Corporation with a stock worth only $10,000 and with only $1,000 invested in its business in this country would be required to make a Return. The tax is at the rate of 50c for each $1,000 of the average amount of capital actually invested in the transaction of business in the United States during the preceding year. An exemption is allowed, equal to such proportion of $99,000 as the amount invested in business in this country bears to the total amount invested in the business, but this exemption is allowed only in case the corporation files a Return showing the capital invested in its business both in this country and elsewhere. The Return does not provide for a method of valuation, as in the case of domestic corporations, but shows merely the value of the property used in the business in this country and in other countries. Investments in this country not used in the transaction of the business, such as holdings of bonds, need not to be included in the amount of capital upon which the tax is computed. Foreign insurance companies are not to include in the capital invested in the transaction of business, such amounts as they are required to keep on deposit with the state authorities where they are doing business, or other reserves required by law or contract. If the amount invested in this country has changed during the preceding year, the Return should show the condition both before and after the change in such a way that an average can be computed. A change made during the taxable year, even if at the very beginning, does not affect the amount of the tax, which is measured by the amount invested during the preceding year only. A change in the investments in other countries made during the preceding year would, of course, affect the amount of exemption to be allowed. While the law is open to question and the regulations are silent, it appears that the total investment upon which the amount of the exemption is based is also the average for the year. Therefore, if the investment in foreign countries is materially increased during the preceding year, the Return should show the average for the year, and the proportion of the $99,000 which is to be deducted will be larger than if the figures at the beginning of the preceding year were used, but smaller than if the figures of the end of the year were used. 32. The general provisions with reference to exemption of certain classes of corporations, time for filing Returns and paying tax, penalties and so forth, apply to foreign corporations the same as to domestic corporations. TITLE VII. SPECIAL OCCUPATION TAXES UNDER THE LAW OF SEPTEMBER 8, 1916 1. Special taxes are levied by the Revenue Law of 1916, which are in the nature of annual excises upon the carrying on of certain kinds of business. 2. Brokers. Brokers are taxed $30 per year. Every person, firm, or company whose business it is to negotiate for others the purchase or sale of stocks, bonds, exchange, bullion, coined money, bank notes, promissory notes, or other securities, is a broker. Isolated transactions, since they are not the business of the person carrying them on, do not require the payment of the tax. The tax does not apply to real estate brokers. It must be paid for each branch office, but one tax payment is sufficient for a single office, even though many people may there be engaged, provided that they are all in the business of a single broker. If a branch office does not actually carry on a brokerage business, but merely receives orders, to be transmitted to the main office, separate tax payment is not required. Negotiating loans on commission, if there is no dealing in the securities is not taxable. 3. The following taxes are also imposed: Pawnbrokers, $50 per year; custom house brokers, $10 per year, and ship brokers, $30 per year. 4. Dealers and Manufacturers. Tobacco dealers and manufacturers pay taxes based upon their annual sales, both under the 1916 law and under the 1917 law. Beverage taxes, also, which were levied by the 1916 law, remain in effect in addition to those of the 1917 law. 5. Bowling Alleys, Circuses, Theatres. Proprietors of bowling alleys and billiard rooms pay $5 for each alley or table. The only exception is for bowling alleys or billiard tables in private homes; others are taxable whether open to the public or not. Proprietors of circuses pay $100, but each time the circus is presented in a different state, the tax must be paid for the balance of the fiscal year. For example, if a circus plays in Ohio in July, a tax of $100 must be paid. If it opens in Indiana in August, a tax of $91.66 must be paid. If it goes back to Ohio in September, no further tax need be paid there, but if it goes to Pennsylvania in October, a tax of $75 must be paid. No refund is made if a circus is abandoned. Proprietors of carnivals, wagon shows, baseball parks, and other public exhibitions for money pay $10 per year, subject to the same rule for paying in each state as in case of circuses. Chautauquas, lecture lyceums, agricultural fairs, industrial exhibitions, and exhibitions by religious or charitable associations are exempt. Proprietors of theatres, moving picture theatres, museums, and concert halls, where a charge for admission is made, pay annually a tax based on the seating capacity and population of the city as follows: Where population is more than 5,000, for seating capacity of not more than 250, $25; not more than 500, $50; not more than 800, $75; more than 800, $1000; where population is 5,000 or less, one-half the above rates. 6. Returns and Payment. All persons subject to the above taxes must make returns (on Form 11) and pay the tax on or before July 1, of each year, or before commencing to carry on the taxable business, subject to the same penalties as in the case of the Capital Stock Tax. The receipt or stamp given for the special tax must be kept on display at the place of business for which the tax was paid. (Selected Sections.) [Public-No. 50-65th Congress.] AN ACT To provide revenue to defray war expenses, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, WAR INCOME TAX. Section 1. That in addition to the normal tax imposed by subdivision (a) of section one of the Act entitled "An Act to increase the revenue, and for other purposes, "" approved September eighth, nineteen hundred and sixteen, there shall be levied, assessed, collected, and paid a like normal tax of two per centum upon the income of every individual, a citizen or resident of the United States, received in the calendar year nineteen、 hundred and seventeen and every calendar year thereafter. Sec. 2. That in addition to the additional tax imposed by subdivision (b) of section one of such Act of September eighth, nineteen hundred and sixteen, there shall be levied, assessed, collected, and paid a like additional tax upon the income of every individual received in the calendar year nineteen hundred and seventeen and every calendar year thereafter, as follows: One per centum per annum upon the amount by which the total net income exceeds $5,000 and does not exceed $7,500; Two per centum per annum upon the amount by which the total net income exceeds $7,500 and does not exceed $10,000; Three per centum per annum upon the amount by which the total net income exceeds $10,000 and does not exceed $12,500; Four per centum per annum upon the amount by which the total net income exceeds $12,500 and does not exceed $15,000; . Five per centum per annum upon the amount by which the total net income exceeds $15,000 and does not exceed $20,000; Seven per centum per annum upon the amount by which the total net income exceeds $20,000 and does not exceed $40,000; Ten per centum per annum upon the amount by which the total net income exceeds $40,000 and does not exceed $60,000; Fourteen per centum per annum upon the amount by which the total net income exceeds $60,000 and does not exceed $80,000; Eighteen per centum per annum upon the amount by which the total net income exceeds $80,000 and does not exceed $100,000; Twenty-two per centum per annum upon the amount by which the total net income exceeds $100,000 and does not exceed $150,000; Twenty-five per centum per annum upon the amount by which the total net income exceeds $150,000 and does not exceed $200,000; Thirty per centum per annum upon the amount by which the total net income exceeds $200,000 and does not exceed $250,000; 102 Thirty-four per centum per annum upon the amount by which the total net income exceeds $250,000 and does not exceed $300,000; Thirty-seven per centum per annum upon the amount by which the total net income exceeds $300,000 and does not exceed $500,000; Forty per centum per annum upon the amount by which the total net income exceeds $500,000 and does not exceed $750,000; Forty-five per centum per annum upon the amount by which the total net income exceeds $750,000 and does not exceed $1,000,000; Firty per centum per annum upon the amount by which the total net income exceeds $1,000,000. Sec. 3. That the taxes imposed by sections one and two of this Act shall be computed, levied, assessed, collected, and paid upon the same basis and in the same manner as the similar taxes imposed by section one of such Act of September eighth, nineteen hundred and sixteen, except that in the case of the tax imposed by section one of this Act (a) the exemptions of $3,000 and $4,000 provided in section seven of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, shall be, respectively, $1,000 and $2,000, and (b) the returns required under subdivisions (b) and (c) of section eight of such Act, as amended by this Act, shall be required in the case of net incomes of $1,000 or over, in the case of unmarried persons, and $2,000 or over in the case of married persons, instead of $3,000 or over, as therein provided, and (c) the provisions of subdivision (c) of section nine of such Act, as amended by this Act, requiring the normal tax of individuals on income derived from interest to be deducted and withheld at the source of the income shall not apply to the new two per centum normal tax prescribed in section one of this Act until on and after January first, nineteen hundred and eighteen, and thereafter only one two per centum normal tax shall be deducted and withheld at the source under the provisions of such subdivision (c), and any further normal tax for which the recipient of such income is liable under this Act or such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, shall be paid by such recipient. Sec. 4. That in addition to the tax imposed by subdivision (a) of secton ten of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, there shall be levied, assessed, collected, and paid a like tax of four per centum upon the income received in the calendar year nineteen hundred and seventeen and every calendar year thereafter, by every corporation, joint-stock company or association, or insurance company, subject to the tax imposed by that subdivision of that section, except that if it has fixed its own fiscal year, the tax imposed by this section for the fiscal year ending during the calendar year nineteen hundred and seventeen shall be levied, assessed, collected, and paid only on that proportion of its income for such fiscal year which the period between January first, nineteen hundred and seventeen, and the end of such fiscal year bears to the whole of such fiscal year. The tax imposed by this section shall be computed. levied, assessed, collected, and paid upon the same incomes and in the same manner as the tax imposed by subdivision (a) of section ten of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, except that for the purpose of the tax imposed by this section the income embraced in a return of a corporation, joint-stock company or association, or insurance company, shall be credited with the amount received as dividends upon the stock or from the net earnings of any other corporation, joint-stock company, or association, or insurance company, which is taxable upon its net income as provided in this title. Sec. 5. That the provisions of this title shall not extend to Porto Rico or the Philippine Islands, and the Porto Rican or Philippine Legislature shall have power by due enactment to amend, alter, modify, or repeal the income tax laws in force in Porto Rico or the Philippine Islands, respectively. WAR EXCESS PROFITS TAX. Sec. 200. That when used in this title The term "corporation" includes joint-stock companies or associations and insurance companies; 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 The term "prewar period" means the calendar years nineteen hundred and eleven, nineteen hundred and twelve, and nineteen hundred and thirteen, or, if a corporation or partnership was not in existence or an individual was not engaged in a trade or business during the whole of such period, then as many of such years during the whole of which the corporation or partnership was in existence or the individual was engaged in the trade or business; The terms "trade" and "business" include professions and occupations; The term "net income" means in the case of a foreign corporation or partnership or a non-resident alien individual, the net income received from sources within the United States. Sec. 201. 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, partnership, or individual, a tax (hereinafter in this title referred to as the tax) equal to the following percentages of the net income: Twenty per centum of the amount of the net income in excess of the |