Act of 1918.

quired to retain it at its source, fraudulent and for the purpose
nor shall any penalty be imposed of evading payment.
or collected in such cases from
the taxpayer, or such withhold-
ing agent whose duty it was to
retain it, for failure to return or
pay the same, unless such failure
was fraudulent and for the pur-
pose of evading payment.

Act of 1913.

Act of 1921.

TITLE III.-WAR-PROFITS
AND EXCESS-PROFITS TAX
FOR 1921.

TITLE II.-WAR EXCESS
PROFITS TAX

SEC. 200. That when used in

TITLE III.-WAR-PROFITS AND EXCESS-PROFITS TAX PART I.-GENERAL DEFINITIONS. PART I.-GENERAL DEFINITIONS. SEC. 300. That when used in SEC. 300. That when used in this title the terms "taxable this title the terms "taxable this titleyear," "fiscal year," "personal year," "fiscal year," "personal The term "corporation" inservice corporation," "paid or service corporation," "paid or cludes joint-stock companies or accrued," and "dividends" accrued," and "dividends" associations and insurance com

shall have the same meaning as provided for the purposes of income tax in sections 200378 and 201.378

378 Sec. 200, p. 6; Sec. 201, p. 10.

shall have the same meaning as
provided for the purposes of in-
come tax in sections 200378 and
201.378 The first taxable year for
the purposes of this title shall
be the same as the first taxable
year for the purposes of the in-
come tax under Title II.

panies;

The term "domestic' means created under the law of the United States, or of any State, Territory, or District thereof, and the term "foreign" means created under the law of any other possession of the United States or of any foreign country or government;

The term "United States" means only the States, the Territories of Alaska and Hawaii, and the District of Columbia;

The term "taxable year" means the twelve months ending December thirty-first, excepting in the case of a corporation or partnership which has fixed its own fiscal year, in which case it means such fiscal year. The first taxable year shall be the year ending December thirty-first, nineteen hundred and seventeen, except that in the case of a corporation or partnership which has fixed its own fiscal year, it shall be the fiscal year ending during the calendar year nineteen hundred and seventeen. If a corporation or partnership, prior to March first, nineteen hundred and eighteen, makes a return covering its own fiscal year, and includes therein the income received during that part of the fiscal year falling within the calendar year nineteen hundred and sixteen, the tax for such taxable year shall be that proportion of the tax computed upon the net income during such full fiscal year which the time from January first, nineteen hundred and seventeen, to the end of such fiscal year bears to the full fiscal year; and

379 Part III, Title III, Act of 1918.

Act of 1921.

PART II.-IMPOSITION OF TAX.

SEC. 301. (a) That in lieu of the tax imposed by Title III of the Revenue Act of 1918, but in addition to the other taxes imposed by this Act, there shall be levied, collected and paid for the calendar year 1921 upon the net income of every corporation (except corporations taxable under subdivision (b) of this section) a tax equal to the sum of the following:

FIRST BRACKET.

SEC. 310.379 That as used in The term "prewar period" this title the term "prewar pe- means the calendar years nineriod" means the calendar years teen hundred and eleven, nine1911, 1912, and 1913, or, if a teen hundred and twelve, and corporation was not in existence nineteen hundred and thirteen, during the whole of such period, or, if a corporation or partnerthen as many of such years dur- ship was not in existence or an ing the whole of which the cor- individual was not engaged in a poration was in existence. trade or business during the whole of such period, then as many of such years during the whole of which the corporation or partnership was in existence or the individual was engaged in the trade or business.

PART II.-IMPOSITION OF TAX.

SEC. 301. (a) That in lieu of the tax imposed by Title II of the Revenue Act of 1917, but in addition to the other taxes imposed by this Act, there shall be levied, collected, and paid for the taxable year 1918 upon the net income of every corporation a tax equal to the sum of the following:

FIRST BRACKET.

30 per centum of the amount

The terms "trade" and "business" include professions and occupations.

The term "net income" means in the case of a foreign corporation or partnership or a nonresident alien individual, the net income received from sources within the United States.

SEC. 201. [1] That in addition to the taxes under existing law and under this act there shall be levied, assessed, collected, and paid for each taxable year upon the income of every corporation,380 partnership,381 or individual, a tax (hereinafter in this title referred to as the tax) equal to the following percentages of the net income:

20 per centum of the amount Twenty per centum of the of the net income in excess of of the net income in excess of amount of the net income in exthe excess-profits credit (deter- the excess-profits credits (deter- cess of the deduction382 (deter

380 A corporation organized under the laws of one of the United States, doing business in and deriving its income from Porto Rico, could not invoke a supposed immunity from federal taxation granted by the Bill of Rights of Porto Rico, so as to defeat the income and excess profits tax imposed by the Acts of 1917 and 1918, merely because it derived its income from Porto Rico. Porto Rico Coal Co. v. Edwards (Col.), (D. C., S. D. N. Y. 1921) 275 Fed. 104.

381 (a) Under a partnership agreement one of the partners was entitled to 60% of the gross receipts derived from acting as selling agent for a number of mills. On May 1, 1917, prior to the enactment of the Act of 1917, the agreement was modified as follows: The partner relinquished his right to the 60% of the gross receipts in consideration that the partnership act as selling agent for three of the mills without compensation. The partner then contracted personally with the three mills and was paid directly by them, the partnership not receiving or being entitled to any part

of these commissions. The commissions received by the partner directly from the three mills was not income of the partnership and not taxable to it under Sec. 201 of the Act of 1917. Leslie et al. v. Bowers (Col.), (D. C., S. D. N. Y. 1923) 293 Fed. 822.

381 (b) Income from a single timberland deal received by a partnership engaged in the business of buying, selling and dealing in timber, lumber and other forest products, is a part of its taxable income under the Act of 1917. Cartier, et al. v. Doyle (Col.), (D. C., W. D. Wash., N. D. 1920) 269 Fed. 647.

382 (a) Under Sec. 201 of the Act of 1917, the credit is not deductible from the total net income, which would exempt an amount of net income equal to the credit from the highest rate or rates of war excess profits tax. It is deductible from that portion of the net income to which the twenty per cent rate applies. Greenport Basin and Con. Co. et al. v. U. S., (1923) 260 U. S. 512, affirming Id., (D. C., E. D. N. Y. 1920) 269 Fed. 58; Ehret Magnesia Mfg. Co.

mined under section 312) 383 and mined as hereinafter provided)
not in excess of 20 per centum and not in excess of fifteen per
of the invested capital;
centum of the invested capital
for the taxable year;

port Basin & Con. Co. et al. v. U. S., (D. C., E. D. N. Y. 1920) 269 Fed. 58; Ehret Magnesia Mfg. Co. v. Lederer (Col.), (D. C., E. D. Penn. 1921) 273 Fed. 689.

383 Sec. 311, p. 324; Sec. 312, p. 327.