REVENUE ACTS OF 1913-1936 AND CERTAIN TAX PROVISIONS OF THE NATIONAL INDUSTRIAL RECOVERY ACT (1933) A SYNOPSIS OF CORPORATION INCOME AND PROFITS TAX RATES AND CREDITS AFFECTING THE COMPARABILITY OF DATA IN "STATISTICS OF INCOME " 195 Corporation income and profits tax rates and credits, under the Revenue Acts of 1913 (1983), also the special excise tax rate 2,000 Net income in excess of the sum of (1) 2,000 Net income in excess of the sum of (1) _do_... 1 2 12 10 2,000 10 1922, 1923 2,000 1924 (June 2, 1924). 1212 1926 (Feb. 26, 1926). 1928 (May 29, 1928).. 1932 (June 6, 1932). National Industrial Recovery Act (June 16, 1933).19 1934 (May 10, 1934).. 1935, (Aug. 30, 1935). 1936 (June 22, 1936).-- 1932, 1933. through 1936 and certain tax provisions of the National Industrial Recovery Act and credit under the act of Aug. 5, 1909 1 Excess-profits tax 2 Credit Taxable income 4 5 Rate (percent) Tax credit for income and profits taxes paid to foreign countries or United States possessions ($3,000 plus: An amount equal to the same percentage of invested capital 7 for the taxable year as the average annual pre-war income was of prewar invested capital (not less than 7 percent nor more than 9 percent); or if corporation was not in existence during at least 1 whole year of the pre-war period, 8 percent of invested capital for taxable year; or if during pre-war period, corporation had either no net income or a very small net income or if invested capital can not be determined, same percent as that of representative corporations. (See sec. 210, Revenue Act of 1917.) $3,000 plus 8 percent of the invested capital for the taxable year.2 (Net income equal to 15 per cent of invested capital less credit. Net income in excess of 15 percent but not in excess of 20 percent of invested capital. Net income in excess of 20 percent but not in excess of 25 percent of invested capital. Net income in excess of 25 percent but not in excess of 33 percent of invested capital. Net income in excess of 33 percent of invested capital. Net income equal to 20 percent of invested capital less credit. Net income in excess of 20 percent of invested capital. 10 percent and not in excess of 15 percent of adjusted declared value. Net income in excess of 15 percent of adjusted de 5 Amount paid or accrued." 6 12 Corporation income and profits tax rates and credits, under the Revenue Acts of 1913 (1933), also the special excise tax rate and credit 1 All corporations are required to file returns regardless of amount of net income or loss, except those exempted by specific provisions of the law. Under the Revenue Act of 1909, corporations were required to file returns on a calendar year basis; under subsequent revenue acts corporations were permitted to file returns on a fiscal year basis, other than that ending Dec. 31, except that under the act of 1921 and subsequent acts life insurance companies are required to file on a calendar year basis in accordance with the State laws regulating insurance companies. Foreign corporations are required to file income tax returns for all income from sources within the United States, regardless of amount, and are entitled to the statutory deductions allowed against such income, except that for 1936, foreign corporations not engaged in trade or business in the United States and not having an office or place of business therein, being liable to tax only upon their fixed or determinable annual or periodical income from sources within the United States, are not required to file returns unless the total tax has not been paid at source. When filing returns, such foreign corporations are not allowed any deductions. From Jan. 1, 1918, through Dec. 31, 1921, personal service corporations were treated as partnerships. Prior and subsequent to said dates, such corporations were taxed as other corporations. For 1934 and subsequent years, personal holding companies (as defined in sec. 351(b), Revenue Act of 1934) are required to file returns for surtax, in addition to the corporation returns for income and excess-profits tax. (For rates, see page 54.) 2 For the years 1918 through 1921, the war-profits and excess-profits tax of foreign corporations, and for 1921 the war-profits and excess-profits tax of corporations deriving a large portion of their gross income from sources within a possession of the United States, is computed by comparison with respresentative corporations whose invested capital can be satisfactorily determined and which are engaged in a like or similar trade or business and similarly circumstanced. (See sec. 328, Revenue Acts of 1918 and 1921.) (See note 7.) Specific credit allowable to domestic corporations with net income of $25,000 or less, 1921 through 1931, except domestic corporations deriving a large portion of their gross income from sources within a possession of the United States, 1928 and subsequent years; not allowable to foreign corporations, 1918 and subsequent years. In arriving at the net income subject to income tax for the years 1917 through 1921 there is allowed as a credit the amount of excess profits tax (and for 1918 through 1921, the war-profits tax); for 1933 through 1935 no credit was allowed for excess-profits tax in arriving at net income subject to income tax, nor was a credit allowed for income tax in arriving at net income subject to excess-profits tax; for 1936 the amount of excessprofits tax is allowed as a credit in arriving at the net income subject to income tax. Net income means "statutory" net income, i. e., the excess of gross income over deductions as defined in the various revenue acts. Foreign corporations report only income from sources within the United States; for 1921 and subsequent years domestic corporations deriving a large portion of their gross income from ources within a possession of the United States report only income from sources within the United States, or income from sources within or without the United States, received within the United States. (See sec. 262 of the Revenue Acts of 1921, 1924, and 1926 and sec. 251 of the Revenue Act of 1928 and subsequent acts.) Net income has been adjusted from time to time as follows: (a) Amortization of buildings, machinery, equipment, or other facilities constructed or acquired on or after Apr. 6, 1917, for the production of articles contributing to the prosecution of the war, is included to a reasonable amount in business deductions for 1918 through 1921. (b) Dividends received on stock of all corporations liable to the tax imposed by the Revenue Acts of 1909, 1917, and 1918 are deductible. (Such deductible dividends are not included in the amount of gross income shown in "Statistics of Income" for 1918 due to the fact that on the return these dividends were designated as nontaxable income.) Under the Revenue Acts of 1913 and 1916, dividends are not deductible. Under the Revenue Acts of 1921 through 1934 there may be deducted the full amount of dividends received from domestic corporations and from foreign corporations deriving a certain amount of income from sources within the United States; but under the Revenue Act of 1935, only 90 percent of the amount of such divi |