SUBTITLE B-MISCELLANEOUS TAXES 6. Capital stock..... 18. Mixed flour_-_ Chapter 7. Tax on transfers to avoid income tax. 8. Alaskan railroads tax.. 9. Employment taxes_ 10. Admissions and dues__ 11. Documents, other instruments, and playing cards_. 12. Safe-deposit boxes- 13. Circulation other than of national banks. 14. Cotton futures____ 15. Tobacco, snuff, cigars, and cigarettes-- 16. Oleomargarine, adulterated butter, and process or renovated butter__ 17. Filled cheese_-_. Page 169 172 173 174 189 195 205 207 210 217 247 256 260 264 267 269 284 288 295 379 397 167 (a) DOMESTIC CORPORATIONS.-For each year ending June 30, beginning with the year ending June 30, 1939, there shall be imposed upon every domestic corporation with respect to carrying on or doing business for any part of such year an excise tax of $1 for each $1,000 of the adjusted declared value of its capital stock. (b) FOREIGN CORPORATIONS.-For each year ending June 30, beginning with the year ending June 30, 1939, there shall be imposed upon every foreign corporation with respect to carrying on or doing business in the United States for any part of such year an excise tax equivalent to $1 for each $1,000 of the adjusted declared value of capital employed in the transaction of its business in the United States. SEC. 1201. EXEMPTIONS. (a) The taxes imposed by section 1200 shall not apply (1) CORPORATIONS EXEMPT FROM INCOME TAX.-To any corporation enumerated in section 101; (2) INSURANCE COMPANIES.-To any insurance company subject to the tax imposed by section 201, 204, or 207. (b) COMMON TRUST FUNDS. For exemption of common trust funds from the capital stock tax, see section 169 (b) of chapter 1. SEC. 1202. ADJUSTED DECLARED VALUE. (a) DECLARATION YEAR. (1) The adjusted declared value shall be determined with respect to three-year periods beginning with the year ending June 30, 1938, and each third year thereafter. The first year of each such threeyear period, or, in case of a corporation not subject to the tax imposed for such year, the first year of such three-year period for which the corporation is subject to such tax, shall constitute a "declaration year." (2) For the declaration year of the first three-year period the adjusted declared value shall be the value as declared by the corporation in its return under section 601 of the Revenue Act of 1938, 52 Stat. 565, for the year ended June 30, 1938, or in the case of a corporation not subject to the tax imposed for such year, the value as declared in its return filed under this chapter for the 98907-39—PT, I——12 169 first year with respect to which it is subject to the tax. For each subsequent three-year period, the adjusted declared value for a declaration year shall be the value as declared by the corporation in its return for such declaration year. The value declared by a corporation in its return for a declaration year (which declaration of value cannot be amended) shall be as of the close of its last income-tax taxable year ending with or prior to the close of such declaration year (or as of the date of organization in the case of a corporation having no income-tax taxable year ending with or prior to the close of such declaration year). (b) SUBSEQUENT YEARS.— (1) DOMESTIC CORPORATIONS.-For each year of any three-year period subsequent to the declaration year, the adjusted declared value in the case of a domestic corporation shall be the value declared in the return for the declaration year plus (A) the cash, and the fair market value of property, paid in for stock or shares, (B) paid-in surplus and contributions to capital, C) its net income, (D) its income wholly exempt from Federal income tax, and (E) the amount, if any, by which the deduction for depletion exceeds the amount which would be allowable if computed without regard to discovery value or to percentage depletion, under section 114 (b) (2), (3), or (4) of chapter 1 or a corresponding section of a later Revenue Act; and minus (i) the cash, and the fair market value of property, distributed to shareholders, (ii) the amount disallowed as a deduction by section 24 (a) (5) of chapter 1 or a corresponding provision of a later Revenue Act, and (iii) the excess of the deductions allowable for income tax purposes over its gross income. The adjustments provided in this paragraph shall be made for each income-tax taxable year included in the three-year period from the date as of which the value was declared in the return for the declaration year to the close of the last income-tax taxable year ending with or prior to the close of the year for which the tax is imposed by this section. The amount of such adjustment for each such year shall be computed (on the basis of a separate return) according to the income tax law applicable to such year. (2) FOREIGN CORPORATIONS. For each year of any three-year period subsequent to the declaration year, the adjusted declared value in the case of a foreign corporation shall be the value declared in the return for the declaration year adjusted (for the same income-tax taxable years as in the case of a domestic corporation), in accordance with regulations prescribed by the Commissioner with the approval of the Secretary, to reflect increases or decreases in the capital employed in the transaction of its business in the United States. (c) CORPORATIONS IN BANKRUPTCY OR RECEIVERSHIP.-The capitalstock tax year beginning with or within an income-tax taxable year within which bankruptcy or receivership, due to insolvency, of a domestic corporation, is terminated shall constitute a declaration year. In such case the adjusted declared value for any subsequent year of the three-year period shall be determined on the basis of the value declared in the return for such declaration year. (d) CREDIT FOR CHINA TRADE ACT CORPORATIONS.-For the purpose of the tax imposed by section 1200 there shall be allowed in the case of a corporation organized under the China Trade Act, 1922, 42 Stat. 849 (U. S. C., Title 15, c. 4), as a credit against the adjusted 'declared |