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 section ten of such Act of September eighth, nineteen hundred and sixteen, as amended by this Act, there shall be levied, assessed, collected, and paid a like tax of four per centum upon the income received in the calendar year nineteen hundred and seventeen and every calendar year thereafter, by every corporation, joint-stock company or association, or insurance company, subject to the tax imposed by that subdivision of that section, except that if it has 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 may be credited to tion sixteen, as amended by this Act, except that for Exception the purpose of the tax imposed by this section the income embraced in a return of a corporation, Dividends received joint-stock company or association, or insurance income of corporacompany, 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. TITLE II.-WAR EXCESS PROFITS TAX. Porto Rico and Philippines-war income tax does not apply to War excess 1. Definitions The term "domestic" means created under the law of the United States, or of any State, Territory, "Domestic" 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; "Foreign" The term "United States" means only the "United States" states, the territories of Alaska and Hawaii, and the District of Columbia; "Taxable year" "Fiscal year" The term "taxable year" means the twelve months ending December thirty-first, excepting in the case of a corporation or partnership which has fixed its own fiscal year, in which case it means such fiscal year. The first taxable year shall be the year year" ending December thirty-first, nineteen hundred and seventeen, except that in the case of a corporation "First taxable "Prewar period" "Trade" or "business" "Net income" for non-resident aliens, or foreign corporations 2. War excess profits tax rates 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 nonresident 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: taxed 20% Twenty per centum of the amount of the net 15% excess profits income in excess of the deduction (determined as hereinafter provided) and not in excess of fifteen per centum of the invested capital for the taxable year; 15% to 20% excess Twenty-five per centum of the amount of the profits taxed 25% net income in excess of fifteen per centum and not in excess of twenty per centum of such capital; 20% to 25% 35% excess profits taxed Thirty-five per centum of the amount of the excess profits taxed net income in excess of twenty per centum and not in excess of twenty-five per centum of such capital; 25% to 33% Forty-five per centum of the amount of the net 45% income in excess of twenty-five per centum and not in excess of thirty-three per centum of such capital; and Over 33% excess Sixty per centum of the amount of the net profits taxed 60% income in excess of thirty-three per centum of such capital. 3. All activities of a "single business" For the purpose of this title every corpora- corporation or tion or partnership not exempt under the provisions of this section shall be deemed to be engaged in business, and all the trades and businesses in which it is engaged shall be treated as a single trade or business, and all its income from whatever source derived shall be deemed to be received from such trade or business. every business This title shall apply to all trades or businesses 4. Law applies to of whatever description, whether continuously carried on or not, except Except: (a) Government (a) In the case of officers and employees under the United States, or any State, Territory, or the District of Columbia, or any local subdivision officials thereof, the compensation or fees received by them as such officers or employees; (b) Corporations exempt from tax under the provisions of section eleven of Title I of such Act (b) Corporations exempted under Income Tax Law, and partnerships engaged in same and individuals business (c) Incomes from weekly premium payment insurance Exemption or non-resident aliens whose income is less than $3,000 of September eighth, nineteen hundred and sixteen, as amended by this Act, and partnerships and individuals carrying on or doing the same business, or coming within the same description; and (c) Incomes derived from the business of life, health, and accident insurance combined in one policy issued on the weekly premium payment plan. SEC. 202. That the tax shall not be imposed Foreign corporations in the case of the trade or business of a foreign corporation or partnership or a nonresident alien individual, the net income of which trade or business during the taxable year is less than $3,000. 5. Deduction from war excess profits, how to determine (a) Domestic corporation (b) Domestic partnership or citizen or resident of U. S. (c) Foreign corpora SEC. 203. That for the purposes of this title the deduction shall be as follows, except as otherwise in this title provided (a) In the case of a domestic corporation, the sum of (1) an amount equal to the same percentage of the invested capital for the taxable year which the average amount of the annual net income of the trade or business during the prewar period was of the invested capital for the prewar period (but not less than seven or more than nine per centum of the invested capital for the taxable year), and (2) $3,000; (b) In the case of a domestic partnership or of a citizen or resident of the United States, the sum of (1) an amount equal to the same percentage of the invested capital for the taxable year which the average amount of the annual net income of the trade or business during the prewar period was of the invested capital for the prewar period (but not less than seven or more than nine per centum of the invested capital for the taxable year), and (2) $6,000; (c) In the case of a foreign corporation or or nonresident alien partnership or of a nonresident alien individual, an tion or partnership |