Sec, 24. TIME AND PLACE OF FILING RETURNS AND PAYMENTS OF TAX DUE.) Returns shall be in such form as the tax commissioner may from time to time prescribe, and shall be filed with the tax commissioner at his office in Bismarck, North Dakota. Returns shall be made on or before the fifteenth day of the third month following the close of the fiscal year, or if the return is made on the basis of the calendar year, then the return shall be made on or before the fifteenth day of March. The tax commissioner may grant reasonable extensions of time for filing reports, when in his judgment good cause exists. There shall be annexed to the return an affidavit or affirmation of the taxpayer making the return to the effect that the statements contained therein are true. The tax commissioner shall prepare blank forms for said returns and shall cause them to be distributed throughout the state, but failure to receive or secure a form shall not relieve the taxpayer from making a return. The taxpayer shall compute the amount of tax due under his return and shall attach thereto a check, draft or money order, payable to the state treasurer, Bismarck, North Dakota, for the amount of tax as so computed. Provided that the payments may be made in quarterly installments, and if paid in installments the first installment shall be paid at the time fixed by law for filing the return; the second installment shall be paid on the fifteenth day of the third month; the third installment, on the fifteenth day of the sixth month; and the fourth installment on the fifteenth day of the ninth month after the time fixed by law for filing the return. Sec. 25. FAILURE TO FILE RETURNS: UNDER STATEMENT IN RETURNS.) If the tax commissioner shall be of the opinion that any taxpayer has failed to file a return, or to include in a return filed, either intentionally or through error, items of taxable income, he may require from such taxpayer a return, or supplementary return, under oath, in such form as he shall prescribe of all the items of income which the taxpayer received during the year for which the return is made, whether or not taxable under the provisions of this act. If from a supplementary return, or otherwise, the tax commissioner finds that any items of income, taxable under this act, have been omitted from the original return, he may require the items so omitted to be disclosed to him under oath of the taxpayer and to be added to the original return. Such supplementary return and the correction of the original return shall not relieve the taxpayer from any of the penalties to which he may be liable under any provisions of this act. Article VI. Imposition of Tax on Corporations. Sec. 26. There shall be levied, collected and paid for the year ending December 31, 1923, and annually thereafter, upon the net income of every domestic and every foreign corporation received from such sources as are described in Article II, Sections 7 and 8, a tax equivalent to three per cent (3%) of such net income. Sec. 27. CONDITIONAL AND OTHER EXEMPTIONS.) The following organizations shall be exempt from taxation under this act: 1. Labor, agricultural or horticultural organizations. 2. Mutual savings banks not having a capital stock represented by shares. 3. Fraternal beneficiary societies, orders or associations; (a) Operating under the lodge system or for the exclusive benefit of the members of the fraternity itself operating under the lodge system, and (b) providing for the payment of life, sick, accident, or other benefits, to the members of such society, order or association, or their dependents. 4. Domestic building and loan associations operated for mutual purposes, except Building and Loan Associations which receive savings deposits. 5. Cemetery companies owned and operated exclusively for the benefit of their members. 6 Corporations organized and operating exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inure to the benefit of any private stockholder or individual. 7. Business leagues, commercial clubs, not organized for profit, and no part of the net income of which inures to the benefit of any private stockholder or individual. 8. Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare. 9. Clubs organized and operated exclusively for pleasure, recreation and other non-profitable purposes, no part of the net earnings of which inures to the benefit of any private stockholder or member. 10. Farmers, or other mutual hail, cyclone, or fire insurance companies, mutual ditch or irrigation companies, mutual or co-operative telephone companies or like organizations of a purely local character, the income of which consists solely of assessment dues, and fees collected from members for the sole purpose of meeting expenses. 11. Farmers' potato growers' or like associations, organized and operated as sales agents for the purpose of marketing the products of mambers and turning back to them the proceeds of sale, less the necessary expenses, on the basis of the quantity of produce furnished by them. 12. Corporations organized for the exclusive purpose of holding title to property, collecting income therefrom and turning over the entire amount thereof, less expenses, to an organization which is itself exempt from the tax imposed by this act. 13. Insurance companies doing business in the state and paying a tax upon the gross amount of premiums received in the state. Article VII. Computation of Tax On Corporations. Sec. 28. NET INCOME DEFINED.) The words "net income" mean the gross income of a corporation less the deductions allowed by this act. Sec. 29. GROSS INCOME DEFINED.) The words "gross income" mean the gross income as defined in Article IV, Section 17; except that, in the case of life insurance companies there shall not be included in gross income such portion of any actual premium received from any individual policy holder as is paid back or credited to or treated as an abatement of premium of such policyholder within the taxable year. Sec. 30. BASIS OF THE RETURN OF NET INCOME.) 1. Taxpayers who customarily estimate their net income on a basis other than that of actual cash receipts and disbursements may, with the approval of the tax commissioner, return their net income under this act upon a similar basis. Taxpayers who customarily estimate their income on the basis of an established fiscal year instead of on that of the calendar year, may, with the approval of the tax commissioner and under such regulations as he may establish, return their net income under this act on the basis of such fiscal year, in lieu of the calendar year. 2. A taxpayer may, with the approval of the tax commissioner and under such regulations as he may prescribe, change his income year from fiscal to calendar year, or otherwise, in which case his net income shall be computed on the basis of such new income year. Sec. 31. DEDUCTIONS.) shall be allowed as deductions: In computing net income, there 1. All the ordinary and necessary expenses paid during the income year in the carrying on of any trade or business including a reasonable allowance for salaries or other compensation for personal services actually rendered, and including rentals or other payments required to be made as a condition to the continued use or possession for the purpose of the trade or business of property to which the taxpayer has not taken or is not taking title, or in which he has no equity. 2. All interest paid during the income year on indebtedness incurred in connection with the trade or business. 3. Taxes paid within the income year, including taxes paid by banks on behalf of their stockholders upon their shares of stock, but not including those assessed against local benefits tending to increase the value of the property assessed. Federal Income taxes shall be deducted only to the extent that such taxes represent a tax paid on income taxable under this act. 4, Losses sustained during the income year that are not compensated for by insurance or otherwise. 5. Debts ascertained to be worthless and charged off during the taxable year, but no debts shall be deducted unless they have previously been included as income in a return under this act. 6. DEPRECIATION.) A reasonable allowance for depreciation by use, wear and tear of property used in a trade or business; and in the case of mines, oil, and gas wells and other natural deposits, a reasonable allowance for depletion. 7. Dividends or income received from stock or interest in any corporation, the income of which shall have been assessed and taxed under the provisions of this act, provided that when only part of the income of any corporation shall have been assessed under this act, only a corresponding part of the dividends or income received therefrom shall be deducted. 8. Amounts distributed by co-operative companies to patrons, stockholders and non-stockholders alike, on a strictly patronage basis. 9. In the case of taxpayers who keep regular books of account upon an accounting basis and in accordance with standard accounting practices, reserves for bad debts and for contingent liabilities under such rules and restrictions as the tax commissioner may impose. If the tax commissioner shall, at any time, deem the reserve excessive in amount, he may restore such excess to income either in a subsequent year or as a part of the income of the income year, and assess it accordingly. 10. In the case of insurance companies, in addition to the above; (a) The net additions required by law to be made within the taxable year to reserve funds; and (b) the sums other than dividends paid within the taxable year on policy and annuity contracts. Article VIII. Corporation Returns. Sec. 32. Every corporation subject to taxation shall make a return under oath, stating specifically the items of gross income, the deductions and such other facts as the tax commissioner may require for the purpose of making any computation required by this act. Provided, that any foreign loan and investment company engaged in business in the state, and whose income in the state consists solely of income exempt from taxation under this act, need not file an annual report unless specially requested to do by the tax commissioner, but may file in lieu thereof an affidavit claiming exemption under this act. Sec. 33. TIME AND PLACE FOR FILING RETURNS.) Returns shall be in such form as the tax commissioner may, from time to time prescribe, and shall be filed with the tax commissioner at Bismarck, North Dakota. Returns shall be made on or before the fifteenth day of the third month following the close of the fiscal year, or if the return is made on a basis of the calendar year then the return shall be made on or before the fifteenth day of March. The tax commissioner shall prepare blank forms and have them distributed throughout the state, but failure to receive blanks shall not relieve any taxpayer from the obligation of making any return as herein required. Sec. 34. FAILURE TO FILE RETURNS. UNDERSTATEMENT IN RETURNS.) If the tax commissioner shall be of the opinion that any taxpayer has failed to file a return, or to include in a return filed either intentionally or through error, items of taxable income, he may require from such taxpayer a return, or supplementary return, under oath, in such form as he shall prescribe, of all the items of income which the taxpayer received during the year for which the return is made, whether or not taxable under the provisions of this act. If from a supplementary return or otherwise the tax commissioner finds that any items of income, taxable under this act, have been omitted from the original return, he may require the items so omitted to be disclosed to him under oath of the taxpayer and to be added to the original return. Such supplementary return and the correction of the original return shall not relieve the taxpayer from any of the penalties to which he may be liable, under the provisions of this act. Collection of Tax. Article IX. Additional and Delinquent Taxes. Sec. 35. The tax appearing on the face of the return shall be paid at the same time the report is filed. The taxpayer shall |