of the net earnings of such association inures (other than through such payments) to the benefit of any private shareholder or individual.” "
(b)Taxable years to which applicable. The amendment made by this section shall be applicable to taxable years beginning after December 31, 1938. SEC. 218. EMPLOYEES’ TRUSTS. Employees’ trusts.*Ante*, p. 67.[I. R. C. § 165](/us/irc/s165). Section 165 of the Internal Revenue Code (relating to exemption from tax of certain trusts for the benefit of employees) is amended by inserting before the first paragraph “(a) Exemption From 53 Stat. 877 Tax.—” and by inserting at the end thereof the following new subsection:" “(b) Taxable Year Beginning Prior to January 1, 1940.— The Taxable year beginning prior to January 1, 1940. provisions of clause
(2)of subsection
(a)shall not apply to a taxable year beginning prior to January 1, 1940.” " SEC. 219. INVENTORIES.
(a)Amendment to Code.— Section 22
(d)of the Internal Revenue Inventories in certain industries.*Ante*, p. 11.[I. R. C. § 22 (d)](/us/irc/s22/d). Code (relating to inventories in certain industries) is amended to read as follows:" “(d)
(1)A taxpayer may use the following method (whether or Election of method. not such method has been prescribed under subsection (c)) in inventorying goods specified in the application required under paragraph (2): “(A) Inventory them at cost; “(B) Treat those remaining on hand at the close of the taxable year as being: First, those included in the opening inventory of the taxable year (in the order of acquisition) to the extent thereof, and second, those acquired in the taxable year; and “(C) Treat those included in the opening inventory of the taxable year in which such method is first used as having been acquired at the same time and determine their cost by the average cost method. “(2) The method described in paragraph
(1)may be used—Restriction. “(A) Only in inventorying goods (required under subsection
(c)to be inventoried) specified in an application to use such method filed at such time and in such manner as the Commissioner may prescribe; and “(B) Only if the taxpayer establishes to the satisfaction of the Commissioner that the taxpayer has used no procedure other than that specified in subparagraphs
(B)and
(C)of paragraph
(1)in inventorying (to ascertain income, profit, or loss, for credit purposes, or for the purpose of reports to shareholders, partners, or other proprietors, or to beneficiaries) such goods for any period beginning with or during the first taxable year for which the method described in paragraph
(1)is to be used. “(3) The change to, and the use of, such method shall be in accordance Regulations as to change, etc. with such regulations as the Commissioner, with the approval of the Secretary, may prescribe as necessary in order that the use of such method may clearly reflect income. “(4) In determining income for the taxable year preceding the Inventory at cost. taxable year for which such method is first used, the closing inventory of such preceding year of the goods specified in such application shall be at cost. “(5) If a taxpayer, having complied with paragraph (2), uses Restriction on change of method. the method described in paragraph
(1)for any taxable year, then such method shall be used in all subsequent taxable years unless— “(A) With the approval of the Commissioner a change to a different method is authorized; or “(B) The Commissioner determines that the taxpayer has used for any period beginning with or during any subsequent taxable year some procedure other than that specified in subparagraph
(B)of paragraph
(1)in inventorying (for ascertaining income, profit, or loss, for credit purposes, or for the purpose of reports to shareholders, partners, or other proprietors, or to beneficiaries) the goods specified in the application, and requires a change to a method different from that prescribed in paragraph
(1)beginning with such subsequent taxable year or any taxable year thereafter. 53 Stat. 878 In either of the above cases, the change to, and the use of, the different method shall be in accordance with such regulations as the Commissioner, with the approval of the Secretary, may prescribe as necessary in order that the use of such method may clearly reflect income.” "
(b)Taxable years to which applicable. Taxable Years to Which Applicable.— The amendment made by subsection
(a)shall be applicable to taxable years beginning after December 31, 1938.
(c)Inventories in certain industries.[52 Stat. 459](/us/stat/52/459).[26 U. S. C., Supp. IV, § 22 (d)](/us/usc/t26/s22/d).*Ante*, p. 877.[I. R. C. § 22
(d)(1)](/us/irc/s22/d/1).*Ante*, p. 877.[I. R. C. § 22
(d)(2)](/us/irc/s22/d/2). Amendment to 1938 Act.— Section 22
(d)of the Revenue Act of 1938 (relating to inventories in certain industries) is amended to read as follows:" “(d) If the inventory method described in section 22
(d)(1), as amended, of the Internal Revenue Code is used for the first taxable year beginning after December 31, 1938, then, in determining income for the preceding taxable year, the closing inventory of such year of the goods specified in the application under section 22
(d)(2), as amended, of such Code shall be at cost.” " SEC. 220. COMPENSATION FOR SERVICES RENDERED FOR A PERIOD OF FIVE YEARS OR MORE.
(a)*Ante*, p. 36. The Internal Revenue Code is amended by inserting after section 106 the following new section:" “SEC. 107. COMPENSATION FOR SERVICES RENDERED FOR A PERIOD OF FIVE YEARS OR MORE. Cases where compensation is paid only on completion of services.Inclusion in gross income for any taxable year after 1938. “In the case of compensation
(a)received, for personal services rendered by an individual in his individual capacity, or as a member of a partnership, and covering a period of five calendar years or more from the beginning to the completion of such services,
(b)paid (or not less than 95 per centum of which is paid) only on completion of such services, and
(c)required to be included in gross income of such individual for any taxable year beginning after December 31, 1938, the tax attributable to such compensation shall not be greater than the aggregate of the taxes attributable to such compensation had it been received in equal portions in each of the years included in such period.” "
(b)Taxable years to which applicable. The amendment made by subsection
(a)shall be applicable to taxable years beginning after December 31, 1938. SEC. 221. EXTENSION OF TIME OF ORDERS OF SECURITIES AND EXCHANGE COMMISSION.
(a)Securities and Exchange Commission orders.*Ante*, p. 102.[I. R. C. § 373 (a)](/us/irc/s373/a). Section 373
(a)of the Internal Revenue Code (relating to the definition of orders of the Securities and Exchange Commission with respect to which Supplement R applies) is amended to read as follows:" “(a) Term defined.[49 Stat. 820](/us/stat/49/820).[15 U. S. C., Supp. IV, § 79k (b)](/us/usc/t15/s79k/b). The term ‘order of the Securities and Exchange Commission’ means an order
(1)issued after May 28, 1938, and prior to January 1, 1941, by the Securities and Exchange Commission to effectuate the provisions of section 11
(b)of the Public Utility Holding Company Act of 1935, 49 Stat. 820 (U. S. C., Supp. III, Title 15, § 79 (b)), or
(2)issued by the Commission subsequent to December 31, 1940, in which it is expressly stated that an order of the character specified in clause
(1)is amended or supplemented, and
(3)which has become final in accordance with law.” "
(b)Taxable years to which applicable. The amendment made by subsection
(a)shall be applicable to taxable years beginning after December 31, 1938. 53 Stat. 879 SEC. 222. RENEWAL OF INDEBTEDNESS.
(a)Section 27
(4)of the Internal Revenue Code (relating Renewal of indebtedness.*Ante*, p. 20.[I. R. C. § 27
(a)(4)](/us/irc/s27/a/4). to corporation credit for amounts used or set aside to pay indebtedness) is amended by inserting at the end thereof the following new sentence: “A renewal (however evidenced) of an indebtedness shall be considered an indebtedness.”
(b)The amendment made by subsection
(a)shall be applicable Taxable years to which applicable. to taxable years beginning after December 31, 1938.
(c)Section 27
(4)of the Revenue Act of 1938 (relating to Renewal of indebtedness.[52 Stat. 468](/us/stat/52/468). corporation credit for amounts used or set aside to pay indebtedness) is amended by inserting at the end thereof the following new sentence: “A renewal (however evidenced) of an indebtedness shall be considered an indebtedness.”
(d)The amendment made by subsection
(c)shall be applicable Taxable years to which applicable. to taxable years beginning after December 31, 1937. SEC. 223. COMMODITY CREDIT LOANS.
(a)The Internal Revenue Code is amended by inserting after *Ante*, pp. 56, 867. section 121 the following new section:" “SEC. 123. COMMODITY CREDIT LOANS. “(a) Amounts received as loans from the Commodity Credit Corporation Commodity credit loans; treatment of. shall, at the election of the taxpayer, be considered as income and shall be included in gross income for the taxable year in which received. “(b) If a taxpayer exercises the election provided for in subsection Restriction as to change of method.
(a)for any taxable year beginning after December 31, 1938, then the method of computing income so adopted shall be adhered to with respect to all subsequent taxable years unless with the approval of the Commissioner a change to a different method is authorized.” "
(b)Adjustment of Basis.— Section 113
(1)of the Internal *Ante*, p. 44.[I. R. C. § 113
(b)(1)](/us/irc/s113/b/1). Revenue Code is amended by adding at the end thereof a new subparagraph reading as follows:" “(G) in the case of property pledged to the Commodity Adjustment of basis. Credit Corporation, to the extent of the amount received as a loan from the Commodity Credit Corporation and treated by the taxpayer as income for the year in which received pursuant to section 123 of this chapter, and to the extent of any deficiency on such loan with respect to which the taxpayer has been relieved from liability.” "
(c)The amendments made by subsections
(a)and
(b)shall be Taxable years to which applicable. applicable to taxable years beginning after December 31, 1938.
(d)Retroactive Application.— The provisions of subsection
(a)Retroactive application.[48 Stat. 680](/us/stat/48/680); [49 Stat. 1648](/us/stat/49/1648); [52 Stat. 447](/us/stat/52/447). shall be retroactively applied in computing income for any taxable year subject to the provisions of the Revenue Act of 1934, the Revenue Act of 1936, or the Revenue Act of 1938, or any of such Acts as amended, if—
(1)The taxpayer elects in writing (in accordance with regulations prescribed by the Commissioner with the approval of the Secretary) within one year from the date of the enactment of this Act to treat such loans as income for such year, and
(2)The records of the taxpayer are sufficient to permit an accurate computation of income for such year, and
(3)The taxpayer consents in writing to the assessment, within such period as may be agreed upon, of any deficiency for such year, even though the statutory period for the assessment of any such deficiency had expired prior to the filing of such consent. 53 Stat. 880 Credit for overpaid tax. Any tax overpaid for any such, year shall be credited or refunded, Subject to the statutory period of limitation properly applicable thereto.
(e)Adjustment of basis for prior years.[48 Stat. 680](/us/stat/48/680); [49 Stat. 1648](/us/stat/49/1648); [52 Stat. 447](/us/stat/52/447). Adjustment of Basis for Prior Years.— In computing income for any taxable year subject to the provisions of the Revenue Act of 1934, the Revenue Act of 1936, or the Revenue Act of 1938, or any of such Acts as amended, the basis, for determining gain or loss from the sale or other disposition of any property, pledged to the Commodity Credit Corporation as security on a loan obtained therefrom, shall be adjusted for the amount of such loan to the extent it was considered as income and included in gross income for the year in which received, and for the amount of any deficiency on such loan with respect to which the taxpayer was relieved from liability. SEC. 224. CHARITABLE CONTRIBUTIONS TO POSSESSIONS AND CHARITIES IN POSSESSIONS.
(a)Charitable deductions of taxpayers other than corporations.*Ante*, p. 14.[I. R. C. § 23
(1)(2)](/us/irc/s23/o/1). Charitable Deductions of Taxpayers Other Than Corporations.— Section 23
(1)and
(2)of the Internal Revenue Code are amended to read as follows:" “(1) For public purposes. The United States, any State, Territory, or any political subdivison thereof or the District of Columbia, or any possession of the United States, for exclusively public purposes; “(2) For religious, charitable, etc., purposes. A corporation, trust, or community chest, fund, or foundation, created or organized in the United States or in any possession thereof or under the law of the United States or of any State or Territory or of any possession of the United States, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation;”. "
(b)*Ante*, p. 15.[I. R. C. § 23 (q)](/us/irc/s23/q). Charitable Deduction of Corporations.— Section 23
(q)of the Internal Revenue Code is amended to read as follows:" “(q) Deductions allowed.Verification. Charitable and Other Contributions by Corporations.— In the case of a corporation, contributions or gifts payment of which is made within the taxable year to or for the use of a corporation, trust, or community chest, fund, or foundation, created or organized in the United States or in any possession thereof or under the law of the United States, or of any State or Territory, or of the District of Columbia, or of any possession of the United States, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children (but in the case of contributions or gifts to a trust, chest, fund, or foundation, only if such contributions or gifts are to be used within the United States or any of its possessions exclusively for such purposes), no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation; to an amount which does not exceed 5 per centum of the taxpayer’s net income as computed without the benefit of this subsection. Such contributions or gifts shall be allowable as deductions only if verified under rules and regulations prescribed by the Commissioner, with the approval of the Secretary.” " SEC. 225. PAN-AMERICAN TRADE CORPORATIONS. *Ante*, p. 66. The Internal Revenue Code is amended by inserting after section 151 the following new section:53 Stat. 881 " “SEC. 152. PAN-AMERICAN TRADE CORPORATIONS. “If a domestic corporation engaged in the active conduct of a trade Benefits to domestic corporations in active conduct of Pan-American trade.*Ante*, pp. 58, 866.[I. R. C. § 141](/us/irc/s141). or business within the United States (hereinafter referred to as the ‘parent corporation’) owns directly 100 per centum of the capital stock of one or more domestic corporations each of which is engaged solely in the active conduct of a trade or business in Central or South America (hereinafter referred to as a Pan-American trade corporation), such corporations (including the ‘parent corporation’) shall be deemed to be an affiliated group of corporations within the meaning of section 141 of this chapter, provided that the following conditions are satisfied:" “(1) At least 80 per centum of the gross income for the taxable Conditions. year of the parent corporation is derived from sources other than royalties, rents, dividends, interest, annuities, and gains from the sale or exchange of stock or securities; and “(2) At least 90 per centum of the gross income for the taxable year of each of the Pan-American trade corporations is derived from sources other than royalties, rents, dividends, interest, annuities, and gains from the sale or exchange of stock or securities; and “(3) No part of the gross income for the taxable year of any of the Pan-American trade corporations is derived from sources within the United States.” " " SEC. 226. DEDUCTIONS OF INSURANCE COMPANIES OTHER THAN LIFE OR MUTUAL.
(a)Section 204
(10)of the Internal Revenue Code is amended Deductions allowed.*Ante*, p. 74.[I. R. C. § 204
(c)(10)](/us/irc/s204/c/10). to read as follows:" “(10) Deductions (other than those specified in this subsection) as provided in section 23.” *Ante*, pp. 12, 867, 880.[I. R. C. § 23](/us/irc/s23). "
(b)The amendment made by subsection
(a)shall be applicable to Taxable years to which applicable. taxable years beginning after December 31, 1938. SEC. 227. DEFINITION OF GROSS INCOME OF CERTAIN INSURANCE COMPANIES FOR PERSONAL HOLDING COMPANY TAX.
(a)Section 507 of the Internal Revenue Code is amended to read *Ante*, p. 111.[I. R. C. § 507](/us/irc/s507). as follows:" “SEC. 507. MEANING OF TERMS USED. “(a) General Rule.— The terms used in this subchapter shall have General rule. the same meaning as when used in chapter 1. “(b) Insurance Companies Other Than Life or Mutual.— Notwithstanding “Gross income.”*Ante*, pp. 73, 74.[I. R. C. §§ 204
(6)(7), 204
(c)(7)](/us/irc/s204/b/1/6/7/204/c/7). subsection (a), the term ‘gross income’, as used in this subchapter, means, in the case of an insurance company other than life or mutual, the gross income, as defined in section 204
(b)(1), increased by the amount of losses incurred, as defined in section 204
(b)(6), and the amount of expenses incurred, as defined in section 204
(b)(7), and decreased by the amount deductible under section 204
(7)(relating to tax-free interest).” "
(b)Taxable Years to Which Applicable.— The amendments Taxable years to which applicable. made by this section shall be applicable to taxable years beginning after December 31, 1938. SEC. 228. COMPUTATION OF DIVIDEND CARRY-OVER FOR PERSONAL-HOLDING COMPANY TAX.
(a)Section 504
(a)of the Internal Revenue Code is amended by Computation; allowance.*Ante*, p. 107.[I. R. C. § 504 (a)](/us/irc/s504/a). inserting before the semicolon at the end thereof a comma and the following: “and, in the computation of the dividend carry-over for 53 Stat. 882 the purposes of this subchapter, the term ‘adjusted net income’ as *Ante*, p. 20.[I. R. C. § 27 (c)](/us/irc/s27/c).*Ante*, p. 108.[I. R. C. § 505
(a)(1)](/us/irc/s505/a/1).Taxable years to which applicable. used in section 27
(c)means the adjusted net income minus the deduction allowed for Federal taxes under section 505
(a)(1)”.
(b)The amendment made by subsection
(a)shall be applicable to taxable years beginning after December 31, 1938. SEC. 229. TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE. Taxable years to which amendments applicable.*Ante*, pp. 867, 870, 872, 875, 876, 877, 878, 879, 881. Except the amendments made by sections 211, 213, 214, 215, 217, 219, 220, 221, 222, 223, 226, 227, and 228, the amendments made by this title to the Internal Revenue Code shall be applicable only with respect to taxable years beginning after December 31, 1939. TITLE III— CAPITAL STOCK AND EXCESS PROFITS TAXES SEC. 301. DECLARATION OF VALUE FOR CAPITAL STOCK PURPOSES, 1939 AND 1940. Declaration of value.*Ante*, p. 169.[I. R. C. § 1202](/us/irc/s1202). Section 1202 of the Internal Revenue Code (relating to declaration of capital stock value) is amended by inserting at the end thereof the following new subsection:" “(e) Additional declaration years. Additional Declaration Years.— In the case of any domestic corporation, the year ending June 30, 1939, and the year ending June 30, 1940, shall each, if not otherwise a declaration year, constitute an additional declaration year if with respect to such year
(1)the taxpayer so elects (which election cannot be changed) in its return filed before the expiration of the statutory filing period or any authorized extension thereof, and
(2)the value declared by the taxpayer is in excess of the adjusted declared value computed under paragraph
(1)of subsection (b). If, under this subsection, the year ending June 30, 1939, is a declaration year, the computation, under paragraph
(1)of subsection (b), of the adjusted declared value for the year ending June 30, 1940, shall be made on the basis of the value declared for the year ending June 30, 1939.” " TITLE IV— MISCELLANEOUS AMENDMENTS SEC. 401. TAX LIENS ON SECURITIES. Tax liens on securities.*Ante*, p. 449.[I. R. C. § 3672](/us/irc/s3672). Section 3672 of the Internal Revenue Code is amended to read as follows:" “SEC. 3672. VALIDITY AGAINST MORTGAGEES, PLEDGEES, PURCHASERS, AND JUDGMENT CREDITORS. “(a) Invalidity of lien without notice. Invalidity of Lien Without Notice.— Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector— “(1) Under state or territorial laws.— In accordance with the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law provided for the filing of such notice; or “(2) With clerk of district court.— In the office of the clerk of the United States district court for the judicial district in which the property subject to the lien is situated, whenever the State or Territory has not by law provided for the filing of such notice; or “(3) With clerk of District Court of the United States for the District of Columbia.— In the office of the clerk of the 53 Stat. 883 District Court of the United States for the District of Columbia, if the property subject to the lien is situated in the District of Columbia. “(b)
(1)Exception in case of securities.— Even though notice Exception in case of securities.*Ante*, p. 448.[I. R. C. § 3670](/us/irc/s3670).[R. S. § 3186](/us/rs/s3186).*Ante*, pp. 448–450.[I. R. C. §§ 3670–3677](/us/irc/s3670–3677). of a lien provided in section 3670 has been filed in the manner prescribed in subsection
(a)of this section, or notice of a lien provided in section 3186 of the Revised Statutes, as amended, has been filed in the manner prescribed in such section or subsection
(a)of this section, the lien shall not be valid with respect to a security, as defined in paragraph
(2)of this subsection, as against any mortgagee, pledgee, or purchaser, of such security, for an adequate and full consideration in money or money’s worth, if at the time of such mortgage, pledge, or purchase such mortgagee, pledgee, or purchaser is without notice or knowledge of the existence of such lien. “(2) Definition of security.— As used in this subsection the term “Security” defined. ‘security’ means any bond, debenture, note, or certificate, or other evidence of indebtedness, issued by any corporation (including one issued by a government or political subdivision thereof), with interest coupons or in registered form, share of stock, voting trust certificate, or any certificate of interest or participation in, certificate of deposit or receipt for, temporary or interim certificate for, or warrant or right to subscribe to or purchase, any of the foregoing; negotiable instrument; or money. “(3) Applicability of subsection.— Except where the lien has Applicability of subsection. been enforced by a proceeding, suit, or civil action which has become final before the date of enactment of the Revenue Act of 1939, this subsection shall apply regardless of the time when the mortgage, pledge, or purchase was made or the lien arose.” " SEC. 402. TAX ON TRANSFERS OF WORTHLESS SECURITIES BY EXECUTOR, ETC. Section 1802
(b)of the Internal Revenue Code (relating to the Transfers of worthless securities by executor, etc.*Ante*, p. 196.[I. R. C. § 1802 (b)](/us/irc/s1802/b). tax on transfers of capital stock and similar interests) is amended by inserting at the end thereof the following new paragraph:" “The tax imposed by this subsection shall not be imposed upon any delivery or transfer by an executor or administrator to a legatee, heir, or distributee of shares or certificates of stock if it is shown to the satisfaction of the Commissioner that the value of such shares or certificates is not greater than the amount of the tax that would otherwise be imposed on such delivery or transfer.” " SEC. 403. CREDITS AGAINST ESTATE TAX OF TAX PAID TO POSSESSIONS.
(a)Section 813
(b)of the Internal Revenue Code (relating to the Credit against estate tax of tax paid to possessions.*Ante*, p. 125.[I. R. C. § 813 (b)](/us/irc/s813/b). 80 per centum credit for estate, legacy, succession, and inheritance taxes paid) is amended by inserting after “District of Columbia,” the following: “or any possession of the United States,”.
(b)The amendment made by subsection
(a)shall be applicable Applicability. only with respect to estates of decedents dying after the date of the enactment of this Act. SEC. 404. RETURNS BY ATTORNEYS AS TO FOREIGN CORPORATIONS. Effective as of the date of the enactment of the Internal Revenue Returns by attorneys as to foreign corporations.*Ante*, p. 436.[I. R. C. § 3604](/us/irc/s3604). Code, section 3604 of such Code is amended by striking out “Nothing in this section shall be construed to require the divulging of privileged communications between attorney and client.” and inserting in lieu thereof “Nothing in this section shall be construed to require the 53 Stat. 884 filing by an attorney-at-law of a return with respect to any advice given or information obtained through the relationship of attorney and client.” SEC. 405. FILING OF CLAIMS FOR REFUND OF AMOUNTS COLLECTED UNDER THE AGRICULTURAL ADJUSTMENT ACT. Filing of claims, expiration of time.[49 Stat. 1747](/us/stat/49/1747). Section 903 of the Revenue Act of 1936 (relating to expiration of time for filing claims for refund of amounts paid under the Agricultural Adjustment Act) is amended by striking out “July 1, 1937” and inserting in lieu thereof “January 1, 1940”. SEC. 406. INSOLVENT BANKS.
(a)Insolvent banks.*Ante*, p. 470.[I. R. C. § 3798 (c)](/us/irc/s3798/c). Section 3798
(c)of the Internal Revenue Code is amended to read as follows:" “(c)
(1)Erroneous collections. Any such tax collected, whether collected before, on, or after the date of enactment of the Revenue Act of 1938, shall be deemed to be erroneously collected, and shall be refunded subject to all provisions and limitations of law, so far as applicable, relating to the refunding of taxes. “(2) Assessment, etc., barred under subsection (a), etc.*Ante*, p. 470. Any tax, the assessment, collection, or payment of which is barred under subsection
(a)of this section, or any such tax which has been abated or remitted after May 28, 1938, shall be assessed or reassessed whenever it shall appear that payment of the tax will not diminish the assets as aforesaid. “(3) Barred under subsection (b).*Ante*, p. 470. Any tax, the assessment, collection, or payment of which is barred under subsection
(b)of this section or any such tax which has been refunded after May 28, 1938, shall be assessed or reassessed after full payment of such claims of depositors to the extent of the remaining assets segregated or transferred as described in subsection (b). “(4) Suspension of statute of limitations on making of assessment, etc. The running of the statute of limitations on the making of assessment and collection shall be suspended, during, and for ninety days beyond, the period for which, pursuant to this section, assessment or collection may not be made, and a tax may be reassessed as provided in paragraphs
(2)and
(3)of this subsection, and collected, during the time within which, had there been no abatement, collection might have been made.” "
(b)“Agent” defined.*Ante*, p. 470.[I. R. C. § 3798 (b)](/us/irc/s3798/b). The term “agent” as used in 3798
(b)of the Internal Revenue Code shall be deemed to include a corporation acting as a liquidating agent.
(c)Effective date of amendments.[52 Stat. 447](/us/stat/52/447). The amendments made by this section shall be effective as of the date of enactment of the Revenue Act of 1938. SEC. 407. SALE OF INFORMATION DERIVED FROM INCOME TAX RETURNS. Sale of information derived from income tax returns.*Ante*, p. 65.[I. R. C. § 148 (f)](/us/irc/s148/f).Penalty.*Proviso*.Exceptions. Section 148
(f)of the Internal Revenue Code is amended by adding at the end thereof the following new sentence: “It shall be unlawful for any person to sell, offer for sale, or circulate, for any consideration whatsoever, any copy or reproduction of any list, or part thereof, authorized to be made public by this Act or by any prior Act relating to the publication of information derived from income-tax returns; and any offense against the foregoing provision shall be a misdemeanor and be punished by a fine not exceeding $1,000 or by imprisonment not exceeding one year, or both, at the discretion of the court: *Provided*, That nothing in this sentence shall be construed to be applicable with respect to any newspaper, or other periodical publication, entitled to admission to the mails as second-class mail matter. ” 53 Stat. 885 SEC. 408. EXEMPTION FROM INTERNAL REVENUE TAX OF ARTICLES BROUGHT INTO GUAM OR AMERICAN SAMOA. Section 3361
(b)of the Internal Revenue Code is amended by Guam and American Samoa, exemption of tax, etc.*Ante*, p. 406.[I. R. C. § 3361 (b)](/us/irc/s3361/b). adding a comma and the words “Guam, and American Samoa” after the words “Puerto Rico”. Approved, June 29, 1939, 10 p. m. E. S. T. Making appropriations for the Departments of State and Justice and for the Judiciary, and for the Department of Commerce, for the fiscal year ending June 30, 1940, and for other purposes. Chapter 248 53 Stat. 885 1939-06-29 United States Government Publishing Office text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. Digitization Vendor 2024-11-24 76 1 public [CHAPTER 248] AN ACT Making appropriations for the Departments of State and Justice and for the Judiciary, and for the Department of Commerce, for the fiscal year ending June 30, 1940, and for other purposes. June 29, 1939[[H. R. 6392](/us/bill/76/hr/6392)][
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  • 17 Stat. 545
  • 38 Stat. 768
  • 24 USC 279
  • 52 Stat. 667
  • 24 USC 280
  • 24 USC 280a
  • 53 Stat. 858
  • 48 Stat. 461
  • 48 USC 1237
  • 53 Stat. 859
  • 41 Stat. 785
  • 10 USC 535
  • 53 Stat. 860
  • 52 Stat. 1216
  • 50 Stat. 881
  • 52 Stat. 1220
  • 49 Stat. 1508
  • 49 Stat. 1511
  • 52 Stat. 403
  • 49 Stat. 1038
  • 50 Stat. 731
  • 53 Stat. 861
  • 5 USC 793
  • 53 Stat. 862
  • 53 Stat. 863
  • 53 Stat. 864
  • 53 Stat. 865
  • 53 Stat. 866
  • 53 Stat. 867
  • 53 Stat. 868
  • 53 Stat. 869
  • 53 Stat. 870
  • 53 Stat. 871
  • 52 Stat. 485
  • 43 Stat. 256
  • 52 Stat. 488
  • 43 Stat. 257
  • 52 Stat. 489
  • 49 Stat. 1681
  • 48 Stat. 705
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U.S.C.§ 5
Pub. L.Public Law 114-265
Stat.Chapter 183
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