UC-NRLF 
 
 ^j'^he War Tax Law 
 
 &73 
 
 Guaranty Trust Company 
 of New York 
 
GIFT or 
 
The War Tax Law 
 
 Approved October 3, 1917 
 
 Guaranty Trust Company of New York 
 
 140 Broadway 
 
 LONDON OFFICE FIFTH AVENUE OFFICE PARIS OFFICE 
 
 32 Lombard St., E. C. Fifth Arenue and 43d Street Rue des Italiens, 1 & 3 
 

 COPYRIGHT, 1917 
 GUARANTY TRUST COMPANY OF NEW YORK 
 
j< 
 
 'A 
 
 Contents 
 
 
 
 PAGE 
 
 Foreword 
 
 5 
 
 Synopsis of Law 
 
 7 
 
 Full Text of Law 
 
 65 
 
 Index to Synopsis 
 
 129 
 
 3G6496 
 
FOREWORD 
 
 IN providing for war revenue, the War Tax 
 Act has been so framed as to make the 
 assessment for war purposes additional 
 to taxes which are already eflfective under 
 existing law. Taxes provided for in this 
 Act are thus separate and distinct from ex- 
 isting taxes, and, when the time comes for 
 abolishing war taxes, it may be done without 
 affecting general tax laws existing prior to 
 the War Tax Law. 
 
 This digest has been prepared in such a 
 way as to make clear this separation of War 
 Taxes from those existing before this en- 
 actment. If similar assessments have been 
 made under former laws, both the existing 
 tax and the war tax are given. 
 
 The amendments to the Federal Income 
 Tax Law which are included under the 
 subject of "Income Taxes," although con- 
 tained in the War Tax Law, are amend- 
 ments to the Income Tax Law of September 
 8, 1916, and, as explained above, should not 
 be confused with the war tax legislation. 
 
 October 4, 1917 
 
Synopsis of 
 
 The War Tax Law 
 
 Af^rored October 3, 1917 
 
 War Income Tax 
 
 INDIVIDUALS 
 
 Normal Tax 
 
 In addition to the present rate of normal tax of 2%, the 
 law provides for a further normal tax of 2% on incomes 
 of residents or citizens of the United States in excess of 
 $2,000 for married persons or heads of families, or in 
 excess of $1,000 for single persons. By the assessment of 
 this additional tax of 2%, incomes in excess of $4,000 for 
 married persons or heads of families, or $3,000 for single 
 persons, will be subject to a normal tax of 4%. (Sec. 1.) 
 
 It will be noted that the additional normal tax does not 
 apply to non-resident alien individuals. 
 
 Surtax 
 
 In addition to the surtax imposed by the act of Septem- 
 ber 8, 1916, a further surtax on incomes of citizens and 
 residents of the United States and non-resident ahens, is 
 imposed as shown in the chart on the following page: 
 (Sec, 2.) 
 
 (The chart includes the rates of the existing tax, the war tax 
 and total tax.) 
 
 [7] 
 
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 [8] 
 
Collection of Tax 
 
 Additional taxes under the War Tax Law shall be 
 levied, assessed, collected and paid in the same manner 
 as similar taxes imposed by the Income Tax Law of 
 September 8, 1916. {Sec, 3.) 
 
 Exemptions 
 
 For the purpose of the assessment of the additional war 
 tax, the specific exemption allowed to married persons or 
 heads of families shall be $2,000, and for single persons, 
 $1,000. (Sec. 3.) 
 
 By the amendment to Section 7, Act of September 8, 1916, it is provided 
 that the head of a family shall be entitled to an additional exemption of 
 $200 for each child dependent upon him or her, if under eighteen years of 
 age, or if incapable of self-support because mentally or physically defective 
 (Page 12.) 
 
 Returns 
 
 Annual returns for taxes are required for net incomes 
 of $1,000 or over, in the case of single persons, and $2,000 
 or over, in the case of married persons or heads of families. 
 
 (Sec. 3.) 
 
 Deduction at Source 
 
 Deduction of tax at the source on interest derived from 
 tax free bonds shall not apply to the additional normal 
 tax of two per centum until after January 1, 1918, and 
 thereafter only one two per centum normal tax shall be 
 deducted. Any further normal tax, for which the recipient 
 of such income is liable, shall be paid by the recipient. 
 (Sec. 3.) 
 
 CORPORATIONS 
 Additional Tax 
 
 In addition to the tax of 2% now assessed on net earn- 
 ings of corporations, under the act of September 8, 1916, 
 the War Tax Law provides for a further tax of 4%, 
 making the total income tax on net earnings now 6%. 
 {Sec. 4.) 
 
 [9] 
 
Collection of Tax 
 
 The additional tax shall be levied, assessed, collected 
 and paid in the same manner as the tax imposed by the 
 act of September 8, 1916, as amended. {Sec, 4.) 
 
 Dividends 
 
 For the purpose of the assessment of the additional 
 tax, the income of a corporation shall be credited with the 
 amount received as dividends upon the stock or from the 
 net earnings of any other corporation, which is taxable 
 upon its net income for the additional tax. (Sec. 4.) 
 
 EFFECTIVE DATE OF LAW 
 
 The additional taxes provided for shall be assessed for 
 the calendar year 1917 and each year thereafter. 
 
 If a corporation has fixed its own fiscal year, the addi- 
 tional tax imposed for the fiscal year ending during the 
 calendar year 1917 shall be assessed, collected and paid 
 only on that proportion of its income for such fiscal year 
 which the period between January 1, 1917, and the end of 
 such fiscal year bears to the whole fiscal year. (Sec. 4.) 
 
 PORTO RICO AND THE PHILIPPINE ISLANDS 
 
 The provisions of this title do not extend to Porto Rico 
 or the Philippine Islands, and the legislatures of Porto 
 Rico and the Philippine Islands are given power to amend, 
 alter, modify or repeal the income tax laws enforced in 
 Porto Rico or the Philippine Islands. (Sec, 5.) 
 
 [10] 
 
Income Tax Amendments 
 
 Changes in the law of 
 September 8, 1916 
 
 INDIVIDUALS 
 
 Tax on Dividends 
 
 Dividends paid from earnings acquired subsequent to 
 March 1, 1913, are taxable. The amendment of the In- 
 come Tax Law provides that dividends shall be deemed to 
 have been paid from the net income of the year in which 
 paid, or from the most recently accumulated surplus, and 
 shall constitute income of the shareholder for the year in 
 which received, but be taxed at the rates prescribed for 
 the year in which earned by the corporation. The above 
 provisions do not apply to distributions made prior to 
 August 6, 1917, out of profits accrued prior to March 1, 
 1913. (Sec. 1211.) 
 
 Stock dividends are to be considered income to the 
 amount of surplus, undivided profits and earnings so 
 distributed. (Sec. 1211.) For example, if a corporation 
 issues a stock dividend of one hundred shares, having a 
 par value of $ IOC each, and transfers to capital an amount 
 of surplus and undivided profits equal to the value of the 
 stock distributed, the par value of the stock received shall 
 be returned as taxable income. 
 
 Interest on Government Bonds 
 
 Interest on United States bonds issued after September 
 1, 1917, is exempt from taxation only to the extent pro- 
 vided in the act authorizing the issue. (Sec, 1200.) 
 
 General Deductions 
 
 The law relating to general deductions is changed with 
 respect to deductions on account of taxes and deductions 
 
 [111 
 
on account of interest on indebtedness. Interest on 
 indebtedness incurred in the purchase of obligations or 
 securitias, the interest upon which is exempt from income 
 tax, may not be deducted in determining net income. 
 Taxes paid on income and excess profits will also not be 
 permitted as a general deduction. This applies to both 
 citizens and residents of the United States and to non- 
 resident aliens. (Sees. 1201, 1202.) 
 
 Contributions or gifts within the year for religious, 
 charitable, scientific, educational or humanitarian pur- 
 poses, to an amount not in excess of fifteen per centum of 
 the taxpayer's taxable net income, when verified under 
 prescribed regulations, shall be allowable as deductions. 
 (Sec. 1201.) 
 
 General deductions allowed non-resident aliens (Sec, 6) 
 will be permitted only in case a true and accurate return 
 filed of all income received from sources corporate or 
 otherwise within the United States. (Sec. 1202.) 
 
 Specific Exemption 
 
 Under the law as amended an additional exemp- 
 tion of $200 for each dependent child, if under 18 years of 
 age, or if incapable of self support because mentally or 
 physically defective, is allowed. This additional exemp- 
 tion operates only in the case of one parent in the same 
 family. (Sec. 1203.) 
 
 The provision of the law permitting the specific exemp- 
 tion to non-resident aliens is repealed. (Sec 1203.) 
 
 PARTNERSHIPS 
 
 Returns 
 
 Partnerships, when required to file return, shall have 
 the same privilege of fixing and making returns upon the 
 basis of their own fiscal years as is accorded to corpora- 
 tions. (Sec. 1204.) 
 
 [12] 
 
The share of profits of a partnership to which any tax- 
 able partner would be entitled for the fiscal year ending 
 in 1916 or a subsequent calendar year, for which the rates 
 of tax have been or shall be changed by law, shall be returned 
 for taxation and the tax paid under the respective rates 
 applicable to each calendar year in the proportion that 
 the period of each calendar year bears to the full fiscal 
 year. {Sec. 1204.) 
 
 Income derived from interest on Government bonds 
 shall be credited in determining net income only to the 
 extent that it is provided in the act authorizing the issue 
 that they are exempt. {Sec, 1204.) 
 
 DEDUCTION OF THE TAX AT THE SOURCE 
 
 Individuals, Residents or Citizens 
 
 Deduction of the normal tax at the source on income of 
 individuals, residents or citizens of the United States, is 
 abolished, except with respect to tax free bonds. Exemp- 
 tion may be claimed from deduction of tax on tax free 
 bonds by filing a certificate prior to February first. {Sec. 
 1205.) 
 
 Non-Resident Aliens 
 
 Deduction of the normal tax at the source on the income 
 of non-resident alien individuals remains unchanged. 
 
 {Sec. 1205.) 
 
 Foreign Corporations and Firms 
 
 Deduction of the tax at the source on dividends payable 
 to non-resident alien corporations not having a place of 
 business in the United States is retained, and deduction 
 of tax on interest on bonds of domestic corporations pay- 
 able to non-resident alien corporations or firms» not having 
 a place of business in the United States, is also continued. 
 
 13] 
 
Tax Withheld During 1917 
 
 Any amount of tax withheld by a withholding agent 
 during the year 1917 on account of tax imposed upon the 
 income of any individual, citizen or resident of the U. S., 
 except in case of interest on tax free bonds, shall be released 
 and paid over to such individual. {Sec. 1212.) 
 
 Payment of Tax by Recipients 
 
 The entire tax upon the income of individuals, citizens 
 or residents of the United States shall be paid hereafter 
 directly by the owners of the income, except where de- 
 duction at the source is authorized. 
 
 DEDUCTION OF EXCESS PROFITS TAX 
 
 In assessing income tax, the net income embraced in 
 tlie return shall be credited with the amount of any 
 excess profits tax assessed for the calendar or fiscal year 
 upon the taxpayer. In the case of a member of a partner- 
 ship, the net income of the member shall be credited 
 with his proportionate share of the excess profits tax of 
 the partnership. (Sec, 1211.) 
 
 INCOME OF FOREIGN GOVERNMENTS 
 
 Income of foreign governments received from invest- 
 ments in the United States in stocks, bonds or other domes- 
 tic securities, or from interest on deposits in banks, shall 
 not be subject to tax. (Sec, 1211.) 
 
 CORPORATIONS 
 
 Undistributed Surplus 
 
 In addition to other taxes, a tax of 10% shall be imposed 
 on the net income, beginning with the year 1917, of every 
 corporation, joint stock company or association or insur- 
 
 [14] 
 
ance company, received during each year and remaining 
 undistributed six months after the end of each calendar 
 or fiscal year. {Sec, 1206.) 
 
 Undistributed income which is actually invested or 
 employed in the business or is retained for employment, 
 in the reasonable requirements of the business, is not sub- 
 ject to the tax. Likewise income invested in obligations 
 of the United States issued after September 1, 1917, is 
 not subject to the tax. (Sec, 1206.) 
 
 11 the Secretary pf the Treasury ascertains and finds 
 that income is retained at any time for employment in 
 the business and is not so employed or is not reasonably 
 required in the business, the tax shall be assessed at the 
 rate of 15%. (Sec, 1206.) 
 
 In case return is made on the basis of a fiscal year 
 ending prior to December 31, 1917, the tax shall be imposed 
 on that proportion of the income which the part of the 
 fiscal year in the year 1917 bears to the whole of such 
 fiscal year. {Sec, 1206.) 
 
 Payments of Dividends 
 
 A corporation is required to include in its annual return 
 a statement of its payments of dividends which are made 
 in cash or its equivalent or in stock, including the names 
 and addresses of stockholders and the number of shares 
 owned by each and the applicable amounts in which such 
 dividends were earned. {Sec, 1210.) 
 
 General Deductions 
 
 The law relating to general deductions is changed with 
 respect to deductions on account of interest on indebted- 
 ness and deductions on account of taxes. Interest on 
 indebtedness, incurred in the purchase of obligations or 
 securities, the interest upon which is exempted from 
 income tax, may not be deducted in determining net 
 income. Taxes paid on income and excess profits will 
 
 [15] 
 
also not be permitted as a general deduction. This 
 applies to both foreign and domestic corporations. {Sec. 
 1207.) 
 
 INFORMATION AT THE SOURCE 
 
 The system of information at the source is substituted 
 for deduction of the tax at the source with respect to in- 
 come received by citizens or residents of the United 
 States, except income derived from interest on tax free 
 bonds. Information at the source shall apply to the calen- 
 dar year 1917, but shall not apply Jto the payment of 
 interest on bonds of the United States. (Sec. 1211.) 
 
 Brokers' Returns 
 
 Every person, corporation, partnership or association 
 doing business as a broker on any exchange, board of 
 trade or other similar place of business shall, when required 
 by the Commissioner of Internal Revenue, render a return 
 showing the names of customers for whom such person, 
 corporation, partnership or association has transacted any 
 business with such details as to the profits, losses, or other 
 information as will enable the Commissioner of Internal 
 Revenue to determine whether all income tax due on 
 profits or gains of such customers has been paid. (Sec. 
 1211.) 
 
 Returns of Miscellaneous Income 
 
 All persons, corporations, partnerships, associations and 
 insurance companies, in whatever capacity acting, includ- 
 ing lessees or mortgagors of real and personal property, 
 trustees acting in any trust capacity, executors, adminis- 
 trators, receivers, conservators and employers making 
 payment due another person, corporation, partnership 
 association or insurance company of interest, rent, salaries, 
 wages, premium, annuities, compensation, remuneration, 
 emoluments or other fixed or determinable gains, profits 
 and income of $800 or more in any taxable year, or in the 
 
 [16] 
 
case of such payments made by the United States' to officers 
 or employees of the United States having information as 
 to such payments, and required to make returns in regard 
 thereto, are authorized and required to render a return 
 to the Commissioner of Internal Revenue setting forth the 
 amount of such gains, profits and income and the names 
 and addresses of the recipients of such payments. {Sec, 
 1211.) 
 
 Returns of Interest on Bonds and Foreign 
 Dividends 
 Returns shall be required regardless of the amount. of 
 payment (1) in the case of payments of interest upon 
 bonds and mortgages or deeds of trust or other similar 
 obligations of corporations, joint stock companies, asso- 
 ciations and insurance companies, and (2) in the case of 
 collections of items of interest upon the bonds of foreign 
 countries and interest from bonds or the stock of foreign 
 corporations by persons, corporations, partnerships or 
 associations undertaking as a matter of business or for 
 profit, the collection of foreign payments of such interest 
 or dividends by means of coupons, checks or bills of 
 exchange. (Sec. 1211.) 
 
 Disclosure of Ownership 
 
 The name and address of the recipient of the income 
 must be furnished on demand of the person paying the 
 income. (Sec. 1211.) 
 
 Penalty 
 
 Penalty for refusal or neglect to make return or supply 
 information is fine of not less than $20 and not more than 
 $1,000. 
 
 Any individual or officer of a corporation who makes any 
 false or fraudulent return or statement with intent to 
 defeat or evade the assessment of taxes shall be fined not 
 exceeding $2,000, or be imprisoned not exceeding one 
 year, or both. (Sec, 1209.) 
 
 [17] 
 
COLLECTION OF FOREIGN ITEMS 
 
 Persons, firms, corporations or associations making 
 collection of foreign payments of interest or dividends by 
 means of coupons, checks or bills of exchange, are required 
 to obtain a license from the Commissioner of Internal 
 Revenue. Any concern that undertakes to collect such 
 payments without having obtained a license therefor 
 shall be subject to a fine not exceeding $5,000 or imprison- 
 ment for a term not exceeding one year, or both. This 
 requirement is the same as that in effect before collection 
 of the tax at the source was abolished. 
 
 LIFE INSURANCE PREMIUMS 
 
 Premiums paid on life insurance policies covering the 
 lives of officers, employes, or those financially interested 
 in any trade or business conducted by an individual, 
 partnership or corporation shall not be deducted in com- 
 puting the net income of such individual, partnership or 
 corporation. {Sec, 1211.) 
 
 F18] 
 
War Excess Profits Tax 
 
 DEFINITIONS 
 
 "Corporation" includes joint stock companies or asso- 
 ciations and insurance companies. 
 
 "Domestic" means created under the laws of the United 
 States, or of any State, Territory or District thereof. 
 
 "Foreign" means created under the laws of any other 
 possession of the United States or of any foreign country 
 or government. 
 
 "United States" means only the States, the Territories 
 of Alaska and Hawaii, and the District of Columbia. 
 
 "Taxable Year" means the twelve months ending 
 December thirty-first, excepting in the case of a cor- 
 poration or partnership which has fixed its own fiscal 
 year, in which case it means such fiscal year. 
 
 "First Taxable Year" shall be the year ending Decem- 
 ber 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. 
 
 "Pre- War 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. 
 
 [19] 
 
existence or the individual was engaged in the trade or 
 business. 
 
 *Net Income," in the case of a foreign Corporation or 
 Partnership or a non-resident alien individual, means 
 net income received from sources within the United 
 States. 
 
 PERSONS, CORPORATIONS AND PARTNERSHIPS 
 SUBJECT TO TAX 
 
 The Tax, which is in addition to taxes under previously 
 existing laws not hereby repealed (page 34), is assessed 
 on the excess profits of corporations and partnerships, 
 both domestic and foreign, and of individuals, residents 
 or citizens of the United States, and non-resident aliens, 
 with respect to their trades and businesses. For the 
 purpose of this tax, a corporation or partnership is 
 deemed to be in but one trade or business and all income 
 is deemed to be received from such trade or business. 
 (Sec. 201.) 
 
 The Law applies to all trades or businesses of whatever 
 description, including professions and occupations, 
 whether carried on continuously or not, except: 
 
 1. In the case of oflScers and employes under the United 
 States, or any State, Territory, or the District of 
 Columbia, or any local subdivision thereof, the com- 
 pensation or fees received by them as such oflBcers 
 or employes. {Sec, 201.) 
 
 2. Income derived from the business of life, health and 
 accident insurance combined in one policy issued on 
 the weekly premium payment plan. (Sec. 201.) 
 
 120] 
 
CORPORATIONS, PARTNERSHIPS, AND 
 INDIVIDUALS EXEMPT FROM TAX 
 
 1. Foreign Corporations or Partnerships or Non- 
 resident Alien Individuals, the net income of whose 
 trade or business during the taxable year from som'ces 
 within the United States is less than $3,000. {Sec. 202.) 
 
 2. Corporations exempt from the Federal Income Tax 
 and Partnerships and Individuals engaged in the 
 same business or coming within the same description. 
 {Sec, 201.) 
 
 DETERMINATION OF EXCESS PROFITS 
 
 For the purpose of the determination of excess profits, 
 corporations, partnerships and individuals may, for 
 convenience, be divided into four classes : 
 
 Class I. Corporations or Partnerships in existence 
 or individuals engaged in business during the whole of 
 any one calendar year during the pre-war period shall 
 determine their excess profits as follows: {Sec, 203.) 
 
 Domestic Corporations 
 
 In the case of a domestic corporation by deducting from 
 net income, 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 pre-war period was of 
 the invested capital for the pre-war period, and (2) 
 $3,000. {Sec. 203-a.) 
 
 For Example: A corporation, having average capital invested 
 during the pre-war period, amounting to $100,000 and an 
 average net income for such period, amounting to $7,000, 
 would be entitled to a deduction of 7% of its invested capital 
 for the taxable year, plus the specific exemption of $3,000, in 
 determining excess profits for the taxable year. 
 
 1211 
 
Domestic Partner ships and Citizens or Residents of the 
 United States 
 
 In the case of a domestic partnership or a citizen or 
 resident of the United States, by deducting from net 
 income the same percentage of invested capital as in the 
 case of a domestic corporation but the specific exemption 
 allowed shall be $6,000 instead of $3,000, as in the case 
 of a corporation. {Sec. 203-b.) 
 
 Foreign Corporations and Partnerships and Non-Resident 
 Aliens 
 
 In the case of a foreign corporation or partnership or 
 a non-resident alien individual, the tax shall be based 
 on the income received from sources within the United 
 States, and the deduction shall be an amount equal to 
 the same percentage of the invested capital for the 
 taxable year which the average net income received 
 from sources within the United States during the pre- 
 war period was of the average invested capital during 
 the pre-war period. {Sec, 203-c.) 
 
 Invested capital shall be that proportion of the entire 
 invested capital which the net income from the trade or 
 business within the United States bears to the entire 
 net income. {Sec. 207.) 
 
 Limitation on Deductions 
 
 The foregoing deduction shall be an amount not less 
 than seven per centum nor more than nine per centum 
 of the invested capital for the taxable year. {Sec. 203.) 
 
 Inability to Determine Pre-War Income 
 
 If the Secretary of the Treasury is unable to determine 
 the average net income for the pre-war period, the war 
 profits shall be determined by the method prescribed 
 for Class III, page 24. {Sec. 203.) 
 
 [22] 
 
Class II. Corporations or Partnerships not in 
 
 EXISTENCE, AND INDIVIDUALS NOT ENGAGED IN BUSINESS, 
 DURING THE WHOLE OF ANY ONE CALENDAR YEAR DURING 
 THE PRE-WAR PERIOD, SHALL DETERMINE THEIR EXCESS 
 
 PROFITS AS follows: 
 
 Corporations 
 
 In the case of corporations, by deducting from net in- 
 come 8% of the invested capital for the taxable year, 
 plus $3,000, in the case of a domestic corporation. 
 (Sec. 204.) 
 
 For Example: A corporation, having invested capital for the 
 taxable year 1917 amounting to $200,000, will be entitled to a 
 deduction of 8% of $200,000 plus $3,000, namely a deduction 
 of $19,000. 
 
 Partnerships and Individuals 
 
 In the case of a partnership or an individual, by deduct- 
 ing from net income, 8% of the invested capital for 
 the taxable year, plus $6,000, in the case of a domestic 
 partnership or resident or citizen of the United States. 
 (Sec, 204.) 
 
 Business a Continuation of Former Business 
 
 A corporation or partnership, although formerly organ- 
 ized on or after January 2, 1913, which is substantially 
 a continuation of a trade or business carried on prior 
 to that date, shall be deemed to have been in existence 
 prior to that date and the net income and invested 
 capital of its predecessor for the pre-war period shall 
 be deemed to have been its net income and invested 
 capital. (Sec, 204.) 
 
 [231 
 
Class III. Corporations, Partnerships and Individu- 
 als HAVING NO ENCX)ME, OR HAVING A SUBNORMAL 
 INCOME, DURING THE PRE-WAR PERIOD, SHALL DETERMINE 
 THEIR EXCESS PROFITS AS FOLLOWS: 
 
 If the Secretary of the Treasury, upon complaint, finds 
 that during the pre-war period, a domestic corporation 
 or partnership or a resident or citizen of the United 
 States, had no income or had income which was low as 
 compared with representative concerns engaged in alike 
 business, by deducting from the net income for the 
 taxable year, the sum of (1) an amount equal to the 
 same percentage of its invested capital, for the taxable 
 year, as the average deduction (determined in the same 
 manner as provided for in Class I without including the 
 exemption of $3,000 or $6,000) for the taxable year of 
 representative concerns engaged in like business, is of 
 their invested capital for such year, and (2), in the case 
 of domestic corporations, $3,000 or, in the case of 
 domestic partnerships, or citizens or residents of the 
 United States, $6,000. (Sec. 205.a.) 
 
 Determination by Commissioner 
 
 The percentage of the deduction to invested capital 
 in each trade or business taxable under Class III shall 
 be determined by the Commissioner of Internal Revenue 
 under regulations prescribed by him. In the case of a 
 corporation or partnership which has fixed its own fiscal 
 year as the taxable year, the percentage determined for 
 the calendar year ending during such fiscal year shall 
 be used as the basis. {Sec, 205-a.) 
 
 Procedure for Assessment Under Class III 
 
 The law provides that corporations, partnerships and 
 individuals coming within the provisions of Class III, 
 shall be assessed in the same manner as provided for 
 corporations, partnerships or individuals under Class I. 
 The benefit of the basis of assessment provided under 
 
 [24] 
 
Class III may be claimed only by filing with the Collec- 
 tor of Internal Revenue at the time of filing return for 
 the assessment of the tax, claim for abatement (Form 47) 
 of the amount by which the tax assessed under Class I, 
 exceeds the tax computed upon the basis of assessment 
 provided for under Class III. {Sec. 205-b.) 
 
 For Example: If A. B. C, Inc., had an average pre-war 
 income of $7,000 and average invested capital for the pre-war 
 period of $100,000, the percentage of the invested capital for the 
 taxable year allowed as a deduction, if assessed upon the basis 
 of a corporation falling within Class I, would be 7%. 
 
 If upon determination by the Commissioner of Internal 
 Revenue it is found that the average percentage of deduction 
 of representative concerns engaged in like business was 9%, 
 the corporation, if assessed upon the basis of a corporation 
 falling under Class III, would be entitled to a deduction 
 amounting to 9% of its invested capital. 
 
 In order to receive the benefit of the latter deduction, A. B. 
 C, Inc., will file a return showing the amount of tax due assessed 
 on the basis of the 7% deduction. At the same time this return 
 is filed, a claim for the difference in tax assessed on the basis 
 of 7% and that assessed on the basis of 9% will be filed on 
 Form 47. 
 
 Where claim for abatement is filed, collection of the amount 
 of the tax covered by the claim in abatement will not be made 
 until a decision is rendered on the merits of the claim. If, 
 however, the Commissioner of Internal Revenue deems it 
 advisable, he may require bond for the payment of such tax, 
 and if such bond is not furnished as required, demand payment 
 of the full amount of the tax assessed. If the full amount is 
 collected and the decision on the claim for abatement shows 
 an amount overpaid, such excess payment will bo refunded. 
 {Sec. 205.) 
 
 Class IV. Corporations, Partnerships, or Individ- 
 uals, IN CASES WHERE THE SECRETARY OF TREASURY 
 CANNOT SATISFACTORILY DETERMINE INVESTED CAPITAL, 
 SHALL DETERMINE THEIR EXCESS PROFITS AS FOLLOWS: 
 
 {Sec. 210.) 
 
 The taxable war profits shall be determined by deducting 
 from the net income for the taxable year the sum of (1) 
 
 [25] 
 
an amount equal to the same proportion of the net in- 
 come of the trade or business received during the 
 taxable year as the average deduction (determined in 
 the same manner as provided in case of concerns falling 
 under Class I, without including the $3,000 or $6,000 
 specific exemption) for the same calendar year of repre- 
 sentative concerns engaged in same business, bears to 
 the total net income of the business received by such 
 concerns and (2) in the case of a domestic corporation, 
 $3,000, or in the case of domestic partnership, or a citizen 
 or resident of the United States, $6,000. 
 
 Determination by Commissioner 
 
 The proportion between the deduction of the net in- 
 come in each trade or business shall be determined by 
 the Commissioner of Internal Revenue. In case of a 
 corporation or partnership which has fixed its own fiscal 
 year, the proportion determined for the calendar year 
 ending during such fiscal year, shall be used. 
 
 INVESTED CAPITAL DEFINED 
 
 Domestic Corporations and Partnerships 
 
 In the case of a corporation or partnership, invested capi- 
 tal shall include: 
 
 1. Actual cash paid in. 
 
 2. Actual cash value of tangible property paid in otlier 
 than cash, for stock or shares in such corporation or 
 partnership, at the time of such payment (but in case 
 such tangible property was paid in prior to January 1, 
 1914, the actual cash value of such property as of 
 
 [261 
 
January 1, 1914, but in no case to exceed the par 
 value of stock issued therefor), and 
 
 3. Paid in or earned surplus and undivided profits, 
 used or employed in the business exclusive of undi- 
 vided profits earned during the taxable year. (Sec, 
 207.) 
 
 Patents and Copyrights 
 
 The actual cash value of patents and copyrights paid 
 in for stock or shares of a corporation orjjartnership at 
 the time of such payment, not to exceed the par value 
 of such stock or shares, shall be included as invested 
 capital. (Sec, 207.) 
 
 Intangible Assets 
 
 Good will, trade marks, trade brands, franchises or 
 other intangible property, shall be included as invested 
 capital of a corporation or partnership, if bona fide 
 payment therefor was made in cash or tangible property. 
 The value included shall not exceed the actual cash 
 or actual cash value of the tangible property paid 
 therefor at the time of payment. 
 
 Good will, trade marks, trade brands, franchises, or 
 other intangible property, bona fide purchased prior 
 to March 3, 1917, for and with interests or shares in a 
 partnership, or in the capital stock of the corporation 
 (issued prior to March 3, 1917), in an amount not to 
 exceed on March 3, 1917, 20 per centum of the total 
 shares of the stock of the corporation, shall be included 
 in invested capital. Such value, however, shall not 
 exceed the actual cash value at the time of purchase, 
 and in the case of the issue of stock, shall not exceed the 
 par value of such stock. (Sec. 207.) 
 
 [27] 
 
Residents or Citizens of the United States 
 
 In the case of individuals, residents or citizens of the 
 United States, invested capital shall include: 
 
 1. Actual cash paid into the trade or business; 
 
 2. Actual cash value of tangible property paid into the 
 trade or business, other than cash, at the time of such 
 payment (but in case such tangible property was 
 paid in prior to January 1, 1914, the actual cash value 
 of such property as of January 1, 1914) ; and 
 
 3. The actual cash value of patents, copyrights, good 
 will, trade marks, trade brands, franchises, or other 
 intangible property paid into the trade or business at 
 the time of such payment, if payment was made 
 therefor specifically as such in cash or tangible prop- 
 erty, not to exceed the actual cash or actual cash 
 value of the tangible property bona fide paid there- 
 for at the time of such payment. {Sec, 207.) 
 
 Foreign Corporations and Partnerships and Non-Resident 
 Aliens 
 
 In the case of foreign corporations and partnerships and 
 non-resident aliens, invested capital shall be that pro- 
 portion of the actual invested capital, as defined above, 
 which the net income from sources within the United 
 States bears to the entire net income. (Sec. 207.) 
 
 Monthly Average 
 
 Invested capital for any year means the average in- 
 vested capital for the year, averaged monthly. {Sec. 207.) 
 
 Capital Excluded 
 
 Invested capital does not include stocks, bonds (other 
 than United States Bonds), or other obligations, the 
 
 [28] 
 
income from which is not subject to the Excess Profits 
 Tax. Likewise it does not include money or other 
 property borrowed. {Sec. 207.) 
 
 Reorganization, Consolidation, or Change of Ovmership of 
 Business 
 
 In the case of the reorganization, consolidation or 
 change of ownership of a business after March 3, 1917, 
 if an interest of fifty per centum or more remains in the 
 control of the same persons, partnerships, or corpora- 
 tions, or any of them, no asset transferred or received 
 from the prior business shall be allowed a greater value 
 than would have been allowed such prior business, in 
 determining invested capital, unless such asset was 
 paid for in cash or tangible property, in which case 
 the amount shall not exceed the actual cash or the 
 actual cash value of the tangible property paid therefor 
 at the time of payment. (Sec, 208.) 
 
 RATES OF TAX 
 
 The tax shall be collected on percentages of the net 
 income as follows : (Sec. 201.) 
 
 Rate 
 
 Net Income (in excess of deduction) and not in 
 excess of 15% of the invested capital for the 
 taxable year 20% 
 
 Net income in excess of 15% but not in excess of 
 20% of invested capital 25% 
 
 Net income in excess of 20% but not in excess of 
 of 25% of invested capital 35% 
 
 Net income in excess of 25% but not in excess of 
 33% of invested capital 45% 
 
 Net income in excess of 33% of invested capital 60% 
 
 [291 
 
BUSINESS OR TRADE WITHOUT CAPITAL OR 
 MERELY NOMINAL CAPITAL 
 
 In addition to other taxes, a business or trade having 
 no invested capital or merely a nominal invested capital, 
 shall, in lieu of the excess profits tax, pay a tax of 8% on 
 income derived from such trade or business in excess of 
 $3,000, in the case of a domestic corporation, or of $6,000 
 in the case of a citizen or resident of the United States, or a 
 domestic partnership. (Sec. 209.) 
 
 NET INCOME 
 
 Corporations 
 
 Net income of a corporation shall be determined 
 as follows: (Sec. 206.) 
 
 For the years 1911 and 1912, upon the basis provided 
 for under the Corporation Excise Tax Law, Section 38, 
 Act of Congress, approved August 5, 1909, except that 
 income taxes paid to the United States within such 
 years shall be included. This makes the amounts of net 
 income returned to the Treasury Department for the 
 years of 1911 and 1912, for the purpose of the assessment 
 of the Corporation Excise Tax, plus income taxes paid 
 to the United States, the basis of the pre-war income for 
 the years of 1911 and 1912. 
 
 For the year 1913, upon the basis provided for under 
 the Income Tax Law, Act of Congress, approved Octo- 
 ber 3, 1913 (net income as shown on the Income Tax 
 Return filed for year 1913), except that income taxes 
 paid to the United States shall be included and that 
 dividends from stock of other corporations whose net 
 earnings were subject to tax under the Act of October 3, 
 1913, received by the corporation, shall be deducted. 
 
 [30] 
 
For the taxable year, upon the basis provided for 
 under the Income Tax Law of September 8, 1916, as 
 amended, except that dividends from stock of other 
 corporations, whose net earnings are subject to tax 
 under the Act of September 8, 1916, as amended, re- 
 ceived by the corporation, shall be deducted. 
 
 Partnerships and Individuals 
 
 Net income of a partnership or individual for the pre- 
 war period and taxable year, shall be determined upon 
 the basis provided for under the Income Tax Law of 
 September 8, 1916, as amended, except that the amount 
 received as dividends from the stock of any domestic 
 corporations, whose net income is subject to tax under 
 the Act of September 8, 1916, as amended, shall be de- 
 ducted. {Sec, 206.) 
 
 Deductions Allowed Partnerships 
 
 Domestic Partnerships 
 
 Domestic partnerships shall be entitled to the following 
 deductions from gross income (allowed under Section 5, 
 Subdivision (a) of the Act of September 8, 1916, as 
 amended), in computing net income: 
 
 1. Necessary expenses actually paid in carrying on the 
 business or trade. 
 
 2. Interest paid within the year on indebtedness, except 
 on indebtedness incurred in the purchase of obliga- 
 tions or securities, the interest upon which is exempt 
 from taxation as income. 
 
 3. Taxes paid within the year, other than those as- 
 sessed against local benefits, and excess profits and 
 income taxes. 
 
 [31] 
 
4. Losses actually sustained during the year incurred 
 in the business or trade arising from fires, storms, 
 shipwrecks or other casualty or from theft, when 
 not compensated for by insurance or otherwise. 
 
 5. Debts actually ascertained to be worthless and 
 charged off within the year. 
 
 6. A reasonable allowance for exhaustion, wear and 
 tear of property within the Unite^J States arising 
 out of its use or employment in the l^siness or trade; 
 (a) in the case of oil and gas wqIIs, a reasonable 
 allowance for actual reduction in flow and produc- 
 tion to be ascertained by the settled production or 
 regular flow; (b) in the case of mines, a reasonable 
 allowance for depletion thereof not to exceed the 
 market value in the mine of the product thereof 
 which has been mined and sold during the year for 
 which the return and computation are made. 
 
 Foreign Partnerships 
 
 Foreign partnerships shall be entitled to the following 
 deductions (allowed under Section 6, Subdivision (a) of 
 the Act of September 8, 1916, as amended) from gross 
 income in computing net income: 
 
 1. Necessary expenses actually paid in carrying on any 
 business or trade conducted within the United States. 
 
 2. The proportion of all interest paid within the year on 
 indebtedness which the gross amount of income for 
 the year derived from sources within the United 
 States bears to the entire net income. 
 
 32] 
 
3. Taxes paid within the year imposed under the 
 authority of the United States, or its territories or 
 possessions, or under the authority of any State or 
 subdivision of any State, not including those as- 
 sessed against local benefits or excess profits or 
 income taxes. 
 
 4. Losses actually sustained during the year incurred 
 in business or trade conducted within the United 
 States, and losses of property within the United 
 States arising from fires, storms, shipwrecks, or 
 other casualty and from theft, when such losses are 
 not compensated for by insurance or otherwise. 
 
 5. Debts arising in the course of business or trade 
 conducted within the United States, actually ascer- 
 tained to be worthless and charged off within the 
 year. 
 
 6. A reasonable allowance for exhaustion, wear and 
 tear of property within the United States arising 
 out of its use or employment in the business or 
 trade; (a) in the case of oil and gas wells, a reasonable 
 allow^ance for actual reduction in flow and produc- 
 tion to be ascertained by the settled production or 
 regular flow; (b) in the case of mines, a reasonable 
 allowance for depletion thereof not to exceed the 
 market value in the mine of the product thereof, 
 which has been mined and sold during the year for 
 which the return and computation are made. 
 
 RETURNS 
 
 Partnerships. Every foreign partnership having a net 
 income of $3,000 or more for the taxable year, and 
 every domestic partnership having a net income of 
 
 [33] 
 
$6,000 or more for the taxable year, must file a return of 
 the income of the trade or business for the taxable year, 
 setting forth specifically the gross income for the year 
 and the deductions permitted under the law. {Sec, 
 211.) 
 
 The return shall be filed in the form prescribed by tlie 
 Commissioner of Internal Revenue on or before March 
 1 of each year for the preceding calendar year, with the 
 Collector of Internal Revenue for the district in which 
 the oflSce of the partnership or individual is located, 
 or in which the individual resides. (Act September 8, 
 1916.) 
 
 Fixing Fiscal Year. A corporation or partnership may 
 fix its own fiscal year as the taxable year. {Sec, 200.) 
 
 If a corporation or partnership prior to March 1, 
 1918, makes a return covering its own fiscal year, and 
 includes therein the income received during that part 
 of the fiscal year falling within the year 1916, the tax 
 for the year 1917 shall be that proportion of the tax 
 computed upon the excess profits during such fiscal 
 year which the time from January 1, 1917, to the end 
 of such fiscal year, bears to the full fiscal year. {Sec, 200.) 
 
 TAX LAW REPEALED 
 
 The Excess Profits Tax Law, Title 2, Act of March 3, 
 1917, is repealed. 
 
 Any amount which has been or hereafter may be paid 
 on account of the tax as imposed under the excess profits 
 tax law of March 3, 1917, shall be credited toward the pay- 
 ment of the tax imposed by this law, but if the amount so 
 paid exceeds the amount due under this law, the excess 
 shall be refunded. {Sec. 214.) 
 
 [34] 
 
REGULATIONS OF THE COMMISSIONER OF 
 INTERNAL REVENUE 
 
 The Commissioner of Internal Revenue, with the ap- 
 proval of the Secretary of the Treasury, is authorized to 
 make all necessary regulations for carrying out provisions 
 of this law and may require the production of facts and 
 data necessary for the collection of the tax. (Sec. 213.) 
 
 ADMINISTRATIVE AND GENERAL PROVISIONS 
 OF THE LAW 
 
 All administrative, special and general provisions of 
 the law, including the laws in reJation to the assessment, 
 remission, collection and refund of internal revenue taxes 
 not inconsistent with the provisions of this law, and like- 
 wise all provisions of the Income Tax Law relating to 
 returns and payment of the tax imposed, including pro- 
 visions relating to penalties, are made applicable to taxes 
 required by this law. (Sec. 212.) 
 
 [3.5] 
 
* Facilities Furnished by Public Utilities 
 
 (Effective November 1, 1917) 
 
 TAX 
 
 Express 
 
 From point in U. S. to another in U. S. (Sec, 500.) 
 
 — per each 20c. paid therefor $ . 01 
 
 Freight 
 
 From point in U. S. to another in U. S. {Sec, 
 500.) — on amount paid therefor 3% 
 
 *Note: Tax imposed hereunder: 
 
 (1) Shall be paid by peraon pajang for service. (Sec. 
 501.) 
 
 (2) On Transportation, shall be paid by carrier who 
 ships own property for which no pay is received, the same 
 as if transportation charges were received, to be deter- 
 mined on basis of tariff of other carriers, if carrier who 
 receives transportation has no tariff on file on May 1, 
 1917. (Sec. 501.) 
 
 Shall not be applicable to transportation of commodi- 
 ties necessary for the use of the carrier in the conduct of 
 its business; or to transportation of company material 
 transported by one carrier, which constitutes a part of the 
 railroad system, for another carrier which is also a part 
 of the same system. (Sec. 501.) 
 
 (3) Shall not be applicable to service rendered to the 
 United States or any State, Territory or the District of 
 Columbia, the right to exemption to be evidenced in 
 such manner as the Commissioner of Internal Revenue 
 may prescribe. (Sec. 502.) 
 
 (4) Shall be collected, and paid to the Collector of 
 Internal Revenue, by person or corporation receiving 
 payment for service, under regulations prescribed by the 
 Commissioner of Internal Revenue in accordance with 
 monthly returns filed in duplicate by such person or 
 corporation. (Sec. 503.) 
 
 (36] 
 
fPASSENGER FaRES TAX 
 
 From point in U. S. to another or to any point 
 in Canada or Mexico, exclusive of commutation 
 tickets or season tickets less than 30 miles, or 
 transportation costing not to exceed 85c, {Sec, 
 500.) — on amount paid therefor 8% 
 
 Pipe Line 
 
 For the transportation of oil by pipe line (Sec, 
 500.) — on amount paid therefor 5% 
 
 fSEATS, Berths or Stateroom Tickets, in Sleeping 
 or Parlor Cars or on Vessels (Sec. 500.) — on 
 amount paid therefor 10% 
 
 Telegraph, Telephone or Radio dispatches and 
 messages, originating within the U. S., each mes- 
 sage or dispatch of 15c. or more. (Only one 
 payment required on each). (Sec. 500.) — on 
 amount paid therefor $.05 
 
 fTickets, not partially used, or mileage books purchased 
 prior to November 1, 1917, and fares paid by cash on train, are 
 subject to tax and tax will be collected by conductor or agent 
 to whom presented. (Sec. 500.) 
 
 [S7] 
 
Beverages'* 
 
 Existing War Total 
 Tax Tax Tax 
 
 Ale (See Fermented Liquors), per bbl. $1.50 $1.50 $3.00 
 
 Beer (See Fermented Liquors), per bbl. 1.50 1.50 3.00 
 
 Carbonic Acid Gas, in drums or other con- 
 tainers intended for use in manufacture of 
 carbonated water and soft drinks, per lb.; 
 (SecSU): .05 
 
 Tax shall be paid by purchaser to vendor and by him 
 returned and paid to U. S. 
 
 Champagnes {See Wines) 
 
 Cordials and Liqueurs, per each one- 
 half pint; (Sec, 309): .01 J .Ol| .03 
 *NoTEs: Manufacturers, producers, bottlers or 
 importers are required to make monthly returns 
 to the Collector of Internal Revenue for the dis- 
 trict in which are located their principal places 
 of business, containing information necessary for 
 the assessment of taxes. (Sec. 314.) 
 
 Commissioner of Internal Revenue is author- 
 ized to discontinue use of the following stamps: 
 Distillery warehouse, special bonded warehouse, 
 special bonded re-warehouse, general bonded 
 warehouse, general bonded retransfer, transfer 
 brandy, export tobacco, export cigars, export 
 oleomargarine, and export fermented liquor 
 stamps. (Sec. 305.) 
 
 Unless otherwise stated, taxes are effective 
 October 4, 1917, the day following the enact- 
 ment of the law. (Sec. 1302.) 
 
 The installation of meters, tanks, pipes or 
 other apparatus by distilleries, etc. may be re- 
 quired by the Commissioner of Internal Revenue 
 for the purpose of protecting the revenue. In- 
 stallation shall be at the expense of the distillery 
 and, the business shall be discontinued in case 
 of refusal or neglect to make such installation. 
 (Sec. 306.) 
 
 [38] 
 
Existing War Total 
 Tax Tax Tax 
 
 Cordials and Liqueurs in excess of 25 gallons, 
 upon which existing tax has been paid, held 
 for sale on October 3, 1917; per each one- 
 half pint; {Sec, 310): $.0l| 
 
 Distilled Spirits 
 
 In bond, produced, or imported per proof 
 
 gal., or per wine gal. when below proof, 
 
 (fractional parts proportionately) ; (Sec. SOO) : 
 For other than beverage purposes $1.10 1.10 $2.20 
 
 For beverage purposes 1.10 2.10 3.20 
 
 Spirits in excess of 50 gals, held for sale by 
 
 retailers, on October 3, 1917, upon which 
 
 existing tax has been paid, per gal. (frac- 
 tional parts proportionately) ; (Sec. 303) : 
 
 For other than beverage purposes 1.10 
 
 For beverage purposes 2.10 
 
 Spirits held for sale on October 3, 1917, by 
 
 others than retailers (except in custody of 
 
 court of bankruptcy) — per gal. (fractional 
 
 parts proportionately); (Sec, 303): 
 For other than beverage purposes 1.10 
 
 For beverage purposes 2.10 
 
 Spirits for beverage purposes, shall not be imported 
 into the U. S. from any foreign country, the West 
 Indian Islands acquired from Denmark (unless pro- 
 duced from products grown therein), Porto Rico or 
 the Philippines. (Sec. 301.) 
 
 Packages may be filled or spirits transferred after pay- 
 ment of tax, without being entered in bonded warehouse, 
 under regulations prescribed by the Commissioner of 
 Internal Revenue. (Sec. 302.) 
 
 Tax on spirits in the custody of a court of bank- 
 ruptcy on June 1, 1917, shall be paid by the person to 
 whom the court delivers same, at the time of delivery, to 
 the extent that the amount delivered exceeds 50 gals. 
 (Sec. 303.) 
 
 The manufacture, warehousing, withdrawal and ship- 
 ment of ethyl alcohol for domestic use, or for denatura- 
 tion, and denatured alcohol, may be exempted from 
 the prohibition against Sunday operations, under pre- 
 scribed regulations; and, similarly, manufacturers there- 
 of, for other than beverage purposes, may be granted 
 permission to fill fermenting tubs in a sweet mash dis- 
 tillery not oftener than once in forty-eight hours. 
 (Sec. 303.) 
 
 [39 J 
 
Existing War Total 
 Tax Tax Tax 
 
 Extracts (See Syrups and Extracts) 
 
 Fermented Liquors | 
 
 Beer, lager beer, ale, porter, and similar 
 
 fermented liquors (containing }4% or more 
 
 alcohol), per bbl. containing not in excess of 
 
 31 gallons and at a like rate for any other 
 
 quantity or fractional parts; (Sec, S07): $1.50 $1.50 $3.00 
 
 Taxable fermented liquors may be removed without 
 . ayment of tax from brewery to contiguous industriar 
 distillery to be used as distilling material, and residue. 
 
 payment of tax from brewery to contiguous industrial 
 distilleiy to be used as distilling material, and residue, 
 containing less than i% alcohol, which is to be used 
 
 in making beverages, may be manipulated on distillery 
 premises or elsewhere. Removal is subject to regula- 
 tions of the Commissioner of Internal Revenue. (See. 
 308.) 
 
 Grape Brandt or Wine Spirits 
 
 Withdrawn for the fortification of sweet 
 wine, per proof gal. (fractional parts propor- 
 tionately); (Sec. 311): .10 .20 .30 
 Used in the fortification of sweet wines 
 held for sale October 3, 1917, per proof 
 gallon (fractional parts proportionately); 
 (SecSn): .10 
 Withdrawn for the purpose of fortifying 
 sweet wines, but not used prior to October 
 3, 1917, per proof gallon (fractional parts 
 proportionately); (Sec. Sl^): .20 
 
 Grape Juice (See Unfermented Grape 
 Juice), per gal. .01 
 
 Ginger Ale (See Unfermented Grape Juice) , 
 per gal. .01 
 
 Lager Beer (See Fermented Liquors), per 
 
 bbl. 1.50 1.50 3.00 
 
 Liqueurs (See Cordials) 
 
 Perfumes, containing distilled spirits, im- 
 ported into U. S., per wine gal. (fractional 
 
 parts proportionately) ; (Sec. SOO): 1.10 
 
 Tax to be collected by collector of customs and de- 
 posited as internal revenue collections. 
 
 [40] 
 
EziBtiii« War Total 
 Tax Tax Tax 
 
 Pop (See Unfermented Grape Juice), per 
 
 gal. $.01 
 
 Porter (See Fermented Liquors), per bbl. $1.50 1.50 $3.00 
 
 Rectified Spirits (in possession of rectifier 
 on October 3, 1917, or thereafter rectified) 
 per proof gal. (fractional parts proportion- 
 ately); (Sec. S04>): .15 
 
 Does not apply to gin produced by the re-distilla- 
 tion of a pure spirit over juniper berries and other 
 
 aromatios; nor to cordials and liqueurs subject to tax 
 
 under Act of Sept. 8, 1916; nor to certain blends of wines 
 
 and whiskies. (Sec. 304.) 
 
 Violations of Sec. 304 punishable by fine not less than 
 
 $250 or more than $1,000 or imprisonment not more than 
 '; two years, together with assessment of double the tax 
 I evaded, together with tax to be collected by assessment 
 ' or on any bond given. (Sec. 304.) 
 
 Exchange of wholesale liquor dealers' stamps for stamps 
 
 for rectified spirits is discontinued unless package is to 
 
 be broken into smaller packages. (Sec. 305.) 
 
 Root Beer (See Unfermented Grape Juice) 
 
 per gal. .01 
 
 Sarsaparilla (See Unfermented Grape 
 Juice) per gal. .01 
 
 Soft Drinks (See Unfermented Grape 
 Juice) per gal. .01 
 
 Sweet Wines (See Grape Brandy) 
 
 Strups and Extracts, for use in manufac- 
 ture of soft drinks. (Sec. 313-a) 
 
 If sold for not more than $1.30 per gal. .05 
 
 If sold for more than $1.30 per gal. and 
 
 not for more than $2.00 per gal. .08 
 
 If more than $2.00 per gal. and not more 
 
 than $3.00 per gal. .10 
 
 If more than $3.00 per gal, and not more 
 
 than $4.00 per gal., per gal. .15 
 
 If more than $4.00 per gal. .20 
 
 [41] 
 
Existing War Total 
 Tax Tax Tax 
 
 Unfermented Grape Juice, soft drinks, arti- 
 ficial mineral waters (not carbonated), and 
 fermented liquors containing less than J^ 
 per centum of alcohol, sold by the manufac- 
 turer, producer or importer in bottles or 
 closed containers, and ginger ale, root beer, 
 sarsaparilla, pop or other carbonated waters 
 or beverages, manufactured or sold by the 
 manufacturer, producer or importer of car- 
 bonic acid gas used in carbonating same, 
 (Sec. 313-b) per gal. ••01 
 
 Vermuth {See Wines) 
 
 Waters — natural, mineral or table waters, 
 sold in bottles or other closed containers at 
 over 10c. per gal. (Sec, 313) per gal. .01 
 
 Artificial mineral Water (not carbonated) 
 or Carbonated Waters (Sec. 813-b) per 
 gal. .01 
 
 Wines 
 
 Still wines* (including vermuth, artificial 
 o'. imitation wines or compounds sold as ^ 
 
 still wine), in bond, produced, or imported, 
 per wine gallon (fractional parts proportion- 
 ately); (Sec. 309): 
 
 Containing not more than 14 per cent. 
 
 alcohol $.04 .04 $.08 
 
 Containing more than 14 per cent alcohol 
 
 and not more than 21% alcohol .10 .10 .«0 
 
 Containing more than 21% and not 
 
 more than 24% alcohol .25 .25 .50 
 
 ^Wineflover 24% alcohol olaaaed as distilled tpirita and 
 taxed acoordinsly. 
 
 [42] 
 
Existing War Total 
 Tax Tax Tax 
 
 Still Wines in excess of 25 gals, held for sale 
 on October 3, 1917, upon which existing 
 tax has been paid, per wine gallon (frac- 
 tional parts proportionately); (Sec. 810): 
 
 Containing not more than 14% alcohol $.04 
 
 Containing more than 14% alcohol 
 
 and not more than 21% alcohol .10 
 
 Containing more than 21% and not 
 
 more than 24% alcohol .25 
 
 Champagne and sparkling wines, in bond, 
 produced or imported per 3^ pt. or fraction 
 theredf (Sec. 309) $.03 .03 $.06 
 
 Champagne and sparkling wines in excess 
 of 25 gals, held for sale on October 3, 1917, 
 upon which existing tax has been paid, per 
 ^2 pt. or fraction thereof (Sec, 310) .03 
 
 Artificially carbonated wines in bond, pro- 
 duced or imported, per J^ pt. or fraction 
 thereof (/Sec. 309) .01^ .OlJ .03 
 
 Artificially carbonated wines in excess of 25 
 gals, held for sale on October 3, 1917, upon 
 which existing tax has been paid, per 3^ pt 
 or fraction thereof (Sec. 310) .01^ 
 
 [431 
 
Cigars, Cigarettes and Tobacco 
 
 g-k ^ /o At\i\\ Existing War Total 
 
 Cigars {Sec, 400) Tax Tax Tax 
 
 Manufactured, sold or removed for con- 
 sumption. (Effective 30 daj's after passage 
 of this Act.) (Sec. 402): 
 
 Weighing not more than 3 lbs. per 1,000; 
 
 per 1,000 (iSec. 400-a) % .75 $ .25 $1.00 
 
 Weighing more than 3 lbs. per 1,000: 
 
 Retailing at 4c each or more but not more 
 
 than 7c each, per 1,000 (Sec. 400-b) 3.00 1.00 4.00 
 
 Retailing at more than 7c each but not 
 
 more than 15c each per J, 000 (Sec. 
 
 400-c) 3.00 3.00 6.00 
 
 Retailing at more than 15c each but not 
 
 more than 20c each per 1,000 (Sec, 400-d) 3.00 5.00 8.00 
 
 Retailing at more than 20c each {Sec, 
 
 400.e) 3.00 7.00 10.00 
 
 Amount in excess of 1,000 held for sale on 
 
 the day after the passage of this Act, 
 
 or removed from factory or custom house 
 
 after the passage of this Act but prior to 
 
 the effective date, upon which the existing 
 
 tax has been paid. \Sec, 403) : 
 
 Weighing not more than 3 lbs. per 1,000; 
 
 per 1,000 .12^ 
 
 Weighing more than 3 lbs. per 1,000; 
 
 Retailing at 4c or more but not more than 
 
 7c each, per 1,000 .50 
 
 Retailing at more than 7c each, but not 
 
 more than 15c each, per 1,000 1.50 
 
 Retailing at more than 15c each, but not 
 
 more than 20c each, per 1,000 2.50 
 
 Retailing at more than 20c each S.50 
 
 The word "retail" as used in regard to cigars means 
 the ordinary retail, price of a single ci^ar, and the 
 Commissioner of Internal Revenue may require manu- 
 facturers or importers to affix to each box a conspicu- 
 ous label indicating by letter the clause and section 
 under which the cigars therein contained have been 
 tax-paid. (Sec. 400.) 
 
 [44] 
 
Existing War ToUl 
 Tax Tax Tax 
 
 Cigarette Papers and Tubes (Sec. 404) 
 
 Papers in packages, books or sets containing: 
 y Over 25 papers but not over 50 papers $.005 
 
 r Over 50 papers but not over 100 papers .01 
 
 I More than 100 papers, for each 100 papers 
 
 or fractional part thereof .01 
 
 Tubes — per 100 or fraction thereof M 
 
 Cigarettes* (Sec. 400) 
 Manufactured in or imported into the 
 United States. (EflFective 30 days after 
 passage of this Act.) (Sec, 402) : 
 
 Weighing not more than 3 lbs. per 1,000, 
 per 1,000 $1.25 $ .80 2.05 
 
 Weighing more than 3 lbs. per 1,000, per 
 I 1,000 {Sec. 400-f) 3.60 1.20 4.80 
 
 Amount in excess of 1,000 held for sale 
 on the day after the passage of this 
 Act, or removed from factory or custom 
 house after the passage of this Act but 
 prior to the efiPective date, upon which the 
 I existing tax has been paid. (Sec. 402) : 
 i Weighing not more than 3 lbs. per 1,000, 
 
 per 1,000 .40 
 
 i Weighing more than 3 lbs. per 1,000, 
 I per 1,000 .60 
 
 Cigarettes (including small cigars weighing not 
 more than 3 lbs. per 1,000) shall be put up in pack- 
 ages containing 5, 8, 10, 12, 15, 16, 20, 24, 40, 50, 80, 
 or 100, and manufacturers shall affix and cancel stamps 
 denoting payment of tax; cigarettes imported shall be 
 stamped and stamps cancelled, in addition to import 
 stamps, before withdrawn. (Sec. 400-f.) 
 
 ♦Between the dates of October 3, 1917, and Novem- 
 ber 2, 1917, all cigarettes, manufactured tobacco and 
 snuff may be put up in either the packages as 
 provided for by the existing law or as provided for 
 m this Act. (Sec. 402.) 
 
 [45] 
 
Existing War 
 Tax Tax 
 
 Tobacco and Snuff* (Sec. 401) 
 
 Manufactured, sold or removed for con- 
 sumption. (Effective 30 days after passage 
 of this Act.) per lb. (Sec, 402) $.08 $.05 
 
 Amount in excess of 100 lbs. held for sale 
 on the day after the passage of this 
 Act, or removed from factory or custom- 
 house after the passage of this Act but 
 prior to the effective date, upon which 
 the existing tax has been paid, per 1,000 
 (Sec. 403) .02| 
 
 In addition to packages now provided for under 
 existing law, tobacco and snuff may be put up in the 
 followinK wtee: H, H, %, H, IH, IH. IH. 1^. and 
 5 ounces. (Sec. 401.) 
 
 ♦Retwnen the dat«8 of October 3, ini7, and 
 Noverobet 2, 1017, all cigarettes, nnanufa'^ttired , 
 
 tobai-co and .-^nuff may be put up in either the pack- 
 ages as provided for by the existing law or as pro- 
 vided for in this Act. (Sec. 402.) 
 
 [46] 
 
Stamp Taxes 
 
 Under Schedule A* 
 
 TAX 
 
 Agreements (See Capital Stock; Produce). 
 Bill of Sale (See Capital Stock; Produce). 
 
 *NoTE : Penalty for illegally using, removing, buying* 
 selling, or destroying any stamp, die plate or impres- 
 sion thereof, is fine not to exceed $1,000 or imprison- 
 ment not to exceed five years, or both. (Sec. 803.) 
 
 Penalty for signing or issuing any instrument or other 
 paper; consigning or shipping any article by parcel 
 post; manufacturing, importing or selling any playing 
 cards without the full amount of tax being paid, or 
 using an adhesive stamp without cancelling it, is fine 
 not to exceed $100 for each offense. (See. 802.) 
 
 Person using stamps shall cancel same by writing 
 or stamping initials of name and date. (Sec. 804.) 
 
 Stamps are on sale by several collectors of internal 
 revenue, postmasters, assistant treasurers and desig- 
 nated depositories of the United States. (Sec. 806 
 and 807.) 
 
 Bonds, notes or other instruments issued by the 
 United States or by any foreign government or by any 
 State, Territory, or the District of Columbia, or local 
 subdivision thereof; or stocks and bonds issued by 
 cooperative building and loan associations operating 
 exclusively for the benefit of their members and making 
 loans only to their shareholders; or by mutual ditch 
 or irrigation companies; shall not be subject to tax. 
 (Sec. 801.) 
 
 Laws relating to the assessment and collection of 
 taxes are extended to and made a part of this law for 
 the purposes of collecting stamp taxes. (Sec. 805.) 
 
 Taxes are effective on and after December 1, 1917. 
 (Sec. 800.) 
 
 Bonds, Debentures, or Certificates of Indebt- 
 edness, issued on or after December 1, 1917, 
 on each $100 or fraction of amount of Bond. $.05 
 
 Renewals are taxed aa new issues. 
 
 When bond is conditioned for payment of money in a penal sum 
 greater than the debt secured, the tax shall be on the amount 
 seoured. 
 
 [471 
 
TAX 
 
 Bonds, Indemnity and Surety (except in legal 
 proceedings and reinsurance) , (Sec. 2) , each $ . 50 
 
 Where premium is charged per $1.00 premium 
 or fraction . 01 
 
 Capital Stock, Issue 
 
 With par value, each $100 face value or fraction . 05 
 
 Without par value, actual value $100 or less, 
 each share .05 
 
 Without par value, actual value over $100, each 
 $100 or fraction .05 
 
 Stamps to be attached to stock boolcs. 
 
 Capital Stock, sales or transfers type. 
 
 With par value, each $100 face value or fraction .09 
 Without par value, actual value $100 or less, each 
 share .02 
 
 Without par value, actual value in excess of $100 
 per share, each $100 or fraction .02 
 
 Deposit of certificates as collateral not taxable. 
 
 Deliveries to brokers for sale or by brokers on account of 
 purchase not taxable. 
 
 Stamps shall be affixed to — a. Transfer books where shown 
 only on books; b. Certificate where transfer is by certificate; 
 c. Bill of sale where certificate deUvered in blank. 
 
 Penalty for violation: fine not exceeding $1,000. imprisonment 
 not exceeding 6 months, or both. 
 
 Certificates of Indebtedness (See Bonds of In- 
 debtedness). 
 
 Checks, not payable at sight or on demand 
 (See Drafts and Checks). 
 
 Conveyances of Real Estate, by deed, instru- 
 ment, or writing, (not to secure debt,) on considera- 
 tion less encumbrances assumed by purchaser: 
 Exceeding $100, not in excess of $500 .50 
 
 Each additional $500 or fraction thereof .50 
 
 48] 
 
TAX 
 
 Deeds (See Conveyances) 
 
 Drafts or Checks not payable at sight or on de- 
 mand, per each $100 or fraction thereof $ . 02 
 
 Entry of Merchandise at Custom House — on 
 value of merchandise: 
 
 Not exceeding $100 .25 
 
 Exceeding $100 and not exceeding $500 .50 
 
 Exceeding $500 1.00 
 
 Entry, for withdrawal of merchandise from customs 
 bonded warehouse .50 
 
 Memorandum of Sale (See Capital Stock; Produce). 
 
 Notes (See Promissory Notes). 
 
 Parcel Post Packages — for each 25c or fraction 
 for transportation charged on packages upon 
 which the charge is 25c. or more, to be paid by 
 consignor .01 
 
 No package shall be transported unless stamps are attached. 
 
 Passage Ticket, one way or round trip transpor- 
 tation by vessels from U. S. to destination not 
 in the U. S., Canada or Mexico: 
 
 Not exceedmg $30 1.00 
 
 Exceeding $30 and not exceeding $60 3.00 
 
 Exceeding $60 5.00 
 
 Tickets not in excess of $10 — exempt. 
 
 Playing Cards, pack containing not over 54 cards, 
 in addition to existing tax (Effective October 3, 
 1917) .05 
 
 Power of Attorney, except for use in Government 
 pension^, or in bankruptcy cases . 25 
 
 Promissory Notes (except bank notes issued for 
 circulation), and each renewal of the same, per 
 each $ 1 00 or fraction thereof . 02 
 
 [49] 
 
TAX 
 
 Produce, sales of, on exchange on each $100 in 
 value or fraction thereof $.02 
 
 Stamps shall be attached to bill or agreement of sale which 
 shall show date of sale, name of seller, amount of sale, and the 
 matter to which it refers. 
 
 Transfer of contracta to a clearing house for the purpose of ad- 
 justinj; accounts, provided no l)eneficial interest is passed to such 
 clearing house, is not subject to tax. 
 
 Sales for immediate deHvery not taxable. 
 
 Penalty for violation: fine not exceeding $1,000, or imprison- 
 ment not exceeding 6 months, or both. 
 
 Proxies, except for use in religious, educational, 
 charitable, fraternal or literary societies or 
 public cemeteries. .10 
 
 Sales (See Capital Stock; Conveyances; Produce). 
 
 Transfers {See Capital Stock). 
 
 [60] 
 
Estates 
 
 The amendment to the Federal estates tax law materially 
 increases the rates of tax. All other provisions of the law 
 of September 8, 1916, as amended by the Act of March 
 3, 1917, remain in full force and effect, unchanged. (Sec, 
 900.) 
 
 The following schedule shows the rates effective on 
 estates of decedents dying on and after October 3, 1917. 
 
 Net Estate after Rate of Rate of Rate of 
 
 Specific Exemption Existing Additional Total Amt. of 
 
 of $25,000 Tax Tax Tax Tax 
 
 Next $ 50,000 1^% ^% 2% $ 1,000 
 
 100,000 3 % 1 % 4% 4,000 
 
 100,000 4H% 13^% 6% 6,000 
 
 200,000 6 % 2 % 8% 16,000 
 
 550,000 73^% 23^% 10% 55,000 
 
 " 1,000,000 9 % 3 % 12% 120,000 
 
 " 1,000,000 10J^% 33^% 14% 140,000 
 
 " 1,000,000 12 % 4 % 16% 160,000 
 
 " 1,000,000 133^% 43^% 18% 180,000 
 
 " 3,000,000 15 % 5 % 20% 600.000 
 
 " 2,000,000 15 % 7 % 22% 440,000 
 
 In excess of 
 
 $10,000,000 15 % 10 % 25% 
 
 The additional tax imposed shall not apply to the trans- 
 fer of the estate of a decedent, dying wliile serving in the 
 military or naval forces of the United States, during the 
 war in which the United States is now engaged, or dying 
 from injuries received or disease contracted in the service 
 within one year after the termination of the war. {Sec, 
 901.) 
 
 51] 
 
Manufactures 
 
 TAX 
 
 Taxes on following articles are to be paid 
 
 BY users: 
 Boats (See Yachts) 
 Motor Boats 
 
 Not over 5 net tons with fixed engines. 
 
 (Sec. 603) per year $5.00 
 
 Over 5 net tons with fixed engines {See 
 
 Yachts) 
 
 Yachts, pleasure boats, power boats, motor 
 boats with fixed engines, and sailing boats, 
 of over 5 net tons, not used exclusively for 
 trade or national defense nor built according 
 to plans approved by the Navy Department 
 (Sec. 603) 
 
 *Length not over 50 feet, per foot " ** .50 
 
 Length over 50 feet, not over 100 feet, per 
 foot " " 1.00 
 
 Length over 100 feet, per foot " " 2.00 
 
 ♦In determining the length, the measurement over 
 all length shall govern. 
 
 Note: Tax payable by user on day Act 
 takes effect, or at the time of purchase of new 
 boat, and thereafter on the first day of each July. 
 
 In case of tax on boat purchased on date other 
 than July 1, the tax shall be the same number 
 of twelfths of the amount as the remaining 
 months prior to the following July 1, including 
 the month in which purchased. (Sec. 603.) 
 
 [52 
 
TAX 
 
 Taxes on following akticles are to be 
 paid by the manufacturer, producer, 
 OR importer: 
 
 Automobiles, automobile trucks, automobile 
 wagons, and motorcycles. {Sec. 600), on 
 selling price 3% 
 
 Cameras (Sec, 600) on selling price 3% 
 
 Chewing Gum, or substitute therefor {Sec, 
 
 600), on selling price 2% 
 
 Films, Moving picture, unexposed {Sec, 600), 
 
 per linear foot $.0025 
 
 Films, Moving picture, positive, containing 
 picture ready for projection {Sec, 600), per 
 linear foot .005 
 
 Jewelry, real or imitation {Sec. 600), on sell- 
 ing price 3% 
 
 Note: Tax attaches to articles sold by manu- 
 facturer, producer or importer. Each manu- 
 facturer, producer or importer shall make monthly 
 returns and pay taxes imposed under Section 600 
 to Collector of Internal Revenue for District in 
 which principal place of business is located, under 
 regulations prescribed by Commissioner of In- 
 ternal Revenue. (Sec. 601.) 
 
 If any of the above articles named, except mov- 
 ing picture films, are held for sale on October 3, 
 1917, by any person other than a retailer, who 
 is not a wholesaler, or the manufacturer, pro- 
 ducer, or importer, a tax, equivalent to one-half 
 of the above rates, shall be paid by the person 
 holding same. (Sec. 602.) Such person shall 
 make return and pay tax within 30 days after the 
 passage of this Act. (Sec. 1002.) 
 
 Tax does not attach to articles sold and deliv- 
 ered prior to May 9, 1917, where title is reserved 
 in vendor as security for payment of purchase 
 price. (Sec. 602.) 
 
 [53] 
 
TAX 
 
 Patent Medicines, pills, tablets, powders, 
 tinctures, troches, or lozenges, syrups, medi- 
 cinal cordials or bitters, anodynes, tonics, 
 plasters, liniments, salves, ointments, pastes, 
 drops, waters (not otherwise taxed under 
 Section 813), essences, spirits, oils and all 
 medicinal preparations, compounds, or com- 
 positions and other patent or proprietary 
 medicines or remedies {Sec, 600), on selling 
 price 2% 
 
 Piano players, graphophones, phonographs 
 and talking machines {Sec, 600), on selling 
 price S% 
 
 Records, for player pianos, graphophonea, 
 phonographs, talking machines or musical 
 instruments {Sec, 600), on selling price S% 
 
 Sporting Goods and Games, tennis racquets, 
 golf clubs, baseball bats, lacrosse sticks, 
 balls of all kinds, including baseballs, foot- 
 balls, tennis, golf, lacrosse, billiard, and pool 
 balls, fishing rods, reels and lines, billiard 
 and pool tables, chess and checker boards 
 and pieces, dice, games and parts of games 
 except playing cards and children's toys 
 and games {Sec. 600), on selling price 3% 
 
 Toilet Articles, perfumes, cosmetics, 
 essences, toilet waters, extracts, vaselines, 
 petroleums, hair oils, pomades, tooth and 
 month washes, dentrifices, aromatic cachous, 
 tooth pastes, hair restorers, dj^es and dress- 
 ings, toilet soaps and powders and similar 
 sul^stances used for toilet purposes {Sec, 
 600) , on selling price 2% 
 
 [54] 
 
Insurance 
 
 (Effective November 1, 1917.) 
 
 TAX 
 
 Life Insurance (except policies for reinsurance, and 
 except Industrial policies of $500 or less on week- 
 ly payment plan, upon which tax shall be 40% of 
 first premium). {Sec. 504) — per $100 or fraction 
 thereof of policy $.08 
 
 Marine, Inland or Fire Insurance (except policies 
 for reinsurance). (Sec. 504) — per $1.00 or fraction 
 thereof of premium . 1 
 
 Casualty Insurance (except life, marine and fire, 
 and except policies for reinsurance). (Sec» 
 504) — per $1 .00 or fraction thereof of premium . 1 
 
 Note : All policies of insurance issued by a person, cor- 
 poration or organization, exempt from Federal Income 
 Tax. shall be exempt from taxes imposed by this law. 
 (Sec. 504.) 
 
 Persons receiving pay for issuing insurance policies 
 shall make return during the first 15 days of each month 
 and pay tax to Collector of Internal Revenue. (Sec. 505.) 
 
 1551 
 
Admissions to Places of Amusements 
 
 TAX 
 
 Admissions (EfiFective November 1, 1917). {Sec. 700.) 
 Persons over 12 years paying admission, except 
 where maximum charge is 5c, per each 10c or 
 fraction. $ . 01 
 
 Persons, admitted free, except employees, children 
 under twelve years, and oflBcers on oflBcial business, 
 per each 10c charged for similar admissions. {Sec, 
 700.) .01 
 
 Children under 12 years, where admission is 
 charged — per admission. {Sec. 700.) .01 
 
 Cabarets or similar entertainments to which the 
 charge for admission is wholly or in part included 
 in the price paid for refreshment, service or mer- 
 chandise, the amount to be computed by rules 
 established by the Commissioner of Internal 
 Revenue, per each 10c thereof . 01 
 
 Boxes or Seats, for permanent use, on the amount 
 for which a similar box or seat is sold for per- 
 formance at which the box or seat is used or 
 reserved 10% 
 
 Note: No tax shall be levied where all the proceeds 
 of which inure to the benefit of religious, educational, or 
 charitable organizations or institutions, or admissions 
 to agricultural fairs. 
 
 No tax to be imposed in the case of a place the 
 maximum charge for which is five cents; nor in the case 
 of a moving picture and certain other shows the 
 maximum charge for which is ten cents; nor in the case 
 of admissions to outdoor amusement parks. 
 
 Admission includes seats and tables, reserved or 
 otherwise, and other similar accommodations, and the 
 charges made therefor. 
 
 Persons or organizations receiving payments of admis- 
 sions, or admitting persons free, shall collect taxes from 
 persons paying admissions, make monthly reports, and 
 pay the sums collected to Collector of Intemsd Revenue. 
 (Sec. 702.) 
 
 [66j 
 
Postal Rates 
 
 First Class Matter (Effective 30 days after 
 passage of Act): 
 
 Three cents per ounce or fraction, except drop 
 letters of first class 2c per ounce or fraction. 
 (Sec, 1100.) 
 
 Postal cards or private mailing cards one cent in 
 addition to existing rate. 
 
 Note: During the present war, letters written and 
 mailed by soldiers, sailors and marines while assigned to 
 duty in a foreign country, may be mailed without 
 postage. 
 
 For the purpose of determining the rate of postage, 
 publishers are required, with the first mailing of each 
 issue, to file with the postmaster a copy of such issue 
 together with a statement of such imformation as may 
 be prescribed by the Postmaster General. 
 
 Second Class Matter 
 
 On Portion of Publication Devoted to Adver- 
 tising, in cases where over five per centum of 
 publication is devoted to advertising: 
 
 
 July 1, 1918 
 
 July 1, 1919 
 
 July 1, 1920 
 
 
 
 to 
 
 to 
 
 to 
 
 On and after 
 
 *Zone 
 
 July 1, 1919 
 
 July 1, 1920 
 
 July 1, 1921 
 
 July 1, 1921 
 
 1st 
 
 $.01^ 
 
 $.013^ 
 
 $.oi?i 
 
 $.02 
 
 2nd 
 
 .OIK 
 
 .013^ 
 
 .01% 
 
 .02 
 
 3rd 
 
 .013^ 
 
 .02 
 
 .023^ 
 
 .03 
 
 4tli 
 
 .02 
 
 .03 
 
 .04 
 
 .05 
 
 5tli 
 
 .02M 
 
 .031^ 
 
 .04?^ 
 
 .06 
 
 6th 
 
 .02J^ 
 
 .04 
 
 .053^ 
 
 .07 
 
 7th 
 
 .03 
 
 .05 
 
 .07 
 
 .09 
 
 8th 
 
 .0314 
 
 .053^ 
 
 .07M 
 
 .10 
 
 ""Zones applicable to fourth class matter applicable to second 
 class matter. 
 
 [57] 
 
TAX 
 
 On Portion of Publication Devoted to 
 Other Than Advertising: 
 
 From July 1, 1918, to July 1, 1919, per lb. or 
 fraction $.01} 
 
 On and after July 1, 1919, per lb. or fraction .01^ 
 
 Note: Daily newspapers, deposited in letter-carrier 
 office for delivery by carrier, are subject to existing rate. 
 (Sec. 1102.) 
 
 Existing law as to circulation and existing rates on 
 second class matter within county of publication not 
 affected by increase in rates. (Sec. 1102.) 
 
 Newspapers and periodicals maintained by and in 
 interest of religious, educational, scientific, philanthropic, 
 agricultural, labor and fraternal associations not for profit 
 (except when deposited for delivery by carrier, in which 
 case the rates provided by existing law shall apply), the 
 rate, irrespective of the zone in which delivered, shall be 
 ij^ cents per pound or fraction on and after July 1, 
 1918, and l}4 cents per pound on and after July 1, 1919 
 (Sec. 1103.) 
 
 Where total weight of any one edition or issue m^led 
 to any one zone does not exceed one pound, the rate 
 shall be one cent. (Sec. 1104.) 
 
 Zone rates herein provided for relate to entire bulk 
 to any one zone and not to individually addressed pack- 
 ages. (Sec. 1105.) 
 
 Newspapers mailed by other than publisher or his 
 agent, or news agent or dealer, shall be charged the same 
 postage as under existing law. (Sec. 1106.) 
 
 [58] 
 
Dues 
 
 TAX 
 
 Dues, or Membership Fees, in social, sporting, or 
 athletic clubs which are in excess of $12.00 per 
 year (including initiation fees), to be paid by 
 members. (Effective November 1, 1917.) {Sec, 
 701) 10% 
 
 Note: Persons or organizations receiving payments 
 of dues, or admitting persons free, shall make monthly- 
 reports and pay taxes to Collector of Internal Revenue. 
 (Sec. 702.) 
 
 Dues to fraternal and beneficial societies are exempt. 
 (Sec. 701.) 
 
 Munitions Tax 
 
 Reduction of Rate 
 
 The munitions tax for the year of 1917 is reduced 
 from 123^ per centum to 10 per centum. (Sec, 214.) 
 
 Expiration of Tax 
 
 The Munitions Tax Law shall cease to be of 
 effect on and after January 1, 1918. {Sec, 214.) 
 
 [59] 
 
Administrative and General Provisions 
 
 West Indian Islands 
 
 Articles coming into U. S. from West Indian Islands, 
 acquired from Denmark, shall be subject to tax imposed 
 on like articles by Internal Revenue Laws of U. S., and 
 exempt from tax under Internal Revenue Laws of Islands. 
 (Sec, 1000.) 
 
 Articles shipped from U. S. to West Indian Islands, 
 acquired from Denmark, shall be subject to tax imposed 
 on like articles by Internal Revenue Laws of Islands and 
 exempt from tax under Internal Revenue Laws of U. S. 
 {Sec, 1000.) 
 
 Administrative Provisions of Law Applicable 
 
 All administrative, special and stamp provisions of 
 law, including the law relating to the assessment of taxes, 
 as far as applicable, are made a part of this Act. (Sec. 
 1001.) 
 
 Records and Returns 
 
 Every person liable to tax or for the collection thereof 
 shall keep such records, render such returns and comply 
 with such regulations as the Commissioner of Internal 
 Revenue may prescribe. (Sec. 1001.) 
 
 Collection and Payment 
 
 Where additional taxes are imposed by this Act upon 
 articles or commodities, upon which the existing tax has 
 been paid, the person required to pay such additional tax 
 shall make return within thirty days after passage of this 
 Law in accordance with regulations promulgated by the 
 Commissioner of Internal Revenue. (Sec, 1002.) 
 
 Payment of the additional tax may be extended seven 
 months after the passage of this Law, with the approval 
 
 [60j 
 
of, and under regulations prescribed by, the Commissioner 
 of Internal Revenue. (Sec, 1002.) 
 
 Where the method of collecting the tax is not specifically 
 provided, such tax shall be collected in such manner as the 
 Commissioner of Internal Revenue may prescribe. (Sec. 
 1003.) 
 
 Where tax imposed by stamps is an increase over exist- 
 ing rates, stamps on hand in collectors' offices or Internal 
 Revenue Bureau, may be used until supply is exhausted 
 but sold at the increased rates. (Sec, 1006.) 
 
 In the payment of any tax not payable by stamps, a 
 fractional part of a cent shall be disregarded unless it 
 amounts to one-half cent or more, in which case it shall be 
 increased to one cent. (Sec, 1008.) 
 
 Penalties 
 
 Penalty and administrative provisions contained in 
 Title VIII, page 96 of Law, shall apply to all taxes to be 
 paid by stamp. (Sec, 1003.) 
 
 Penalty for: 
 
 1 failure to make returns, 
 
 2 false or fraudulent return, 
 
 3 evasion or attempt to evade tax, 
 
 4 failure to collect, account for or pay over tax, 
 
 is fine not to exceed $1,000 or imprisonment not to exceed 
 one year, or both, and, in addition thereto, a penalty of 
 double the tax evaded. (Sec, 1004.) 
 
 Stamps on Hand 
 
 Assessment shall be made against taxpayers having 
 stamps on hand on the eflPective day of this Law, for 
 the difference between the prices paid and increased rate. 
 (Sec, 1006.) 
 
 [61 
 
Regulations and Rulings 
 
 Commissioner of Internal Revenue, with approval of 
 the Secretary of the Treasury, is authorized to make all 
 needful regulations for enforcement of the law. {Sec. 
 1005.) 
 
 Tax on Contracts Before May 9, 1917 
 
 If a bona fide contract is made with a dealer prior to 
 May 9, 1917, for the sale of beverages, cigars, cigarettes, 
 tobacco, coffee, tea, sugar, chocolate, cocoa, saccharine, 
 molasses, syrup, automobiles, cameras, boats, yachts, 
 sporting goods, toilet articles, patent medicines and play- 
 ing cards (or in the case of moving picture films, such a 
 contract with a dealer for the sale or lease thereof), after 
 the tax thereon takes effect, and if such contract does not 
 permit the adding of the whole tax to the amount to be paid 
 under the contract, the vendee, in lieu of the vendor, shall 
 pay so much of the tax as is not permitted to be added to 
 the contract price. Such taxes shall be paid to the ven- 
 dor by the vendee, at the time the sale is consummated, 
 and returned and paid to the United States by the 
 vendor. (Sec, 1007.) 
 
 The term "dealer" includes a vendee who purchases 
 with intent to use the article in the manufacture or pro- 
 duction of another article intended for sale. (Sec, 1007.) 
 
 Payment in Advance 
 
 Income and excess profits taxes may be paid in advance, 
 either in installments or in full. 
 
 Under regulations prescribed by the Secretary of the 
 Treasury, taxpayers hereunder may make payment in 
 advance in installments or in whole of an amount not 
 in excess of the estimated taxes due from them. One- 
 fourth of the tax shall be paid within thirty days, at least 
 another one-fourth within two months, and additional one- 
 fourth within four months after the close of the taxable 
 162] 
 
year, and the remainder before the time now fixed for such 
 payment. {Sec. 1009.) 
 
 Credit of interest at 3% may be allowed on the advance 
 installments, calculated from the date of payment to date 
 when due, but shall not be allowed on payments in excess 
 of the taxes due nor when made after four and one-half 
 months after end of taxable year. 
 
 Payment by Uncertified Checks 
 
 Collectors of Internal Revenue are authorized to receive 
 uncertified checks in payment of income and excess 
 profits taxes, but if a check so received is not paid, all 
 penalties shall apply in the same manner as if such check 
 had not been tendered. (Sec, 1010.) 
 
 I Provisions Separable 
 
 ' The adjudgment of any clause, sentence, paragraph or 
 
 part of this law to be invalid shall not affect, impair or 
 invalidate the remainder of the law. (Sec. 1300.) 
 
 I Effective Date of Law 
 
 I Unless otherwise specifically provided, this law shall take 
 effect on the day following its passage. {Sec. 1302.) 
 
 [63] 
 
War Tax Law 
 
 APPROVED OCTOBER 3. 1917 
 
 An Act to provide revenue to defray war 
 expenses, and for other purposes 
 
 Be it enacted by the Senate and House of Representa- 
 tives of the United States of America in Congress assem- 
 bled, 
 
 Title I— War Income Tax 
 
 Section 1. That in addition to the normal tax im- 
 posed 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 seven- 
 teen 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; 
 
 [651 
 
 Surtax 
 
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; 
 
 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 
 bv 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. 
 
 Fifty 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, aff-sessed, col- 
 lected, and paid ui>on the same basis and in the same 
 mannrr 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 
 
 [66] 
 
Sp< 
 Ex 
 
 :emption 
 
 DeductioH 
 at Source of 
 Additional 
 Normal Tax 
 
 this Act (a) the exemptions of $3,000 and $4,000 provided 
 in sertion 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 re- 
 quired 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 un- 
 married 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 Sep- 
 tember 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 sub- Corporations 
 division (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 calen- 
 dar year nineteen hundred and seventeen and every Rate of Tax 
 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, Fiscal Year 
 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, Collection 
 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 
 
 (e7] 
 
for the purpose of the tax imposed by this section the in- 
 come 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 corpora- 
 tion, 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 
 
 Sec. 200. That when used in this title — the term "Cor- 
 poration" 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 Ter- 
 ritories 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 
 taxanle year shall be the vear 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 tax- 
 able 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 seven- 
 teen, to the end of such fiscal year bears to the full fiscal 
 
 [68] 
 
year; and the term "Pre- War Period" means the calendar Pre- War 
 years nineteen hundred and eleven, nineteen hundred and Period 
 twelve, and nineteen hundred and thirteen, or, if a cor- 
 poration or partnership was not in existence or an indi- 
 vidual 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 Trade 
 and occupations. Business 
 
 The term "Net Income" means in the case of a foreign 
 corporation or partnership or a nonresident alien individual. Net Incomr 
 the net income received from sources within the United 
 States. 
 
 Sec. 201. That in addition to the taxes under exist- Rates of Tax 
 ing 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 deduction (determined as hereinafter pro- 
 vided) and not in excess of fifteen per centum of the in- 
 vested capital for the taxable year; twenty-five per centum 
 of the amount of the net income in excess of fifteen per 
 centum and not in excess of twenty per centum of such 
 capital; thirty-five per centum of the amount of the net 
 income in excess of twenty per centum and not in excess : 
 
 of twenty-five per centum of such capital; forty-five per | 
 
 centum of the amount of the net income in excess of | 
 
 twenty-five per centum and not in excess of thirty-three 
 per centum of such capital; and sixty per centum of i 
 
 the amount of the net income in excess of thirty-three 
 per centum of such capital. 
 
 For the purpose of this title every corporation or part- 
 nership not exempt under the provisions of this section Trade or 
 shall be deemed to be engaged in business, and all the Business of 
 trades and businesses in which it is engaged shall be treated Corporation 
 as a single trade or business, and all its income from or Partner- 
 whatever source derived shall be deemed to be received s^ip 
 from such trade or business. 
 
 [69] 
 
This title shall apply to all trades or businesses of what- 
 ever description, whether continuously carried on or not, 
 except — (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 thereof, the com- 
 pensation or fees received by them as such officers or em- 
 ployees; (b) Corporations exempt from tax under the 
 provisions of section eleven of Title I of such Act of Sep- 
 tember 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 ifeued on the weekly premium payment plan. 
 
 Sec. 202. That the tax shall not be imposed in the 
 case of the trade or business of a foreign corporation or 
 partnership or a nonresident alien individual, the net 
 mcome of which trade or business during the taxable 
 year is less than $3,000. 
 
 Sec. 203. That for the purposes of this title the de- 
 duction shall be as follows, except as otherwise in this 
 title provided — (a) In the case of a domestic corpora- 
 tion, the sum of (1) an amount equal to the same per- 
 centage of the invested capital for the taxable year which 
 the average amount of the annual net income of the trade 
 or business during the pre-war period was of the invested 
 capital for the pre-war 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 do- 
 mestic partnership or of a citizen or resident of the United 
 States, the sum of (1) an amount equal to the same per- 
 centage of the invested capital for the taxable year which 
 the average amount of the annual net income of the trade 
 or business during the pre-war period was of the invested 
 capital for the pre-war 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 partnership or of a nonresident 
 alien individual, an amount ascertained in the same 
 manner as provided in subdivisions (a) and (b), without 
 any exemption of $3,000 or $6,000; (d) If the Secretary 
 of the Treasury is unable satisfactorily to determine the 
 average amount of the annual net income of the trade or 
 business during the pre-war period, the deduction shall be 
 determined in the same manner as provided in section 
 two hundred and five. 
 
 [70] 
 
Sec. 204. That if a corporation or partnership was 
 not in existence, or an individual was not engaged in the 
 trade or business, during the whole of any one calendar 
 year during the pre-war period, the deduction shall be an 
 amount equal to eight per centum of the invested capital 
 for the taxable year, plus in the case of a domestic corpora- 
 tion $3,000, and in the case of a domestic partnership 
 or a citizen or resident of the United States, $6,000. 
 
 A trade or business carried on by a corporation, part- 
 nership, or individual, although formally organized or 
 reorganized on or after January second, nineteen hundred 
 and thirteen, which is substantially a continuation of a 
 trade or business carried on prior to that date, shall, for 
 the purpose of this title, be deemed to have been in exist- 
 ence prior to that date, and the net income and invested 
 capital of its predecessor prior to that date shall be deemed 
 to have been its net income and invested capital. 
 
 Sec. 205. (a) That if the Secretary of the Treasury, 
 upon complaint finds either (1) that (kiring the pre- 
 war period a domestic corporation or partnership, 
 or a citizen or resident of the United States, had 
 no net income from the trade or business, or (2) that dur- 
 ing the pre-war period the percentage, which the net 
 income was of the invested capital, was low as compared 
 with the percentage, which the net income during such 
 period of representative corporations, partnerships, and 
 individuals, engaged in a like or similar trade or business, 
 was of their invested capital, then the deduction shall be 
 the sum of (1) an amount equal to the same percentage 
 of its invested capital for the taxable year which the average 
 deduction (determined in the same manner as provided 
 in section two hundred and three, without including the 
 $3,000 or $6,000 therein referred to) for such year of 
 representative corporations, partnerships, or individuals, 
 engaged in a like or similar trade or business, is of their 
 average invested capital for such year, plus (2) in the case 
 of a domestic corporation $3,000, and in the case of a 
 domestic partnership or a citizen or resident of the United 
 States, $6,000. 
 
 The percentage which the net income was of the in- 
 vested capital in each trade or business shall be determined 
 by the Commissioner of Internal Revenue, in accordance 
 with regulations prescribed by him, with the approval of 
 
 [71] 
 
 Deduction 
 
 Determined, 
 
 Concern not 
 
 Operating 
 
 During 
 
 Pre-War 
 
 Period 
 
 Deduction 
 
 Determined, 
 
 Concern 
 
 having no 
 
 Pre-War 
 
 Income or 
 
 Subnormal 
 
 Pre-War 
 
 Income 
 
 Determina- 
 tion of 
 Percentage 
 
the Secretary of the Treasury. In the case of a corpora- 
 tion or partnership which has fixed its own fiscal year, 
 the percentage determined for the calendar year ending 
 during such fiscal year shall be used. 
 
 (b) The tax shall be assessed upon the basis of the de- 
 claim for duction determined as provided in section two hundred 
 Abatement and three, but the taxpayer claiming the benefit of this 
 section may at the time of making the return file a claim 
 for abatement of the amount by which the tax so assessed 
 exceeds a tax computed upon the basis of the deduction 
 determined as provided in section two hundred and three, 
 but the taxpayer claiming the benefit of this section may 
 at the time of making the return file a claim for abate- 
 ment of the amount by which the tax so assessed exceeds 
 a tax computed upon the basis of the deduction deter- 
 mined as provided in this section. In such event, 
 collection oi the part of the tax covered by such claim for 
 abatement shall not be made until the claim is decided, 
 but if in the judgment of the Commissioner of Internal 
 Revenue, the interests of the United States would be 
 jeopardized thereby he may require the claimant to give a 
 bond in such amount and with such sureties as the Com- 
 missioner may think wise to safeguard such interests, 
 conditioned for the payment of any tax found to be due, 
 with the interest thereon, and if such bond, satisfactory 
 to the Commissioner, is not given within such time as he 
 prescribes, the full amount of tax assessed shall be collected 
 and the amount overpaid, if any, shall upon final decision 
 of the application, be refunded as a tax erroneously or 
 illegally collected. 
 Nel income Sec. 206. That for the purposes of this title the net 
 
 Determined income of a corporation shall be ascertained and returned 
 (a) for the calendar years nineteen hundred and eleven, 
 Corporation and nineteen hundred and twelve, upon the same basis 
 and in the same manner as provided in section thirty- 
 ei^t of the Act entitled "An Act to Provide Revenue, 
 Equalize Duties, and Encourage the Industries of the 
 United States, and for Other Purposes, " approved August 
 fifth, nineteen hundred and nine, except that income 
 taxes paid by it within the year imposed by the authority 
 of the United States shall be included; (b) for the calendar 
 year nineteen hundred and thirteen upon the same basis 
 and in the same manner as provided in section II of the 
 Act entitled "An Act to Reduce Tarifif Duties and to 
 Provide Revenue for the Government, and for Other 
 
 [72] 
 
Purposes," approved October third, nineteen hundred 
 and thirteen, except that income taxes paid by it within 
 the year imposed by the authority of the United States 
 shall be included, and except that the amounts received 
 by it as dividends upon the stock or from the net earnings 
 of other corporations, joint-stock companies or associa- 
 tions, or insurance companies, subject to the tax imposed 
 by section II of such Act of October third, nineteen 
 hundred and thirteen, shall be deducted; and (c) for the 
 taxable year upon the same basis and in the same manner 
 as provided in title I of the Act entitled "An Act to In- 
 crease the Revenue, and for Other Purposes, *' approved 
 September eighth, nineteen hundred and sixteen, as 
 amended by this Act, except that the amounts received 
 by it as dividends upon the stock or from the net earnings 
 01 other corporations, joint-stock companies or associa- 
 tions, or insurance companies, subject to the tax imposed 
 by title I of such Act of September eighth, nineteen 
 hundred and sixteen, shall be deducted. 
 
 The net income of a partnership or individual shall be 
 ascertained and returned for the calendar years nineteen 
 hundred and eleven, nineteen hundred and twelve, and 
 nineteen hundred and thirteen, and for the taxable year, 
 upon the same basis and in the same manner as provided 
 in title I of such Act of September eighth, nineteen 
 hundred and sixteen, as amended by this Act, except 
 that the credit allowed by subdivision (b) of section five 
 of such Act shall be deducted. There shall be allowed 
 (a) in the case of a domestic partnership the same de- 
 ductions as allowed to individuals in subdivision (a) of 
 section five of such Act of September eighth, nineteen 
 hundred and sixteen, as amended by this Act; and (b) in 
 the case of a foreign partnership the same deductions as 
 allowed to individuals in subdivision (a) of section six 
 of such Act as amended by this Act. 
 
 Sec. 207. That as used in this title the term "Invested 
 Capital '* for any year means the average invested capital 
 for the year, as defined and limited in this title, averaged 
 monthly. 
 
 As used in this title "Invested Capital*' does not in- 
 clude stocks, bonds (other than obligations of the United 
 States), or other assets, the income from which is not 
 subject to the tax imposed by this title, nor money or 
 
 [73] 
 
 Partnerships 
 
 and 
 
 Individuals 
 
 Invested 
 Capital 
 Monthly 
 Average 
 
 Capital 
 Excluded 
 
Domestic 
 Corporations 
 and Partner- 
 ships 
 
 'Citizens or 
 Residents of 
 the United 
 ;State8 
 
 other property borrowed, and means, subject to the 
 above limitations: 
 
 (a) In the case of a corporation or partnership: (1) 
 actual cash paid in, (2) the actual cash value of tangible 
 property paid in other than csish, for stock or shares in 
 such corporation or partnership, at the time of such pay- 
 ment (but in case such tangible property was paid in 
 prior to January first, nineteen hundred and fourteen, 
 the actual cash value of such property as of January first, 
 nineteen hundred and fourteen, but in no case to exceed 
 the par value of the original stock or shares specifically 
 issued therefor), and (3) paid in or earned surplus and un- 
 divided profits used or employed in the business, exclusive 
 of undivided profits earned during the taxable year: pro- 
 vided, that (a) the actual cash value of patents and copy- 
 rights paid in for stock or shares in such corporation or 
 partnership, at the time of such payment, shall be included 
 as invested capital, but not to exceed the par value of 
 such stock or shares at the time of such payment, and (b) 
 the good will, trade-marks, trade brands, the franchise of a 
 corporation or partnership, or other intangible property, 
 shall be included as invested capital if the corporation or 
 partnership made payment bona fide therefor specifically 
 as such in cash or tangible property, the value of such good 
 will, trade-mark, trade brand, franchise, or intangible 
 property, not to exceed the actual cash or actual cash 
 value of the tangible property paid therefor at the time 
 of such payment; but good will, trade-marks, trade brands, 
 franchise of a corporation or partnership, or other intangible 
 property, bona fide purchased, prior to March third, 
 nineteen hundred and seventeen, for and with interests or 
 shares in a partnership or for and with shares in the capital 
 stock of a corporation (issued prior to March third, nine- 
 teen hundred and seventeen), in an amount not to exceed, 
 on March third, nineteen hundred and seventeen, twenty 
 per centum of the total interests or shares in the partner- 
 ship or of the total shares of the capital stock of the cor- 
 poration, shall be included in invested capital at a value 
 not to exceed the actual cash value at the time of such 
 purchase, and in case of issue of stock therefor not to 
 exceed the par value of such stock. 
 
 (b) In the case of an individual (1) actual cash paid 
 into the trade or business, and (2) the actual cash value of 
 tangible property paid into the trade or business, other 
 than cash, at the tune of such payment (but in case such 
 
 [74] 
 
tangible property was paid in prior to January first, 
 nineteen hundred and fourteen, the actual cash value of 
 such property as of January first, nineteen hundred and 
 fourteen), and (3) the actual cash value of patents, copy- 
 rights, good will, trade-marks, trade brands, franchises, 
 or other intangible property, paid into the trade or busi- 
 ness, at the time of such payment, if payment was made 
 therefor specifically as such in cash or tangible property, 
 not to exceed the actual cash or actual cash value of the 
 tangible property bona fide paid therefor at the time of 
 such payment. 
 
 In the case of a foreign corporation or partnership or Foreign 
 of a nonresident alien individual the term ** Invested Concerns 
 Capital" means that proportion of the entire invested and Non- 
 capital, as defined and limited in this title, which the net Resident 
 income from sources within the United States bears to Aliens 
 the entire net income. 
 
 Sec. 208. That in case of the reorganization, consoli- 
 dation, or change of ownership of a trade or business 
 afte\r March third, nineteen hundred and seventeen, if 
 an interest or control in such trade or business of fifty 
 per centum or more remains in control of the same per- 
 sons, corporations, associations, partnerships, or any of 
 them, then in ascertaining the invested capital of the trade 
 or business no asset transferred or received from the 
 prior trade or business shall be allowed a greater value 
 than would have been allowed under this title in comput- 
 ing the invested capital of such prior trade or business if 
 such asset had not been so transferred or received, unless 
 such asset was paid for specifically as such, in cash or 
 tangible property, and then not to exceed the actual cash 
 or actual cash value of the tangible property paid therefor 
 at the time of such payment. 
 
 Sec. 209. That in the case of a trade or business having Xax on 
 no invested capital or not more than a nominal capital Business 
 there shall be levied, assessed, collected, and paid, in Having no 
 addition to the taxes under existing law and under this Capital or 
 Act, in lieu of the tax imposed by section two hundred and Nominal 
 one, a tax equivalent to eight per centum of the net income Capital 
 of such trade or business, in excess of the following de- 
 ductions: In the case of a domestic corporation, $3,000, 
 and in the case of a domestic partnership, or a citizen or 
 resident of the United States, $6,000, in the case of all 
 other trades or business, no deduction. 
 
 176 J 
 
Sec. 210. That if the Secretary of the Treasury is 
 unable in any case satisfactorily to determine the invested 
 capital, the amount of the deduction shall be the sum of 
 (1) an amount equal to the same proportion of the net 
 income of the trade or business received during the taxable 
 year as the proportion which the average deduction (de- 
 termined in the same manner as provided in section two 
 hundred and three, without including the $3,000 or $6,000 
 therein referred to) for the same calendar year of repre- 
 sentative cor])orations, partnerships, and. individuals, 
 engaged in a like or similar trade or business, bears to the 
 total net income of the trade or business received by such 
 corporations, partnerships, and individuals, plus (2) in 
 the case of a domestic corporation $3,000, and in the case 
 of a domestic partnership or a citizen or resident of the 
 United States, $6,000. 
 
 For the purpose of this section the proportion between 
 the deduction and the net income in each trade or business 
 shall be determined by the Commissioner of Internal 
 Revenue in accordance with regulations prescribed by 
 him, with the approval of the Secretary of the Treasury. 
 In the case of a corporation or partnership which has 
 fixed its own fiscal year, the proportion determined for 
 the calendar year ending during such fiscal year shall be 
 used. 
 
 Sec. 211. That every foreign partnership having a 
 net income of $3,000 or more for the taxable year, and 
 every domestic partnership having a net income of $6,000 
 or more for the taxable year, shall render a correct re- 
 turn of the income of the trade or business for the taxable 
 year, setting forth specifically the gross income for such 
 year, and the deductions allowed in this title. Such re- 
 turns shall be rendered at the same time and in the same 
 manner as is prescribed for income-tax returns under 
 title I of such Act of September eighth, nine^teen hundred 
 and sixteen, as amended by this Act. 
 
 Sec. 212. That all administrative, special and general 
 provisions of law, including the laws in relation to the 
 assejssment, remission, collection, and refund of internal- 
 revenue taxes not heretofore specifically repealed, and not 
 inconsistent with the provisions of this title^ are hereby 
 extended and made applicable to all the provisions of this 
 title and to the tax herein imposed, and all provisions 
 of title I of such Act of September eighth, nineteen 
 
 [76] 
 
hundred and sixteen, as amended by this Act, relating 
 to returns and payment of the tax therein imposed, 
 including penalties, are hereby made applicable to the tax 
 imposed by this title. 
 
 Sec. 213. That the Commissioner of Internal Revenue, 
 with the approval of the Secretary of the Treasury, shall 
 make all necessary regulations for carrying out the pro- 
 visions of this title, and may require any corporation, 
 partnership, or individual, subject to the provisions of 
 this title, to furnish him with such facts, data, and in- 
 formation as in his judgment are necessary to collect the 
 tax imposed by this title. 
 
 Sec. 214. That title II (sections two hundred to two 
 hundred and seven, inclusive) of the Act entitled "An Act 
 to provide increased revenue to defray the expenses of 
 the increased appropriations for the army and navy, 
 and the extensions of fortifications, and for other pur- 
 poses," approved March third, nineteen hundred and 
 seventeen, is hereby repealed. 
 
 Any amount heretofore or hereafter paid on account 
 of the tax imposed by such title II, shall be credited 
 toward the payment of the tax imposed by this title, and 
 if the amount so paid exceeds the amount of such tax the 
 excess shall be refunded as a tax erroneously or illegally 
 collected. 
 
 Subdivision (1) of section three hundred and one of 
 such Act of September eighth, nineteen hundred and six- 
 teen, is hereby amended so that the rate of tax for the tax- 
 able year nineteen hundred and seventeen shall be ten per 
 centum instead of twelve and one-half per centum, as 
 therein provided. 
 
 Subdivision (2) of such section is hereby amended to 
 read as follows: 
 
 " (2) This section shall cease to be of effect on and after 
 January first, nineteen hundred and eighteen. '^ 
 
 Former 
 Excess 
 Profits Tax 
 Repealed 
 
 Munitions 
 Tax 
 
 Title III — War Tax on Beverages 
 
 Sec. 300. That on and after the passage of this Act Distilled 
 there shall be levied and collected on all distilled spirits in Spirits 
 bond at that time or that have been or that may be then or 
 thereafter produced in or imported into the United States, 
 
 [771 
 
except such distilled spirits as are subject to the tax pro- 
 vided in section three hundred and three, in addition 
 to the tax now imposed by law, a tax of $1 .10 (or, if 
 withdrawn for beverage purposes, or for use in the manu- 
 facture or production of any article used or intended for 
 use as a beverage, a tax ot $2.10) on each proof gallon, 
 or wine gallon when below proof, and a proportionate 
 tax at a like rate on all fractional parts of such proof 
 or wine gallon, to be paid by the distiller or importer 
 when withdrawn, and collected under the provisions of 
 existing law. 
 
 That in addition to the tax under existing law there 
 shall be levied and collected upon all perfumes hereafter 
 imported into the United States containmg distilled spirits, 
 a tax of $1.10 per wine gallon, and a proportionate tax at 
 a like rate on all fractional parts of such wine gallon. 
 Such tax shall be collected by the collector of customs and 
 deposited as internal-revenue collections, under such rules 
 and regulations as the Commissioner of Internal Revenue, 
 with the approval of the Secretary of the Treasury, may 
 prescribe. 
 
 Sec. 301. That no distilled spirits produced after the 
 passage of this Act shall be imported into the United 
 States from any foreign country, or from the West Indian 
 Islands recently acquired from Denmark (unless produced 
 from products the growth of such islands, and not then into 
 any State or Territory or District of the United States in 
 which the manufacture or sale of intoxicating liquor is 
 prohibited), or from Porto Rico, or the Philippine Islands. 
 Under such rules, regulations, and bonds as the Secretary 
 of the Treasury may prescribe, the provisions of this 
 section shall not apply to distilled spirits imported for 
 other than (1) beverage purposes or (2) use in the manu- 
 facture or production of any article used or intended for 
 use as a beverage. 
 
 Sec. 302. That at registered distilleries producing alco- 
 hol, or other high-proof spirits, packages may be filled with 
 such spirits reduced to not less than one hundred proof from 
 the receiving cisterns and tax paid without being entered 
 into bonded warehouse. Such spirits may also be transferred 
 from the receiving cisterns at such distilleries, by means of 
 pipe lines, direct to storage tanks in the bonded warehouse 
 and may be warehoused in such storage tanks. Such spirits 
 may be also transferred in tanks or tank cars to general 
 
 [78] 
 
bonded warehouses for storage therein, either in storage 
 tanks in such warehouses or in the tanks in which thev were 
 transferred. Such spirits may also be transferred after 
 tax payment from receiving cisterns or warehouse storage 
 tanks to tanks or tank cars and may be transported in such 
 tanks or tank cars to the premises of rectifiers of spirits. 
 The Commissioner of Internal E,evenue, with the approval 
 of the Secretary of the Treasury, is hereby empowered to 
 prescribe all necessary regulations relating to the drawing 
 off, transferring, gauging, storing and transporting of such 
 spirits; the records to be kept and returns to be made; the 
 size and kind of packages and tanks to be used; the marking, 
 branding, numbering and stamping of such packages and 
 tanks; the kinds of stamps, if any, to be used; and the time 
 and manner of paying the tax; the kind of bond and the 
 penal sum of same. The tax prescribed by law must be 
 paid before such spirits are removed from the distillery 
 premises, or from general bonded warehouse in the case 
 of spirits transferred thereto, except as otherwise provided 
 by law. 
 
 Under such regulations as the Commissioner of Internal 
 Revenue, with the approval of the Secretary of the Treas- 
 ury, may prescribe, distilled spirits may hereafter be drawn 
 from receiving cisterns and deposited in distillery ware- 
 houses without having affixed to the packages contain- 
 ing the same distillery warehouse stamps, and such pack- 
 ages, when so deposited in warehouse, may be withdrawn 
 therefrom on the original gauge where the same have re- 
 mained in such warehouse for a period not exceeding thirty 
 days from the date of deposit. 
 
 Under such regulations as the Commissioner of 
 Internal Revenue, with the approval of the Secretary' of 
 the Treasury, may prescribe, the manufacture, ware- 
 housing, withdrawal, and shipment, under the provisions 
 of existing law, of ethyl alcohol for other than (1) beverage 
 purposes or (2) use in the manufacture or production of 
 any article used or intended for use as a beverage, and de- 
 natured alcohol, may be exempted from the provisions of 
 section thirty-two hundred and eighty-three, Revised 
 Statutes of the United States. 
 
 Under such regulations as the Commissioner of 
 Internal Revenue, with the approval of the Secretary of 
 the Treasury, may prescribe, manufacturers of ethyl alco- 
 hol for other than beverage purposes may be granted per- 
 
 [79] 
 
mission under the provisions of section thirty-two hundred 
 and eighty-five, Revised Statutes of the United States, 
 to fill fermentinp; tubs in a sweet-mash distillery not oftener 
 than once in forty -eight hours. 
 
 Sec. 303. That upon all distilled spirits produced in 
 or imported into the United States upon which the tax now 
 imposed by law has been paid, and which, on the day this 
 Act is passed, are held by a retailer in a quantity in 
 excess of fifty gallons in the aggregate, or by any other per- 
 son, corporation, partnership, or association in any quan- 
 tity, and which are intended for sale, there shall be levied, 
 assessed, collected and paid a tax of $1.10 (or, if intended 
 for sale for beverage purposes, or for use in the manufac- 
 ture or production of any article used or intended for use 
 as a beverage, a tax of $2.10) on each proof gallon, 
 and a proportionate tax at a like rate on all fractional 
 parts of such proof gjallon: Provided j That the tax 
 on such distilled spirits in the custody of a court of bank- 
 ruptcy in insolvency proceedings on June first, nineteen 
 hundred and seventeen, shall be paid by the person to 
 whom the court delivers such distilled spirits at the time 
 of such delivery, to the extent that the amount thus 
 delivered exceeds the fifty gallons hereinbefore provided. 
 
 Sec. 304. That in addition to the tax now imposed 
 or imposed by this Act on distilled spirits there shall be 
 levied, assessed, collected, and paid a tax of 15 cents on 
 each proof gallon and a proportionate tax at a like rate on 
 all fractional parts of such proof gallon on all distilled 
 spirits or wines hereafter rectified, purified, or refined in 
 such manner, and on all mixtures hereafter produced in 
 such manner, that the peraon so rectifying^ purifying, re- 
 fining, or mixing the same is a rectifier within the meaning 
 of section thirty-two hundred and forty-four. Revised 
 Statutes, as amended, and on all such articles in the pos- 
 session of the rectifier on the day this Act is passed: 
 Provided, That this tax shall not apply to gin produced by 
 the redistillation of a pure spirit over juniper berries and 
 other aromatics. 
 
 When the process of rectification is completed and the 
 tax prescribed by this section has been paid, it shall be 
 unlawful for the rectifier or other dealer to reduce in proof 
 or increase in volume such spirits or wine by the addition 
 of water or other substance; nothing herein contained 
 
 rso] 
 
shall, however, prevent a rectifier from using again in the 
 process of rectincation spirits already rectified and upon 
 which the tax has theretofore been paid. 
 
 The tax imposed by this section shall not attach to 
 cordials or liqueura on which a tax is imposed and paid 
 under the Act entitled "An Act to increase the revenue, 
 and for other purposes," approved September eighth, 
 nineteen hundred and sixteen, nor to the mixing and 
 blending of wines, where such blending is for the sole pur- 
 pose of perfecting such wines according to commercial 
 standards, nor to blends made exclusively of two or more 
 pure straight whiskies aged in wood for a period not less 
 than four years and without the addition of coloring or 
 flavoring matter or any other substance than pure water 
 and if not reduced below ninety proof: Provided, That 
 such blended whiskies shall be exempt from tax under this 
 section only when compounded under the immediate 
 supervision of a revenue officer, in such tanks and under 
 such conditions and supervision as the Commissioner of 
 Internal Revenue, with the approval of the Secretary of 
 the Treasury, may prescribe. 
 
 All distilled spirits taxable under this section shall be 
 subject to uniform regulations concerning the use thereof 
 in the manufacture, blending, compounding, mixing, 
 marking, branding, and sale of whisky and rectified spirits, 
 and no discrimination whatsoever shall be made by reason 
 of a difference in the character of the material from which 
 same may have been produced. 
 
 The business of a rectifier of spirits shall be carried on, 
 and the tax on rectified spirits shall be paid, under such 
 rules, regulations, and bonds as may be prescribed by the 
 Commissioner of Internal Revenue, with the approval of 
 the Secretary of the Treasury. 
 
 Any person violating any of the provisions of this sec- 
 tion shall be deemed to be guilty of a misdemeanor and, 
 upon conviction, shall be fined not more than $1,000 or 
 imprisoned not more than two years. He shall, in addi- 
 tion, be liable to double the tax evaded, together with the 
 tax, to be collected by assessment or on any bond given. 
 
 Sec. 305. That hereafter collectors of internal revenue 
 shall not furnish wholesale liquor dealer^s stamps in lieu of 
 and in exchange for stamps for rectified spirits unless the 
 package covered by stamp for rectified spirits is to be broken 
 into smaller packages. 
 
 [81] 
 
The Commissioner of Internal Revenue, with the ap- 
 proval of the Secretary of the Treasury, is authorized to 
 discontinue the use of the following stamps whenever in his 
 judgment the interests of the Government will be sub- 
 served thereby: 
 
 Distillery warehouse, special bonded warehouse, special 
 bonded rewarehouse, general bonded warehouse, general 
 bonded retransfer, transfer brandy, export tobacco, export 
 cigars, export oleomargarine and export fermented liquor 
 stamps. 
 
 Sec. 306. That the Commissioner of Internal Revenue, 
 with the approval of the Secretary of the Treasury, is 
 hereby authorized to require at distilleries, breweries, 
 rectifying houses, and wherever else in his judgment such 
 action may be deemed advisable, the installation of meters, 
 tanks, pipes, or any other apparatus for the purpose of 
 protecting the revenue, and such meters, tanks, and pipes 
 and all necessary labor incident thereto shall be at the 
 expense of the person, corporation, partnership, or asso- 
 ciation on whose premises the installation is required. 
 Any such person, corporation, partnership, or association 
 refusing or neglecting to install such apparatus when so 
 required by the commissioner shall not be permitted to 
 conduct business on such premises. 
 
 Sec. 307. That on and after the passage of this Act 
 there shall be levied and collected on all beer, lager beer, 
 ale, porter, and other similar fermented liquor, containing 
 one-half per centum or more of alcohol, brewed or manu- 
 factured and sold, or stored in warehouse, or removed for 
 consumption or sale, within the United States, by what- 
 ever name such liquors may be called, in addition to the 
 tax now imposed by law, a tax of $1.50 for every barrel 
 containing not more than thirty-one gallons, and at a 
 like rate for any other quantity or for the fractional parts 
 of a barrel authorized and defined by law. 
 
 Sec. 308. That from and after the passage of this 
 Act taxable fermented liquors may be conveyed without 
 payment of tax from the brewery premises where produced 
 to a contiguous industrial distillery of either class estab- 
 lished under the Act of October third, nineteen hundred 
 and thirteen, to be used as distilling material, and the 
 residue from such distillation, containing less than one- 
 half of one per centum of alcohol by volume, which is 
 to be used in making beverages, may be manipulated by 
 
 [82] 
 
cooling, flavoring, carbonating, settling, and filtering on 
 the distillery premises or elsewhere. 
 
 The removal of the taxable fermented liquor from the 
 brewery to the distillery and the operation of the distillery 
 and removal of the residue therefrom shall be under the 
 supervision of such officer or officers as the Commissioner 
 of Internal Revenue shall deem proper, and the Commis- 
 sioner of Internal Revenue, with the approval of the Secre- 
 tary of the Treasury, is hereby authorized to make such 
 regulations from time to time as may be necessary to give 
 force and effect to this section and to safeguard the revenue. 
 ^ Sec. 309. That upon all still wines, including Ver- Wines anH 
 muth, and upon all Champagne and other Sparkling Wines, Cordials 
 Liqueurs, Cordials, Artificial or Imitation Wines or Com- 
 pounds sold as Wine, produced in or imported into the 
 United States, and hereafter removed from the custom- 
 house, place of manufacture, or from bonded premises 
 for sale or consumption, there shall be levied and collected, 
 in addition to the tax now imposed by law upon such ar- 
 ticles, a tax equal to such tax, to be levied, collected, and 
 paid under the provisions of existing law. 
 
 Sec. 310. That upon all articles specified in section 
 three hundred and nine upon which the tax now imposed 
 by law has been paid and which are on the day this Act 
 is passed held in excess of twenty-five gallons in the aggre- 
 gate of such articles and intended for sale, there shall be 
 levied, collected, and paid a tax equal to the tax imposed 
 by such section. 
 
 Sec. 311. That upon all grape brandy or wine spirits Grape 
 withdrawn by a producer of wines from any fruit dis- Brandy 
 tillery or special bonded warehouse under subdivision (c) 
 of section four hundred and two 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 in addi- 
 tion to the tax therein imposed, a tax equal to double 
 such tax, to be assessed, collected, and paid under the 
 provisions of existing law. 
 
 Sec. 312. That upon all sweet wines held for sale by Sweet Wines 
 the producer thereof upon the day this Act is passed 
 there shall be levied, assessed, collected, and paid an addi- 
 tional tax equivalent to 10 cents per proof gallon upon the 
 grape brandy or wine spirits used in the fortification of 
 such wine, and an additional tax of 20 cents per proof gallon 
 
 [83] 
 
shall be levied, assessed, collected, and paid upon all grape 
 brandy or wine spirits withdrawn by a producer of sweet 
 wines for the purpose of fortifying such wines and not so 
 used prior to the passage of this Act. 
 
 Sec. 313. That there shall be levied, assessed, col- 
 lee ted, and paid — 
 Sirups and (a) Upon all prepared sirups or extracts (intended for 
 
 Extracts use in the manufacture or production of beverages, com- 
 
 monly known as soft drinks, by soda fountains, bottling 
 establishments, and other similar places) sold by the man- 
 ufacturer, producer, or importer thereof, if so sold for not 
 more than $1.30 per gallon, a tax of 5 cents per gallon ; if so 
 sold for more than $1.30 and not more than $2 per gallon, a 
 tax ot 8 cents per gallon ; if so sold for more than $2 and not 
 more than $3 per gallon, a tax of 10 cents per gallon; if so 
 sold for more than $3 and not more than $4 per gallon, a 
 tax of 15 cents per gallon; and if so sold for more than $4 per 
 gallon, a tax of 20 cents per gallon; and 
 Soft Drinks (b) Upon all unfermented grape juice, soft drinks or 
 
 artificial mineral waters (not carbonated), and fermented 
 liquors containing less than one-half per centum of alcohol, 
 sold by the manufacturer, producer, or importer thereof, 
 in bottles or other closed containers, and upon all ginger 
 ale, root beer, sarsaparilla, pop, and other carbonated 
 waters or beverages, manufactured and sold by the manu- 
 facturer, producer, or importer of the carbonic acid gas used 
 in carbonating the same, a tax of 1 cent per gallon; and 
 Mineral (c) Upon all natural mineral waters or table waters, 
 
 Waters sold by the producer, bottler, or importer thereof, in bottles 
 
 or other closed containers, at over 10 cents per gallon, a tax 
 of 1 cent per gallon. 
 Monthly Sec. 314. That each such manufacturer, producer, 
 
 Returns bottler, or importer shall make monthly returns under 
 
 oath to the collector of internal revenue for the district in 
 which is located the principal place of business, containing 
 such information necessary for the assessment of the tax, 
 and at such times and in such manner, as the Commissioner 
 of Internal Revenue, with the approval of the Secretary of 
 the Treasury, may by regulation prescribe. 
 Carbonic Sec. 315. That upon all carbonic acid gas in drums or 
 
 Acid Gas other containers (intended for use in the manufacture or 
 
 production of carbonated water or other drinks) sold by the 
 manufacturer, producer, or importer thereof, there shall be 
 levied, assessed, collected, and paid a tax of 5 cents per 
 
 [84] 
 
pound. Such tax shall be paid by the purchaser to the 
 vendor thereof and shall be collected, returned, and paid 
 to the United States by such vendor in the same manner 
 as provided in section five hundred and three. 
 
 Title IV — War Tax on Cigars, Tobacco, 
 and Manufactures Thereof 
 
 Sec. 400. That upon cigars and cigarettes, which shall Cigars 
 be manufactured and sold, or removed for consumption or 
 sale, there shall be levied and collected, in addition to the 
 taxes now imposed by existing law, the following taxes, to 
 be paid by the manufacturer or importer thereof: fa) on 
 cigars of all descriptions made of tobacco, or any substitute 
 therefor, and weighing not more than three pounds per 
 thousand, 25 cents per thousand; (b) on cigars made of 
 tobacco, or any substitute therefor, and weighing more than 
 three pounds per thousand, if manufactured or imported to 
 retail at 4 cents or more each, and not more than 7 cents 
 each, $1 per thousand; (c) if manufactured or imported 
 to retail at more than 7 cents each and not more than 15 
 cents each, $3 per thousand; (d) if manufactured or im- 
 ported to retail at more than 15 cents each and not more 
 than 20 cents each, $5 per thousand; (e) if manufactured 
 or imported to retail at more than 20 cents each, $7 per 
 thousand: Proj/ided, That the word ''retail" as used in 
 this section shall mean the ordinary retail price of a single 
 cigar, and that the Commissioner of Internal Revenue 
 may, by regulation, require the manufacturer or importer 
 to affix to each box or container a conspicuous label indi- 
 cating by letter the clause of this section under which the 
 cigars therein contained have been tax-paid, which must 
 correspond with the tax-paid stamp on said box or con- 
 tainer; (f) on cigarettes made of tobacco, or any substitute Cigarettes 
 therefor, made in or imported into the Umted States, 
 and weighing not more than three pounds per thousand, 
 80 cents per thousand; weighing more than three pounds 
 per thousand, $1 .20 per thousand. 
 
 Every manufacturer of cigarettes (including small cigars Packages 
 weighing not more than three pounds per thousand) shall for 
 put up all the cigarettes and such small cigars that he Cigarettes 
 manufactures or has manufactured for him, and sells or 
 removes for consumption or use, in packages or parcels 
 containing five, eight, ten, twelve, fifteen, sixteen, twenty, 
 
 [85] 
 
Tobacco and 
 Snuff 
 
 Packages for 
 Tobacco and 
 Snnfif 
 
 Effective 
 Date of Tax 
 
 twenty-four, forty, fiftv, eighty, or one hundred cigarettes 
 each, and shall securely affix to each of said packages or 
 parcels a suitable stamp denoting the tax thereon and shall 
 properly cancel the same prior to such sale or removal for 
 consumption or use under such regulations as the Com- 
 missioner of Internal Revenue, with the approval of the 
 Secretary of the Treasury, shall prescribe; and all cigar- 
 ettes imported from a foreign country shall be packed, 
 stamped, and the stamps canceled in a like manner, in 
 addition to the import stamp indicating inspection of the 
 custom-house before they are withdrawn therefrom. 
 
 Sec. 401. That upon all tobacco and snuff hereafter 
 manufactured and sold, or removed for consumption or 
 use, there shall be levied and collected, in addition to the 
 tax now imposed by law upon such articles, a tax of 5 cents 
 per pound, to be levied, collected, and paid under the pro- 
 visions of existing law. 
 
 In addition to the packages provided for under existing 
 law, manufactured tobacco and snuff may be put up and 
 prepared by the manufacturer for sale or consumption, in 
 packages of the following description: Packages con- 
 taining one-eighth, three-eighths, five-eighths, seven-eighths, 
 one and one-eighth, one and three-eighths, one and five- 
 eighths, one and seven-eighths, and five ounces. 
 
 Sec. 402. That sections four hundred, four hundred 
 and one, and four hundred and four, shall take effect 
 thirty days after the passage of this Act: Provided, That 
 after the passage of this Act and before the expiration 
 of the aforesaid thirty days, cigarettes and manufactured 
 tobacco and snuff may be put up in the packages now 
 provided for by law or in the packages provided for in 
 sections four hundred and four hundred and one. 
 
 Sec. 403. That there shall also be levied and collected, 
 upon all manufactured tobacco and snuff in excess of one 
 hundred pounds, or upon cigars or cigarettes in excess of 
 one thousand, which were manufactured or imported, and 
 removed from factory or custom-house prior to the 
 passage of this Act, bearing tax-paid stamps affixed to 
 such articles for the payment of the taxes thereon, and 
 which are, on the day after this Act is passed, held and 
 intended for sale by any person, corporation, partnership, 
 or association, and upon all manufactured tobacco, 
 snuff, cigars, or cigarettes, removed from factory or 
 custom-house after the passage of this Act, but prior to 
 
 [86] 
 
the time when the tax imposed by section four hundred 
 or section four hundred and one, upon such articles 
 takes effect, an additional tax equal to one-half the tax 
 imposed by such sections upon such articles. 
 
 Sec. 404. That there shall be levied, assessed, and Cigarette 
 collected upon cigarette paper made up into packages, Papers and 
 books, sets, or tubes, made up in or imported into the Tubes 
 United States and intended for use by the smoker in 
 making cigarettes the following taxes: On each package, 
 book, or set, containing more than twenty-five but not 
 more than fifty papers, one-half of 1 cent; containing 
 more than fifty but not more than one hundred papers, 1 
 cent; containing more than one hundred papers, 1 cent 
 for each one hundred papers or fractional part thereof; 
 and upon tubes, 2 cents for each one hundred tubes or 
 fractional part thereof. 
 
 Title V — War Tax on Facilities Furnished 
 by Public Utilities and Insurance 
 
 Sec. 500. That from and after the first day of Freight 
 November, nineteen hundred and seventeen, there shall be 
 levied, assessed, collected, and paid (a) a tax equivalent to 
 three per centum of the amount paid for the transportation 
 by rail or water or by any form of mechanical motor 
 power when in competition with carriers by rail or water Express 
 of property by freight consigned from one point in the 
 United States to another; (b) a tax of 1 cent for each 
 20 cents, or fraction thereof, paid to any person, corpora- 
 tion, partnership, or association, engaged in the business 
 of transporting parcels or packages by ex^jress over reg- 
 ular routes between fixed terminals, for the transportation 
 of any package, parcel, or shipment by express from one 
 point in the United States to another: ProvidedyThat noth- 
 ing herein contained shall be construed to require the 
 carrier collecting such tax to list separately in any bill 
 of lading, freight receipt, or other similar document, the Passenger 
 amount of the tax herein levied, if the total amount of the Transp^r- 
 freight and tax be therein stated; (c) a tax equivalent to tation 
 eight per centum of the amount paid for the transporta- 
 tion of persons by rail or water, or by any form of mechani- 
 cal motor power, on a regular established line, when in 
 
 [87] 
 
competition with carriers by rail or water, from one 
 point in the United States to another or to any point 
 m Canada or Mexico, where the ticket therefor is sold 
 or issued in the United States, not including the amount 
 paid for commutation or season tickets for trips less than 
 thirty miles, or for transportation the fare for which does 
 not exceed 35 cents, and a tax equivalent to ten per centum 
 of the amount paid for seats, berths, and staterooms in par- 
 lor cars, sleeping cars, or on vessels. If a mileage book 
 used for such transportation or accommodation has been 
 
 Eurchased before this section takes effect, or if cash fare 
 e paid, the tax imposed by this section shall be collected 
 from the person presenting the mileage book, or pay- 
 ing the cash fare, by the conductor or other agent, when 
 presented for such transportation or accommodation, and 
 the amount so collected shall be paid to the United States 
 in such manner and at such times as the Commissioner 
 of Internal Revenue, with the approval of the Secretary 
 of the Treasury, may prescribe; if a ticket (other than 
 a mileage book) is bought and partially used before this 
 section goes into effect it shall not be taxed, but if bought 
 but not su u ed before this section takes effect, it shall not 
 be valid for passage until the tax has been paid and such 
 payment evidenced on the ticket in such manner as the 
 Commissioner of Internal Revenue, with the approval of 
 the Secretary of the Treasury, may by regulation pre- 
 scribe; (d) a tax equivalent to five per centum of the 
 amount paid for the transportation of oil by pipe line; 
 (e) a tax of 5 cents upon each telegraph, telephone, 
 or radio, dispatch, message, or conversation, which orig- 
 inates within the United States, and for the transmission 
 of which a charge of 15 cents or more is imposed: Providedy 
 That only one pajTnent of such tax shall be required, 
 notwithstanding the lines or stations of one or more 
 persons, corporations, partnerships, or associations shall 
 be used for the transmission of such dispatch, message, 
 or conversation. 
 
 Sec. 501. That the taxes imposed by section five hun- 
 dred shall be paid by the person, corporation, partnership, 
 or association paying for the services or facilities rendered. 
 
 In case such carrier does not, because of its owner- 
 ship of the commodity transported, or for any other reason, 
 receive the amount which as a carrier it would otherwise 
 charge, such carrier shall pay a tax equivalent to the tax 
 
 [88) 
 
which would be imposed upon the transportation of such Transpop- 
 commodity if the carrier received payment for such trans- tation 
 portation: Provided^ That in case of a carrier which on 
 May first, nineteen hundred and seventeen, had no rates 
 or tariffs on file with the proper Federal or State authority, 
 the tax shall be computed on the basis of the rates or tariffs 
 of other carriers for like services as ascertained and deter- 
 mined by the Commissioner of Internal Revenue: Provided 
 further^ That nothing in this or the preceding section 
 shall be construed as imposing a tax (a) upon the trans- 
 portation of any commodity which is necessary for the use 
 of the carrier in the conduct of its business as such and is 
 intended to be so used or has been so used; or (b) upon 
 the transportation of company material transported by 
 one carrier, which constitutes a part of a railroad system 
 for another carrier which is also a part of the same system. 
 
 Sec. 502. That no tax shall be imposed under section 
 five hundred upon any payment received for sersdcee 
 rendered to the United States, or any State, Terri- 
 tory, or the District of Columbia. The right to exemption 
 under this section shall be evidenced in such manner as the 
 Commissioner of Internal Revenue, with the approval of 
 the Secretary of the Treasury, may by regulation prescribe. 
 
 Sec. 503. That each person, corporation, partnership, 
 or association receiving any payments referred to in section 
 five hundred shall collect the amount of the tax, if any, 
 imposed by such section from the person, corporation, part- 
 nership, or association making such payments, and shall 
 make monthly returns under oath, in duplicate, and pay 
 the taxes so collected and the taxes imposed upon it under 
 paragraph two of section five hundred and one to the col- 
 lector of internal revenue of the district in which the prin- 
 cipal office or place of business is located. Such returns 
 shall contain such information, and be made in such man- 
 ner, as the Commissioner of Internal Revenue, with the 
 approval of the Secretary of the Treasury, may by reg- 
 ulation prescribe. 
 
 Sec. 504. That from and after the first day of Novem- 
 ber, nineteen hundred and seventeen, there shall be levied, 
 assessed, collected, and paid the following taxes on the 
 issuance of insurance policies: 
 
 (a) Life Insurance: A tax equivalent to 8 cents on \j^{^ 
 each $100 or fractional part thereof of the amount for Insurance 
 which any life is insured under any poUcy of insurance, 
 
 [89] 
 
 Officers and 
 Employes 
 of U. S. or 
 States 
 
 Returns 
 
or other instrument, by whatever name the same is called: 
 Provided y Th&t on all policies for life insurance only by 
 which a life is insured not in excess of $500, issued on the 
 industrial or weekly payment plan of insurance, the tax 
 shall be forty per centum of the amount of the first weekly 
 premium : Provided further y That policies of reinsurance 
 shall be exempt from the tax imposed by this subdivision. 
 
 (b) Marine, Inland, and Fire Insurance: A tax 
 equivalent to 1 cent on each dollar or fractional part 
 thereof of the premium charged under each policy of in- 
 surance or other instrument by whatever name the same 
 is called, whereby insurance is made or renewed upon 
 property of any description (including rents or profits), 
 whether against peril by sea or inland waters, or by fire 
 or lightning, or other peril: Provided^ That policies of 
 reinsurance shall be exempt from the tax imposed by this 
 subdivision. 
 
 (c) Casualty Insurance: A tax equivalent to 1 cent 
 on each dollar or fractional part thereof of the premium 
 charged under each policy of insurance or obligation of 
 the nature of indemnity for loss, damage, or liability 
 (except bonds taxable under subdivision two of schedule 
 A of title VIII) issued or executed or renewed by any 
 person, corporation, partnership, or association, transact- 
 mg the business of employer's liability, workmen's com- 
 
 Eensation, accident, health, tornado, plate glass, steam 
 oiler, elevator, burglary, automatic sprinkler, automo- 
 bile, or other branch of insurance (except life insurance, 
 and insurance described and taxed in the preceding sub- 
 division): Provided^ That policies of reinsurance be ex- 
 empt from the tax imposed by this subdivision. 
 
 (d) Policies issued by any person, corporation, part- 
 nership, or association, whose income is exempt from taxa- 
 tion under title I of the Act entitled "An Act to increase 
 the revenue, and for other purposes, " approved Septem- 
 ber eighth, nineteen hundred and sixteen, shall be exempt 
 from the taxes imposed by this section. 
 
 Title VI— Excise Taxes 
 
 Sec. 505. That every person, corporation, partner- 
 ship, or association, issuing policies of insurance upon the 
 issuance of which a tax is imposed by section five hundred 
 and four, shall, within the first fifteen days of each month, 
 
 [90] 
 
make a return under oath, in duplicate, and pay such tax 
 to the collector of internal revenue of the district in which 
 the principal office or place of business of such person, 
 corporation, partnership, or association is located. Such 
 returns shall contain such information and "be made in 
 such manner as the Commissioner of Internal Revenue, 
 with the approval of the Secretary of the Treasury, 
 may by regulation prescribe. 
 
 Sec. 600. That there shall be levied, assessed, collected , 
 and paid — 
 
 (a) Upon all automobiles, automobile trucks, auto- 
 mobile wagons, and motorcycles, sold by the manufac- 
 turer, producer, or importer, a tax equivalent to three 
 per centum of the price for which so sold; and 
 
 (b) Upon all piano players, graphophones, phono- 
 graphs, talking machines, and records used in connection 
 with any musical instrument, piano player, graphophone, 
 phonograph, or talking machine, sold by the manufacturer, 
 producer, or importer, a tax equivalent to three per 
 centum of the price for which so sold; and 
 
 (c) Upon all moving-picture films (which have not Films 
 been exposed) sold by the manufacturer or importer, 
 
 a tax equivalent to one-fourth of 1 cent per linear foot; 
 and 
 
 (d) Upon all positive moving-picture films (con- Films 
 taining a picture ready for projection) sold or leased by 
 
 the manufacturer, producer, or importer, a tax equivalent 
 to one-half of 1 cent per linear foot; and 
 
 (e) Upon any article commonly or commercially Jewelry 
 known as jewelry, whether real or imitation, sold by the 
 manufacturer, producer, or importer thereof, a tax equiv- 
 alent to three per centum of the price for which so sold; 
 
 and 
 
 (f) Upon all tennis rackets, golf clubs, baseball bats, 
 lacrosse sticks, balls of all kinds, including baseballs, 
 foot balls, tennis, golf, lacrosse, billiard and pool balls, 
 fishing rods and reels, billiard and pool tables, chess 
 and checker boards and pieces, dice, games and parts 
 of games, except playing cards and children's toys and 
 games, sold by the manufacturer, producer, or importer, 
 a tax equivalent to three per centum of the price for which 
 so sold; and 
 
 [91] 
 
 Sporting 
 Goods, 
 Games and 
 Toys 
 
(g) Upon all perfumes, essences^ extracts, toilet waters, 
 cosmetics, petroleum jellies, hair oils, pomades, hair 
 dressings, hair restoratives, hair dyes, tooth and mouth 
 washes, dentrifices, tooth pastes, aromatic cachous^ toilet 
 soaps and powders, or any similar substance, article, or 
 preparation by whatsoever name known or distinguished, 
 upon all of the above which are used or applied or in- 
 tended to be used or applied for toilet purposes, and 
 which are sold by the manufacture, importer, or producer, 
 a tax equivalent to two per centum of the price for 
 which so sold; and 
 
 (h) Upon all pills, tablets, powders, tinctures, troches 
 or lozenges, sirups, medicinal cordials or bitters, ano- 
 dynes, tonics, plasters, liniments, salves, ointments, pastes, 
 drops, waters (except those taxed under section three 
 hundred and thirteen of this Act), essences, spirits, 
 oilsj and all medicinal preparations, compounds, or com- 
 positions whatsoever, the manufacturer or producer of 
 which claims to have any private formula, secret, or 
 occult art for making or preparing the same, or has or 
 claims to have any exclusive right or title to the making 
 or preparing the same, or which are prepared, uttered, 
 vended, or exposed for sale under any letters patent, or 
 trade-mark, or which, if prepared by any formula, pub- 
 lished or unpublished, are held out or recommended to the 
 public by the makers, venders, or proprietors thereof as 
 proprietary medicines or medicinal proprietary articles or 
 preparations, or as remedies or specifics for any disease, 
 diseases, or affection whatever affecting the human or 
 animal body, and which are sold by the manufacturer, 
 producer, or importer, a tax equivalent to two per 
 centum of the price for which so sold ; and 
 
 (i) Upon all chewing gum or substitute therefor 
 sold by the manufacturer, producer, or importer, a tax 
 equivalent to two per centum of the price for which so 
 sold; and 
 
 (i) Upon all cameras sold by the manufacturer, 
 producer, or importer, a tax equivalent to three per cen- 
 tum of the price for which so sold. 
 
 Sec. 601. That each manufacturer, producer, or 
 importer of any of the articles enumerated in section 
 six hundred shall make monthly returns under oath 
 in duplicate and pay the taxes imposed on such articles 
 by this title to the collector of internal revenue for the 
 district in which is located the principal place of business. 
 
 [921 
 
Such returns shall contain such information and can bo Returns 
 made at such times and in such manner as the Com- 
 missioner of Internal Revenue, with the approval of the 
 Secretary of the Treasury, may by regulations prescribe. 
 
 Sec. 602, That upon all articles enumerated in sub- 
 divisions (a), (b), (e), (f), (g), (h), (i), or (j) of section 
 six hundred, which on the day this Act is passed are held 
 and intended for sale by any person, corporation, part- 
 nership, or association, other than (1) a retailer who is 
 not also a wholesaler or (2) the manufacturer, producer, 
 or importer thereof, there shall be levied, assessed, col- 
 lected, and paid, a tax equivalent to one-half the tax 
 imposed by each such subdivision upon the sale of the 
 articles therein enumerated. This tax shall be paid by 
 the person, corporation, partnership, or association so 
 holding such articles. 
 
 The taxes imposed by this section shall be assessed, CoUectioB 
 collected, and paid in the same manner as provided in of Tax 
 section ten hundred and two in the case of additional 
 taxes upon articles upon which the tax imposed by existing 
 law has been paid. 
 
 Nothing in this section shall be construed to impose 
 a tax upon articles sold and delivered prior to May ninth, 
 nineteen hundred and seventeen, where the title is re- 
 served in the vendor as security for the payment of the 
 purchase money. 
 
 Sec. 603. That on the day this Act takes effect, and Boats and 
 thereafter on July first in each year, and also at the time Yachts 
 of the original purchase of a new boat by a user, if on any 
 other date than July first, there shall be levied, assessed, 
 collected, and paid, upon the use of yachts, pleasure 
 boats, power boats, and sailing boats, of over five net tons, 
 and motor boats with fixed engines, not used exclusively 
 for trade or national defense, or not built according to 
 plans and specifications approved by the Navy Depart- 
 ment, an excise tax to be based on each yacht or boat, at 
 rates as follows: Yachts, pleasure boats, power boats, 
 motor boats with fixed engines, and sailing boats, of over 
 five net tons, length not over fifty feet, 50 cents for each 
 foot, length over fifty feet and not over one hundred feet, 
 $1.00 for each foot, length over one hundred feet, $2.00 
 for each foot; motor boats of not over five net tons with 
 fixed engines, $5.00. 
 
 [93] 
 
In determining the length of such yachts, pleasure boats* 
 power boats, motor boats with fixed engines, and sailing 
 boats, the measurement of over-all length shall govern. 
 
 In the case of a tax imposed at the time of the original 
 purchase of a new boat on any other date than July first, 
 the amount to be paid shall be the same number of twelfths 
 of the amount of the tax as the number of calendar 
 months, including the month of sale, remaining prior to 
 the following July first. 
 
 Title VII — War Tax on Admissions 
 and Dues 
 
 Sec. 700. That from and after the first day of Nov- 
 ember, nineteen hundred and seventeen, there shall be 
 levied, assessed, collected, and paid (a) a tax of 1 cent 
 for each 10 cents or fraction thereof of the amount paid for 
 admission to any place, including admission by season 
 ticket or subscription, to be paid by the person paying for 
 such admission: Provided^ That the tax on admission of 
 children under twelve years of age, where an admis- 
 sion charge for such children is made, shall in every 
 case be 1 cent; and persons (except bona fide em- 
 ployees, municipal officers on official business, and 
 children under twelve years of age) admitted free to 
 any place at a time when and under circumstances under 
 which an admission charge is made to other persons of the 
 same class, a tax of 1 cent for each 10 cents or fraction 
 thereof of the price so charged to such other persons for 
 the same or similar accommodations, to be paid by the 
 persons so admitted; and (c) a tax of 1 cent for each 10 
 cents or fraction thereof paid for admission to any public 
 performance for profit at any cabaret or other similar 
 entertainment to which the charge for admission is wholly 
 or in part included in the price paid for refreshment, 
 service, or merchandise; the amount paid for such admis- 
 sion to be computed under rules prescribed by the Com- 
 missioner of Internal Revenue, with the approval of the 
 Secretary of the Treasury, such tax to be paid by the 
 person paying for such refreshment, service, or merchan- 
 dise. In the case of persons having the permanent use of 
 boxes or seats in an opera house or any place of amusement 
 or a lease for the use of such box or seat in such opera 
 house or place of amusement, there shall be levied, as- 
 sessed, collected, and paid a tax equivalent to ten per 
 
 [94] 
 
centum of the amount for which a similar box or seat 
 is sold for performance or exhibition at which the box 
 or seat is used or reserved by or for the lessee or holder. 
 These taxes shall not be imposed in the case of a place the 
 maximum charge for admission to which is 5 cents, or in 
 the case of shows, rides, and other amusements (the maxi- 
 mum charge for admission to which is 10 cents) within 
 outdoor general amusement parks, or in the case of ad- 
 missions to such parks. 
 
 No tax shall be levied under this title in respect to any 
 admissions all the proceeds of which inure exclusively to the 
 benefit of religious, educational, or charitable institutions, 
 societies, or organizations, or admissions to agricultural 
 fairs, none of the profits of which are distributed to stock- 
 holders or members of the association conducting the same. 
 
 The term '^admission" as used in this title includes 
 seats and tables, reserved or otherwise, and other similar 
 accommodations, and the charges made therefor. 
 
 Sec. 701. That from and after the first day of Novem- 
 ber, nineteen hundred and seventeen, there shall be levied, 
 assessed, collected, and paid, a tax equivalent to ten per 
 centum of any amount paid as dues or membership fees 
 (including initiation fees), to any social, athletic, or sporting 
 club or organization, where such dues or fees are in excess 
 of $12 per year; such taxes to be paid by the person 
 paying such dues or fees: Provided, That there shall be 
 exempted from the provisions of this section all amounts 
 paid as dues or fees to a fraternal beneficiary society, 
 order, or association, operating under the lodge system or 
 for the exclusive benefit of the members of a fraternity 
 itself operating under the lodge system, and providing 
 for the payment of life, sick, accident, or other benefits 
 to the members of such society, order, or association or 
 their dependents. 
 
 Sec. 702. That every person, corporation, partner- 
 ship, or association (a) receiving any payments for such 
 admission, dues, or fees, shall collect the amount of the tax 
 imposed by section seven hundred or seven hundred and 
 one from the person making such payments, or (b) ad- 
 mitting any person free to any place for admission to 
 which a charge is made shall collect the amount of the 
 tax imposed by section seven hundred from the person 
 so admitted, and (c) in either case shall make returns and 
 payments of the amounts so collected, at the same time 
 
 [95] 
 
 Admissions 
 Exempt 
 
 Religious 
 and 
 
 Charitable 
 Entertain- 
 ments 
 
 Admission 
 Defined 
 
 Dues 
 
 Collection 
 of Tax 
 
and in the same manner as provided in section five hundred 
 and three of this Act. 
 
 Title Vni— War Stamp Taxes 
 
 Sec. 800. That on and after the first day of Decem- 
 ber, nineteen hundred and 8evente<*n, there shail he levied, 
 collected, and paid, for and in respect of the several bonds, 
 debentures, or certificates of stock and of indebtedness 
 and other documents, instruments, matters, aod things 
 mentioned and described in Schedule A of this title, or for 
 or in respect of the vellum, parchment, or paper upon 
 which such instruments, mutters, or things, or any of 
 them, are written or printed, by any person, corporation, 
 partnership, or association who makes, signs, issues, 
 sols, removes, consigns, or ships the same, or for whose 
 use or benefit the same are made, signed, issued, sold, 
 removed, consigned, or shipped, the several taxes specifiea 
 in S'lch schedule. 
 
 Sec. 801. That there shall not be taxed under this title 
 any bond, note, or other instrument, issued by the United 
 States, or by any foreign Government, or by any State, 
 Territory, or the District of Columbia, or local subdivi* 
 sion thereof, or municipal or other corporation exercising 
 the taxing power, when issued in the exercise of a strictly 
 governmental, taxing, or municipal function; or stocks and 
 bonds issu'^d by cooperative building and loan associations 
 which are organized and operated exclusively for the bene- 
 fit of their members and make loans only to their share 
 holders, or by mutual ditch or irrigating companies. 
 
 Sec. 802. That whoever— 
 
 (a) Makes, signs, issues, or accepts, or causes to be 
 made, signed, issued, or accepted, any instrument, docu- 
 ment, or paper of any kind or description whatsoever 
 without the full amount of tax thereon being duly paid; 
 
 (b) Consigns or ships, or causes to be consigned or 
 shipped, by parcel post any parcel, package, or article 
 without the full amount of tax being duly paid; 
 
 (c) Manufacturers or imports and sells, or offers for 
 sale, or causes to be manufactured or imported and sold, or 
 offered for sale, any playing cards, package, or other article 
 without the full amount of tax being duly paid; 
 
 (d) Makes use of an adhesive stamp to denote any tax 
 imposed by this title without canceling or obliterating such 
 stamp as prescribed in section eight hundred and four; 
 
 [96] 
 
Is guilty of a misdemeanor and upon conviction thereof 
 shall pay a fine of not more than $100 for each offense. 
 
 Sec. 803. That whoever— 
 
 (a) Fraudulently cuts, tears, or removes from any vel- 
 lum, parchment, paper, instrument, writing, package, or 
 article, upon which any tax is imposed by this title, any 
 adhesive stamp or the impression of any stamp, die, plate, 
 or other article provided, made, or used in pursuance of 
 this title; (b) Fraudulently uses, joins, fixes, or places to, 
 with, or upon any vellum, parchment, paper, instrument, 
 writing, package, or article, upon which any tax is im- 
 posed by this title, (1) any adhesive stamp, or the impres- 
 sion of any stamp, die, plate, or other article, which has 
 been cut, torn, or removed from any other vellum, parch- 
 ment, paper, instrument, writing, package, or article, 
 upon which any tax is imposed by this title or (2) any 
 adhesive stamp or the impression of any stamp, die, plate, 
 or other article of insufficient value; or (3) any forged or 
 counterfeit stamp, or the impression of any forged or 
 counterfeited stamp, die, plate, or other article; 
 
 (c) Willfully removes, or alters the cancellation, or 
 defacing marks of, or otherwise prepares, any adhesive 
 stamp, with intent to use, or cause the same to be used, 
 after it has been already used, or knowingly or willfulty 
 buys, sells, offers for sale, or gives away, any such washed 
 or restored stamp to any person for use, or knowingly uses 
 the same; 
 
 (d) Knowingly and without lawful excuse (the burden 
 of proof of such excuse being on the accused) has in posses- 
 sion any washed, restored, or altered stamp, which has been 
 removed from any vellum, parchment, paper, instrument, 
 writing, package, or article. 
 
 Is guilty of a misdemeanor, and upon conviction shall 
 be punished by a fine of not more than $1,000, or by im- 
 prisonment for not more than five years, or both, in the 
 discretion of the court, and any such reused, canceled, or 
 counterfeit stamp and the vellum, parchment, document, 
 paper, package, or article upon which it is placed or 
 impressed shall be forfeited to the United States. 
 
 Sec. 804. That whenever an adhesive stamp is used for 
 denoting any tax imposed by this title, except as herein- 
 after provided, the person, corporation, partnership, or 
 association using or affixing the same shall write or stamp 
 or cause to be written or stamped thereupon the initials of 
 
 [97] 
 
his or its name and the date upon which the same is at- 
 tached or used, so that the same may not again be used: 
 Provided, That the Commissioner of Internal Revenue may 
 prescribe such other method for the cancellation of such 
 stamps as he may deem expedient. 
 
 Sec. 805. (a) That the CJommissioner of Internal 
 Revenue shall cause to be prepared and distributed for the 
 payment of the taxes prescribed in this title suitable stamps 
 denoting the tax on the document, article, or thing to which 
 the same may be affixed, and shaU prescribe such method 
 for the affixing of said stamps in substitution for or in 
 addition to the method provided in this title, as he may 
 deem ex-pedient. 
 
 (b) The Commissioner of Internal Revenue, with the 
 approval of the Secretary of the Treasury, is authorised 
 to procure any of the stamps provided for in this title by 
 contract whenever such stamps can not be speedily pre- 
 pared by the Bureau of Engraving and Printing; but this 
 authority shall expire on the first day of January, nineteen 
 hundred and eighteen, except as to imprinted stamps fur- 
 nished under contract, authorized by the Comnussioner of 
 Internal Revenue. 
 
 (c) All internal-revenue laws relating to the assessment 
 and collection of taxes are hereby extended to and made a 
 part of this title, so far as apphcable, for the purpose of 
 collecting stamp taxes omitted through mistake or fraud 
 from any instrument, document, paper, writing, parcel, 
 package, or article named herein. 
 
 Sec. 806. That the Commissioner of Internal Revenue 
 shall furnish to the Postmaster General without prepay- 
 ment a suitable quantity of adhesive stamps to be distri- 
 buted to and kept on sale by the various postmasters in the 
 United States. ITie Postmaster General may require each 
 such postmaster to give additional or increased bond as 
 postmaster for the value of the stamps so furnished, and 
 each such postmaster shall deposit the receipts from the 
 sale of such stamps to the credit of and render accounts to 
 the Postmaster General at such times and in such form as 
 he may by regulations prescribe. The Postmaster General 
 shall at least once monthly transfer all collections from this 
 source to the Treasury as internal-revenue (collections.) 
 
 Sec. 807. That the collectors of the several districts 
 shall furnish without prepayment to any assistant treasurer 
 or designated depository of the United States located in 
 
 198] 
 
their respective collection districts a suitable quantity of 
 adhesive stamps for sale. In such cases the collector 
 may require a bond, with sufficient sureties, to an amount 
 equal to the value of the adhesive stamps so furnished, 
 conditioned for the faithful return, whenever so required, 
 of all quantities or amounts undisposed of, and for the 
 payment monthly of all quantities or amounts sold or not 
 remaining on hand. The Secretary of the Treasury may 
 from time to time make such regulations as he may find 
 necessary to insure the safe-keeping or prevent the illegal 
 use of all such adhesive stamps. 
 
 SCHEDULE A.— STAMP TAXES 
 
 1. Bonds of indebtedness: Bonds, debentures, or cer- 
 tificates of indebtedness issued on and after the first day of 
 December, nineteen hundred and seventeen, by any 
 person, corporation, partnership, or association, on each 
 $100 of face value or fraction thereof, 5 cents: Provided, 
 That every renewal of the foregoing shall be taxed as a 
 new issue: Provided further , That when a bond con- 
 ditioned for the repayment or payment of money is 
 given in a penal sum greater than the debt secured, the tax 
 shall be based upon the amount secured. 
 
 2. Bonds, indemnity and surety: Bonds for indemnify- 
 ing any person, corporation, partnership, or corporation, 
 who shall have become bound or engaged as surety, and all 
 bonds for the due execution or performance of any con- 
 tract, obligation, or requirement, or the duties of any 
 office or position, and to account for money received by 
 virtue thereof, and all other bonds of any description, ex- 
 cept such as may be required in legal proceedings, not 
 otherwise provided for in this schedule, 50 cents: Pro- 
 vided, That where a premium is charged for the execution 
 of such bond the tax shall be paid at the rate of one per 
 centum on each dollar or fractional part thereof of the 
 premium charged: Provided further, That policies of re- 
 insurance shall be exempt from the tax imposed by this 
 subdivision. 
 
 3. Capital stock, issue: On each original issue, whether 
 on organization or reorganization, of certificates of stock 
 by any association, company, or corporation, on each 
 $100 of face value or fraction thereof, 5 cents: Provided, 
 That where capital stock is issued without face value, the 
 tax shall be 5 cents per share, unless the actual value is 
 
 [99] 
 
 Bonds of 
 Indebted- 
 
in excess of $100 per share., in which case the tax shall be 5 
 cents on each $100 of actual value or fraction thereof. 
 
 The stamps representing the tax imposed by this 
 subdivision shall be attached to the stock books and not 
 to the certificates issued. 
 
 4. Capital stock, sales or transfers: On all sales, or 
 agreements to sell, or memoranda of sales or deliveries of, 
 or transfers of legal title to shares or certificates of stock 
 in any association, company, or corporation, whether 
 made upon or shown by the books of the association, com- 
 pany, or corporation, or by any assignment in blank, or by 
 any deliver>', or by any paper or agreement or memoran- 
 dum or other evidence of transfer or sale, whether entitling 
 the holder in any manner to the benefit of such stock or 
 not, on each $100 of face value or fraction thereof, 2 cents, 
 and where such shares of stock are without par value, the 
 tax shall be 2 cents on the transfer or sale or agreement to 
 sell on each share, unless the actual value thereof is in ex- 
 cess of $100 per share, in which case the tax shall be 2 cents 
 on each $100 of actual value or fraction thereof: Proxridedy 
 That it is not intended by this title to impose a tax upon 
 an agreement evidencing a deposit of stock certificates as 
 collateral security for money loaned thereon, which stock 
 certificates are not actually sold, nor upon such stock 
 certificates so deposited: Provided further ^ That the 
 tax shall not be imposed upon deliveries or transfers to a 
 broker for sale, nor upon deliveries or transfers by a broker 
 to a customer for whom and upon whose order he has pur- 
 chased same, but such deliveries or transfers shall be ac- 
 companied by a certificate setting forth the facts: Pro- 
 vided further, That in case of sale where the evidence of 
 transfer is shown only by the books of the company the 
 stamp shall be placed upon such books; and where the 
 change of owTiership is bj^ transfer of the certificate the 
 stamp shall be placed upon the certificate; and in cases of 
 an agreement to sell or where the transfer is by dehvery of 
 the certificate assigned in blank there shall be made and 
 delivered by the seller to the buyer a bill or memorandum 
 of such sale, to which the stamp shall be aflTixed; and every 
 bill or memorandum of sale or agreement to sell before 
 mentioned shall show the date thereof, the name of the 
 seller, the amount of the sale, and the matter or thing to 
 which it refers. Any person or persons liable to pay the 
 tax as herein provided, or anyone who acts in the matter as 
 agent or broker for such person or persons who shall make 
 [100] 
 
any such sale, or who shall in pursuanc3 of ?iny aacU sale. 
 deliver any stock or e^udence o*f the sale of any stock or bill 
 or memorandum thereof, as herein required, without 
 having the proper stamps affixed thereto with intent to 
 evade the foregoing provisions shall be deemed guilty of a 
 misdemeanor, and upon conviction thereof shall pa>' a fine 
 of not exceed.ing $1,000, or be imprisoned not more than 
 six months, or both, at the discretion of the court. 
 
 5. Produce, sales of, on exchange: Upon each sale. Sales of 
 agreement of sale, or agreement to sell, including so-called Produce 
 transferred or scratch sales, any products or merchandise 
 at any exchange, or board of trade, or other similar place, 
 for future delivery, for each $100 in value of the merchan- 
 dise covered by said sale or agreement of sale or agreement 
 to sell, 2 cents, and for each additional $100 or fractional 
 part thereof in excess of $100, 2 cents: Provided^ That on 
 every sale or agreement of sale or agreement to sell as 
 aforesaid there shall be made and delivered by the seller 
 to the buyer a bill, memorandum, agreement, or other 
 evidence of such sale, agreement of sale, or agreement to 
 sell, to which there shall be affixed a lawful stamp or stamps 
 in value equal to the amount of the tax on such sale: 
 Provided furtheTy That sellers of commodities described 
 herein, having paid the tax provided by this subdivision, 
 may transfer such contracts to a clearing house corpora- 
 tion or association, and such transfer shall not be deemed 
 to be a sale, or agreement of sale, or an agreement to sell 
 within the provisions of this Act, provided that such 
 transfer shall not vest any beneficial interest in such 
 clearing house association but shall be made for the sole 
 purpose of enabling such clearing house association to 
 adjust and balance the accounts of the members of said 
 clearing house association on their several contracts. 
 And every such bill, memorandum, or other evidence of 
 sale or agreement to sell shall show the date thereof, the 
 name of the seller^ the amount of the sale, and the matter 
 or thing to which it refers; and any person or persons liable 
 to pay the tax as herein provided, or anyone who acts in 
 the matter as agent or broker for such person or persons, 
 who shall make any such sale or agreement of sale, or 
 agreement to sell, or who shall, in pursuance of any suqh 
 sale, agreement of sale, or agreement to sell, deliver any 
 such products or merchandise without a bill, memoran- 
 dum, or other evidence thereof as herein required, or who 
 shall deliver such bill, memorandum, or other evidence of 
 [101] 
 
Drafts and 
 Checks 
 
 SJ^ls, or agreeDjeot to sell, without having the proper 
 stamps affixed thereto, with intent to evade the fore- 
 going provisions, shall be deemed guilty of a misdemeanor, 
 and upon conviction thereof shall pay a fine of not exceed- 
 ing $1,000, or be imprisoned not more than six months, or 
 both, at the discretion of the court. 
 
 That no bill, memorandum, agreement, or other evidence 
 of such sale, or agreement of sale, or agreement to sell, in 
 case of cash sales of products or merchandise for immediate 
 or prompt delivery which in good faith are actually 
 intended to be deUvered shall be subject to this tax. 
 
 6. Drafts or checks payable otherwise than at sight or 
 on demand, promissory notes, except bank notos Issued 
 for circulation, (and for each renewal of the same), for a 
 sum not exceeding $100, 2 cents; and for each additional 
 $100 or fractional part- thereof, 2 cents. 
 Couveyances 7. Conversance: Deed, instrument, or writing, whereby 
 any lands, tenements, or other realty sold shall be granted, 
 assigned, transferred, or otherwise convej'ed'to, or vested 
 in, the purchaser or purchasers, or any other person or 
 persons, by his, her, or their direction, when the consider- 
 ation or value of the interest or property conveyed, ex- 
 clusive of the value of any lien or encumbrance remaining 
 thereon at the time of sale, exceeds $100 and doe? not ex- 
 ceed $500, 50 cents; and for each additional $500 or 
 fractional part thereof 50 cents: Provided, That nothing 
 contained in this paragraph shall be so construed as to 
 impose a tax upon any instrument or writing given to 
 secure a debt. 
 
 8. Entry of any goods, wares, or merchandise at any 
 custom-house, either for consumption or warehousing, 
 not exceeding $100 in value, 25 cents; exceeding $100 ana 
 not exceeding $500 in value, 50 cents; exceeding $500 in 
 value, $1. 
 
 9. Entry for the withdrawal of any goods or merchan- 
 dise from customs bonded warehouse, 50 cents. 
 
 10. Passage ticket, one way or round trip, for each 
 passenger, sold or issued in the United States for passage by 
 any vessel to a port or place not in the United 
 States, Canada, or Mexico, if costing not exceeding $30, 
 $1; costing more than $30 and not exceeding $60, $3; 
 costing more than $60, $5: Provided, That such passage 
 tickets, costing $10 or less, shall be exempt from taxa- 
 tion. 
 
 [102] 
 
 Entries 
 
 Passage 
 TickeU 
 
Powers of 
 Attorney 
 
 11. Proxy for voting at any election for officers, or Proxies 
 meeting for the transaction of business, of any incorporated 
 company or association, except religious, educational, char- 
 itable, fraternal, or literary societies, or public ceme- 
 teries, 10 cents. 
 
 12. Power of attorney granting authority to do or per- 
 form some act for or in behalf of the grantor, which author- 
 ity is not otherwise vested in the grantee, 25 cents: Pro- 
 mdedy That no stamps shall be required upon any papers 
 necessary to be used for the collection of claims from the 
 United States or from any State for pensions, back pay, 
 bounty, or for property lost in the military or naval ser- 
 vice or upon powers of attorney required in bankruptcy 
 cases. 
 
 13. Playing cards: UpoK every pack of playing cards 
 containing not more than fif ty-iour cards, manufactured or 
 imported, and sold, or removed for consumption or sale, 
 after the passage of this Act, a tax of 5 cents per pack in 
 addition to the tax imposed under existing law. 
 
 14. Parcel-post packages: Upon every parcel or pack- 
 age transported from one point in the United States to 
 another by parcel post on which the postage amounts to 
 25 cents or more, a tax of 1 cent for each 25 cents or frac- 
 tional part thereof charged for such transportation, to 
 be paid by the consignor. 
 
 No such parcel or package shall be transported until 
 a stamp or stamps representing the tax due shall have been 
 affixed thereto. 
 
 Playing 
 Cards 
 
 Parcel Post 
 
 Title IX— War Estate Tax 
 
 Sec. 900. That in addition to the tax imposed by 
 section two hundred and one of the Act entitled "An 
 Act to increase the revenue, and for other purposes," 
 approved September eighth, nineteen hundred and six- 
 teen, as amended — 
 
 (a) A tax equal to the following percentages of its Rates of Tax 
 value is hereby imposed upon the transfer of each net 
 estate of every decedent dying after the passage of this 
 Act, the transfer of which is taxable under such section 
 (the value of such net estate to be determined as provided 
 in Title II of such Act of September eighth, nineteen 
 hundred and sixteen) : 
 
 One-half of one per centum of the amount of such net 
 estate not in excess of $50,000. 
 
 [103] 
 
One per centum of the amount by which such net 
 estate exceeds $oO,000 and does not exceed $150,000. 
 
 One and one-half per centum of the amount by which 
 such net estate exceeds $150,000 and does not exceed $250,- 
 000. 
 
 Two per centum of the amount by which such net 
 estate exceeds $250,000 and does not exceed $450,000. 
 
 Two and one-half per centum of the amount by which 
 such net estate exceeds $450,000 and does not exceed 
 $1,000,000. 
 
 Three per centum of the amount by which such net 
 estate exceeds $1,000,000 and does not exceed $2,000,000. 
 
 Three and one-half per centum of the amount by which 
 such net estate exceeds $2,000,000 and does exceed $3,000,- 
 000. 
 
 Four per centum of the amount by which such net 
 estate exceeds $3,000,000 and does not exceed $4,000,000. 
 
 Four and one-half per centum of the amount by which 
 such net estate exceeds $4,000,000 and does not exceed 
 $5,000,000. 
 
 Five per centum of the amount by which such net esiate 
 exceeds $5,000,000 and does not exceed $8,000,000. 
 
 Seven per centum of the amount by which such net 
 estate exceeds $8,000,000 and does not exceed $10,000,000; 
 and 
 
 Ten per centum of the amount by which such net estate 
 exceeds $10,000,000. 
 
 Sec. 901. That the tax imposed by this title shall not 
 apply to the transfer of the net estate of any decedent 
 dymg while serving in the military or naval forces of the 
 United States, during the continuance of the war in which 
 the United States is now engaged, or if death results from 
 injuries received or disease contracted in such service, 
 within one year after the termination of such war. For 
 the purposes of this section the termination of the war 
 shall be evidenced by the proclamation of the President. 
 
 Title X -Administrative Provisions 
 
 Sec. 1000. That there shall be levied, collected, and paid 
 in the United States, upon articles coming into the United 
 States from the West Indian Islands acquired from Den- 
 mark, a tax equal to the internal-revenue tax imposed in 
 
 [104] 
 
the United Stated upon like articles of domestic manufac- 
 ture; such articles shipped from said islands to the United 
 States shall be exempt from the payment of any tax im- 
 posed by the internal-revenue laws of said islands: Pro- 
 vided, That there shall be levied, collected, and paid in said 
 islands, upon articles imported from the United States, 
 a tax equal to the internal-revenue tax imposed in said 
 islands upon like articles there manufactured; and sach 
 articles going into said islands from the United States 
 shall be exempt from payment of any tax imposed by the 
 internal-revenue laws of the United States. 
 
 Sec. 1001. That all administrative, special, or stamp 
 provisions of law, including the law relatmg to the assess- 
 ment of taxes, so far as applicable, are hereby extended 
 to and made a part of this Act, and every person, corpora- 
 tion, partnership, or association liable to any tax imposed 
 by this Act, or for the collection thereof, shall keep such 
 records and render, under oath, such statements and re- 
 turns, and shall comply with such regulations as the Com- 
 mi&sioner of Internal Revenue, with the approval of the 
 Secretary of the Treasury, may from time to time prescribe. 
 
 Sec. 1002. That where additional taxes are im- 
 posed by this Act upon articles or commodities, upon which 
 the tax imposed by existing law has been paid, the person, 
 corporation, partnership, or association required by this 
 Act to pay the tax shall, within thirty days after its 
 passage, make return under oath in such form and under 
 such regulations as the Commissioner of Internal Revenue 
 with the approval of the Secretary of the Treasury shall 
 prescribe. Payment of the tax shown to be due 
 may be extended to a date not exceeding seven months from 
 the passage of this Act, upon the filing of a bond for 
 payment in such form and amount and with such sureties 
 as the Commissioner of Internal Revenue, with the appro- 
 val of the Secretary of the Treasury, may prescribe. 
 
 Sec. 1003. That in all cases where the method 
 of collecting the tax imposed by this Act is not specifically 
 provided, the tax shall be collected in such manner as the 
 Commissioner of Internal Revenue with the approval of 
 the Secretary of the Treasury may prescribe. All admin- 
 istrative and penalty provisions of Title VIII of this Act, 
 in so far as applicable, shall apply to the collection of any 
 tax which the Commissioner of Internal Revenue deter- 
 mines or prescribes shall be paid by stamp. 
 
 [105] 
 
 Admifistra- 
 tive Provi- 
 sions of Law 
 Applicable 
 
 Payment of 
 
 Additional 
 
 Taxes 
 
 Collection of 
 Taxes 
 
Regulations 
 
 Use of 
 Stamps on 
 Hand 
 
 Penalty for Sec. 1004. That whoever fails to make any return 
 Failure to required by this Act or the regulations made under author- 
 Make Return ity thereof within the time prescribed or who makes any 
 false or fraudulent return, and whoever evades or attempts 
 to evade any tax imposed by this Act or fails to collect or 
 tnil^ to account for and pay over any such tax^ shall be 
 subject to a penalty of not more than $1,000, or to imprison- 
 ment for not more than one year, or both, at the discretion 
 of the court, and in addition thereto a penalty of double the 
 tax evaded, or not collected, or accounted for and paid over, 
 to be assessed and collected in the same manner as taxes 
 are assessed and collected, in any case in which the pun- 
 ishment is not otherwise specifically provided. 
 
 Sec. 1005. That the Commissioner of Internal 
 Revenue, with the approval of the Secretary of the Treas- 
 ury, is hereby authorized to make all needful rules and 
 regulations for the enforcement of the provisions of this 
 Act. 
 
 Sec. 1006. That where the rate of tax imposed by 
 this Act, payable by stamps, is an increase over previously 
 existing rates, stamps on hand in the collectors' offices and 
 in the Bureau of Internal Revenue may continue to be 
 used until the supply on hand is exhausted, but shall be 
 sold and accounted for at the rates provided by this Act, 
 and assessment shall be made against manufacturers and 
 other taxpayers having such stamps on hand on the day 
 this Act takes effect for the difference between the amount 
 paid for such stamps and the tax due at the rates provided 
 by this Act. 
 Contracts Sec. 1007. That (a) if any person, corporation, part- 
 
 Made Prior nership, or association has prior to May ninth, nineteen 
 to May 9, 1917 hundred and seventeen, made a bona fide contract with 
 a dealer for the sale, after the tax takes effect, of any 
 article (or, in the case of moving-picture films, such a 
 contract with a dealer, exchange, or exhibitor, for the sale 
 or lease thereof) upon which a tax is imposed under Title 
 III, IV, or VI, or under subdivision thirteen of Schedule A 
 of Title VIII, or under this section, and (b) if such contract 
 does not permit the adding of the whole of such tax to the 
 amount to be paid under such contract, then the vendee 
 or lessee shall, in lieu of the vendor, or lessor, pay so much 
 of such tax as is not so permitted to be added to the con- 
 tract price. 
 
 The taxes payable by the vendee or lessee under this 
 section shall be paid to the vendor or lessor at the time 
 [106] 
 
the sale or lease is consummated, and collected, returned, and 
 paid to the United States by such vendor or lessor in the 
 same manner as provided in section five hundred and three. 
 
 The term ^'dealer" as used in this section includes a 
 vendee who purchases any article with intent to use it in 
 the manufacture or production of another article intended 
 for sale. 
 
 Sec. 1008. That in the payment of any tax under 
 this Act not payable by stamp a fractional part of a 
 cent shall be disregarded unless it amounts to one-half 
 cent or more, in which case it shall be increased to one cent. 
 
 Sec. 1009. That the Secretary of the Treasury, under 
 rules and regulations prescribed by him, shall permit tax- 
 payers liable to income and excess profits taxes to make 
 payments in advance in installments or in whole of an 
 amount not in excess of the estimated taxes which will 
 be due from them, and upon determination of the taxes 
 actually due any amount paid in excess shall be refunded 
 as taxes erroneously collected: Provided, That when pay- 
 ment is made in installments at least one-fourth of such 
 estimated tax shall be paid before the expiration of thirty 
 days after the close of the taxable year, at least an addi- 
 tional one-fourth within two months after the close of the 
 taxable year, at least an additional one-fourth within 
 four months after the close of the taxable year, and the 
 remainder of the tax due on or before the time now fixed 
 by law tor such payment: Provided further , that the Sec- 
 retary of the Treasury, under rules and regulations pre- 
 scribed by him, may allow credit against such taxes so 
 paid in advance of an amount not exceeding three per cent- 
 um per annum, calculated upon the amount so paid from 
 the date of such payment to the date now fixed by law 
 for such payment; but no such credit shall be allowed on 
 payments in excess of taxes determined to be due, nor on 
 payments made after the expiration of four and one-half 
 months after the close of the taxable year. All penalties 
 provided by existing law for failure to pay tax when due are 
 hereby made applicable to any failure to pay the tax at 
 the time or times required in this section. 
 
 Sec. 1010. That under rules and regulations prescribed 
 by the Secretary of the Treasury, collectors of internal 
 revenue may receive, at par and accrued interest, certi- 
 ficates of indebtedness issued under section six of the Act 
 entitled ** An Act to authorize an issue of bonds to meet ex- 
 
 (1071 
 
 Dealer 
 Defined 
 
 Fraction of 
 Cent 
 
 Payment in 
 Installments 
 
Certificates penditures for the national security and defense, and, for 
 of Indebted- the purpose of assisting in the prosecution of the war, 
 ness and to extend credit to foreign governments, and for other pur- 
 
 Uncertified poses, " approved April twenty -fourth, nineteen hundred 
 Checks and seventeen, and any subsequent Act or Acts, and un- 
 
 Received in certified checks in payment of income and excess profits 
 Payment taxes, during such time and under such regulations as the 
 
 of Taxes Commissioner of Internal Revenue, with the approval 
 
 of the Secretary of the Treasiuy, shall prescribe; but if a 
 check so received is not paid by the bank on which it is 
 drawn the person by whom such check has been tendered 
 shall remain liable for the payment of the tax and for 
 all legal penalties and additions the same as if such check 
 had not been tendered. 
 
 Title XI— Postal Rates 
 
 First Class Sec. 1100. That the rate of postage on all mail matter 
 
 of the first class, except postal cards, shall, thirty' days 
 after the passage of this Act be, in addition to the existing 
 rate, 1 cent for each ounce or fraction thereof: Provided, 
 That the rate of postage on drop letters of the first class 
 shall be 2 cents an ounce or fraction thereof. Postal 
 cards, and private mailing or post cards when complying 
 with the requirements of existing law, shall be transmitted 
 through the mails at 1 cent each in addition to the exist- 
 ng rate. 
 Soldiers' That letters written and mailed by soldiers, sailors, and 
 
 Mail Free marines assigned to duty in a foreign country engag:ed in 
 the present war may be mailed free of postage, subject 
 to such rules and regulations as may be prescribed by the 
 Postmaster General. 
 Second Class Sec. 1101. That on and after July first, nineteen 
 Rates hundred and eighteen, the rates of postage on publications 
 
 entered as second-class matter (including sample copies 
 to the extent of ten per centum of the weight of copies 
 mailed to subscribers during the calendar year) when sent 
 by the publisher thereof from the post office of publication 
 or other post office, or when sent by a news agent to actual 
 subscribers thereto, or to other news agents for the pur- 
 pose of sale: 
 
 (a) In the case of the portion of such publication 
 devoted to matter other than advertisements, shall be as 
 follows: (1) on and after July first, nineteen hundred and 
 
 1108] 
 
ei 
 
 ghteen, and imtii July first, nineteen hundred and nine- 
 teen, 1 }4 cents por pound or fraction thereof; (2) on and 
 after July first, nineteen hundred and nineteen, \}/2 cents 
 per pound or fraction thereof; 
 
 (b) In the case of the portion of such publication 
 devoted to advertisements the rates per pound or fraction 
 thereof for delivery within the several zones applicable 
 to fourth-class matter shaU be as follows (but where the 
 space devoted to advertisements does not exceed five per 
 centum of the total space, the rate of postage shall be the 
 same as if the whole of such publication was devoted to 
 matter other than advertisements): (1) on and after 
 July first, nineteen hundred and eighteen, and until 
 July first, nineteen hundred and nineteen, for the first 
 and second zones, IJ-^ cents; for the third zone, 1 J^ cents; 
 for the fourth zone, 2 cents; for the fifth zone, 234 cents; 
 for the sixth zone, 2J^ cents; for the seventh zone, 3 
 cents; for the eighth zone, 834 cents; (2) on and after July 
 first, nineteen hundred and nineteen, and until July first, 
 nineteen hundred and twenty, for the first and second 
 zones, 13^ cents; for the third zone, 2 cents; for the fourth 
 zone, 3 cents; for the fifth zone, 33^^ cents; for the sixth 
 zone, 4 cents; for the seventh zone, 5 cents; for the eighth 
 zone, b}/2 cents; (3) on and after July first, nineteen 
 hundred and twenty and until July first, nineteen hundred 
 and twenty-one, for the first and second zones, 1^ cents; 
 for the third zone, 23^ cents; for the fourth zone, 4 cents; 
 for the fifth zone, 4^4 cents; for the sixth zone, 53^ cents; 
 for the seventh zone, 7 cents; for the eighth zone, 1% 
 cents; (4) on and after July first, nineteen hundred and 
 twenty-one, for the first and second zones, 2 cents for the 
 third zone, 3 cents: for the fourth zone, 5 cents; for the 
 fifth zone, 6 cents; for the sixth zone, 7 cents; for the 
 seventh zone, 9 cents; for the eighth zone, 10 cents. 
 
 (c) With the first mailing of each issue of each such 
 publication, the publisher shall file with the postmaster 
 a copy of such issue, together with a statement containing 
 such information as the Postmaster General may pre- 
 scribe for determining the postage chargeable thereon. 
 
 Sec. 1102. That the rate of postage on daily news- 
 papers, when the same are deposited m a letter carrier 
 oflRce for delivery by its carriers, shall be the same as now 
 provided by law; and nothing in this title shall affect 
 existing law as to free circulation and existing rates on 
 
 109 J 
 
second-class mail matter within the county of publication : 
 Provided^ That the Postmaster General may hereafter 
 require publishers to separate or make up to zones in such 
 a manner as he may direct all mail matter of the second 
 class when offered for mailing. 
 Keligious Sec. 1103. That in the case of newspapers and periodi- 
 
 and cals entitled to be entered as second-class matter and 
 
 Educational maintained by and in the interest of religious, educational, 
 Papers scientific, philanthropic, agricultural, labor, or fraternal 
 
 organizations or associations, not organized for profit and 
 none of the net income of which inures to the benefit of 
 any private stockholder or individual, the second class 
 postage rates shall be, irrespective of the zone in which 
 delivered (except when the same are deposited in a letter- 
 carrier office for dehvery by its carriers, in which ctise the 
 rates shall be the same as now provided by law), 1 J^ cents 
 a pound or fraction thereof on and after July first, nineteen 
 hundred and eighteen, and until July first, nineteen 
 hundred and nineteen, and on and after July first, nine- 
 teen hundred and nineteen, IJi cents a pound or fraction 
 thereof. The publishers of such newspapers or periodicals 
 before being entitled to the foregoing rates shall furnish 
 to the Postmaster General, at such times and under such 
 conditions as he may prescribe, satisfactory evidence that 
 none of the net income of such organization inures to the 
 benefit of any private stockholder or individual. 
 
 Sec. 1104. That where the total weight of any one 
 edition or issue of any publication mailed to any one zone 
 does not exceed one pound, the rate of postage shall be 1 
 cent. 
 
 Sec. 1105. The zone rates provided by this title shall 
 relate to the entire bulk mailed to any one zone and not 
 to individually addressed packages. 
 
 Sec. 1106. That where a newspaper or periodical is 
 mailed by other than the publisher or his agent or a news 
 agent or dealer, the rate shall be the same as now pro- 
 vided by law. 
 
 Sec. 1107. That the Postmaster General, on or before 
 the tenth day of each month, shall pay into the general 
 fund of the Treasury an amount equal to the difference 
 between the estimated amount received during the pre- 
 ceding month for the transportation of first class matter 
 through the mails and the estimated amount which would 
 have been received under the provisions of the law in 
 force at the time of the passage of this Act. * 
 
 (110) 
 
Sec. 1108. That the salaries of postmasters at offices Salaries of 
 of the first, second, and third classes shall not be increased Pogtmasters 
 after July first, nineteen hundred and seventeen, during 
 the existence of the present war. The compensation of 
 postmasters at offices of the fourth class shall continue to 
 be computed on the basis of the present rates of postage. 
 
 Sec. 1109. That where postmasters at offices of the Allowances 
 third class have been since May first, nineteen hundred to Third 
 and seventeen, or hereafter are granted leave without pay Class Post 
 for military purposes, the Postmaster General may allow, Offices 
 in addition to the maximum amounts which may now be 
 allowed such offices for clerk hire, in accordance with law, 
 an amount not to exceed fifty per centum of the salary of 
 the postmaster. 
 
 Sec. 1110. That section five of the Act approved Ethyl 
 March third, nineteen hundred and seventeen, entitled Alcohol 
 "An Act making appropriations for the Post Office 
 Department for the year ending June thirtieth, nineteen 
 hundred and eighteen,^' shall not be construed to apply 
 to ethyl alcohol for governmental, scientific, medicinal, 
 mechanical, manufacturing, and industrial purposes, 
 and the Postmaster General shall prescribe suitable rules 
 and regulations to carry into effect this section in connec- 
 tion with the Act of which it is amendatory, nor shall said 
 section be held to prohibit the use of the mails by regularly 
 ordained ministers of religion; or by officers of regularly 
 established churches, for ordering wines for sacramental 
 uses, or by manufacturers and dealers for quoting and 
 billing such wines for such purposes only. 
 
 Title XII — Income Tax Amendments 
 
 Sec. 1200. That subdivision (a) of section two of such 
 Act of September eighth, nineteen hundred and sixteen, is 
 hereby amended to read as follows: 
 
 "(a) That, subject only to such exemptions and de- Net Income 
 ductions as are hereinafter allowed, the net income of a 
 taxable person shall include gains, profits, and income, de- 
 rived from salaries, wages, or compensation for personal 
 service of whatever kind and in whatever form paid, or 
 from professions, vocations, businesses, trade, commerce, 
 or sales, or dealings in property, whether real or personal, 
 
 [111] 
 
Interest on 
 
 C^vemment 
 
 Bonds 
 
 Interest 
 
 Taxes 
 
 growing out of the ownership or use of or interest in real 
 or personal property, also from interest, rent, dividends, 
 securities, or the transaction of any business carried on 
 for gain or profit, or gains or profits and income derived 
 from any source whatever. 
 
 Section four of such Act of September eighth, nineteen 
 hundred and sixteen, is hereby amended to read as fol- 
 lows: 
 
 *'Sec. 4. The following income shall be exempt from 
 the provisions of this title: 
 
 "The proceeds of life insurance policies paid to indi- 
 vidual beneficiaries upon the death of the insured; the 
 amount received by the insured, as a return of premium 
 or premiums paid by him under life insurance, endow- 
 ment, or annuity contracts, either during the term or at 
 the maturity of the term mentioned in the con'racl or 
 upon surrender of the contract; the value of property 
 acquired by gift, bequest, devise, or descent (but the in- 
 come from such propertjr shall be included as income): 
 interest upon the obligations of a State or any political 
 subdivision thereof or upon the obligations of the United 
 States (but, in the case of obligations of the United States 
 issued after September first, nineteen hundred and seven- 
 teen, only if and to the extent provided in the Act authoriz- 
 ing the issue thereof) or its possessions or securities issued 
 under the provisions of the Federal Farm Loan Act of 
 July 8event,eenth, nineteen hundred and sixteen; the 
 compensation of the present President of the United States 
 during the term for which he has been elected and the 
 judges of the supreme and inferior courts of the United 
 States now in office, and the compensation of all officers 
 and employees of a State, or any political subdivision 
 thereof, except when such compensation is paid by the 
 United States Government/' 
 
 Sec. 1201. (1) That paragraphs second and third of 
 subdivision (a) of section five of such Act of September 
 eighth, nineteen hundred and sixteen, are hereby amended 
 to read as follows: 
 
 "Second. All interest paid within the year on his in- 
 debtedness except on indebtedness incurred for the pur- 
 chase of obligations or securities the interest upon which 
 is exempt from taxation as income under this title; 
 
 "Third. Taxes paid within the year imposed by the au- 
 thority of the United States (except income and excess 
 profits taxes) or of its Territories, or possessions, or any 
 
 [112] 
 
foreign country, or by the authority of any State, county, 
 school district, or municipality, or other taxing subdivision 
 of any State, not including those assessed against local 
 benefits;" 
 
 (2) Section five of such Act of September eighth, 
 nineteen hundred and sixteen, is hereby amended by adding 
 at the end of pubdivision (a) a further paragraph numbered 
 nine, to read as follows: 
 
 *' Ninth. Contributions or gifts actually made within 
 the year to corporations or associations organized and op- 
 erated exclusively for religious, charitable, scientific, or 
 educational purposes, or to societies for the prevention of 
 cruelty to children or animals, no part of the net income 
 of which inures to the benefit of any private stockholder 
 or individual, to an amount not in excess of fifteen per 
 centum of the taxpayer's taxable net income as comput,ed 
 without the benefit of this paragraph. Such contribu- 
 tions or gifts shall be allowable as deductions only if veri- 
 fied under rules and regulations prescribed by the Com- 
 missioner of Internal Revenue, with the approval of the 
 Secretary of the Treasury." 
 
 Sec. 1202. That (1) paragraphs second and third of 
 subdivision (a) of section six of such Act of September 
 eighth, nineteen hundred and sixteen, are hereby amended 
 to read as follows: 
 
 "Second. The proportion of all interest paid within th« 
 year by such person on his indebtedness (except on indebt- 
 edness incurred for the purchase of obligations or securi- 
 ties the interest upon which is exempt from taxation as 
 income under this title) which the gross amount of his 
 income for the year derived from sources within the United 
 States bears to the gross amount of his income for the 
 year derived from all sources within and without the 
 United States, but this deduction shall be allowed only 
 if such person includes in the return required by section 
 eight all the information necessary for its calculation; 
 
 ** Third. Taxes paid within the year imposed by the 
 authority of the United States (except income and excess 
 profits taxes), or of its Territories, or possessions, or by the 
 authority of any State, county, school distri^ft. or munici- 
 pality, or other taxing subdivision of any State, paid 
 withm the United States, not including those assessed 
 against local benefits:" 
 
 [113] 
 
 Contribu- 
 tioRg and 
 Gifts 
 
 Nonnreeident 
 Aliens 
 
 Interest 
 
 Taxes 
 
Deductions 
 and Credits 
 of Non-Resi- 
 dent Aliens 
 Dependent 
 Upon Return 
 
 Specific 
 Exemptions 
 
 (2) Section six of such Act of'September eighth, nineteen 
 hundred and sixteen, is also further amended by adding a 
 a new subdivision to read as follows: 
 
 **(c) A nonresident alien individual shall receive the 
 benefit of the deductions and credits provided for in this 
 section only by filing or causing to be filed with the collector 
 of internal revenue a true and accurate return of his total 
 income, received from all sources, corporate or otherwise, in 
 the United States, in the manner prescribed by this title; 
 and in case of his failure to file such return the collector 
 shall collect the tax on such income^ and all property 
 belonging to such nonresident alien mdividual shall be 
 liable to distraint for the tax." 
 
 Sec. 1203. (1) That section seven of such Act of Sep- 
 tember eighth, nineteen hundred and sixteen, is hereby 
 amended to read as follows: 
 
 "Sec. 7. That for the purpose of the normal tax only, 
 there shall be allowed as an exemption in the nature of a 
 deduction from the amount of the net income of each 
 citizen or resident of the United States, ascertained as 
 provided herein, the sum of $3,000, plus $1,000 additional 
 if the person making the return be a head of a family or a 
 married man with a wife living with him, or plus the sum 
 of $1,000 additional if the person making the return be 
 a married woman with a husband living with her; but in 
 no event shall this additional exemption of $1,000 be 
 deducted by both a husband and a wife: Provided, That 
 only one deduction of $4,000 shall be made from the aggre- 
 gate income ot both husband and wife when living together: 
 Provided further, That if the person making the return is 
 the head of a family there shall be an additional exemption 
 of $200 for each child dependent upon such person, if 
 imder eighteen years of age, or if incapable ol self-support 
 because mentally or physically defective, but this provi- 
 sion shall operate only in the case of one parent in the same 
 family: Provided further, That guardians or trustees shall 
 be allowed to make this personal exemption as to income 
 derived from the property of which such guardian or trustee 
 has charge in favor of each ward or cestui que trust: 
 Provided further. That in no event shall a ward or cestui 
 que trust be allowed a greater personal exemption than as 
 provided in this section from the amount of net income 
 received from all sources. There shall also be allowed 
 an exemption from the amount of the net income of 
 
 [114] 
 
estates of deceased citizens or residents of the United States 
 during the period of administration or settlement, and of 
 trust or other estates of citizens or residents of the United 
 States the income of which is not distributed annually or 
 regularly under the provisions of subdivision (b)^ of 
 section two, the sum of $3,000, including such deductions 
 as are allowed under section five." 
 
 (2) Subdivision (b) of section seven of such Act of Sep- 
 tember eighth, nineteen hundred and sixteen, is hereby 
 repealed. 
 
 Sec. 1204. (1) That subdivisions Cc) and (e) of section 
 eight of such Act of September eighth, nineteen himdred 
 and sixteen, are hereby amended to read as follows: 
 
 ** (c) Guardians, trustees, executors, administrators, re- 
 ceivers, conservators, and all persons, corporations, or asso- Fiduciaries 
 ciations, acting in anj^ fiduciary capacity, shall make and 
 render a return of the income of the person, trust, or estate 
 for whom or which they act, and be subject to all the pro- 
 visions of this title which apply to individuals. Such 
 fiduciary shall make oath that he has sufficient knowledge 
 of the affairs of such person, trust, or estate to enable him 
 to make such return and that the same is, to the best of 
 his knowledge and belief, true and correct, and be subject 
 to all the provisions of this title which apply to individuals : 
 Provided, That a return made by one of two or more joint 
 fiduciaries filed in the district where such fiduciary resides, 
 under such regulations as the Secretary of the Treasury 
 may prescribe, shall be a sufficient compliance with the 
 requirements of this paragraph: Provided further, That 
 no return of income not exceeding $3,000 shall be re- 
 quired except as in this title otherwise provided. 
 
 "(e) Persons carrying on business in partnership shall 
 be liable for income tax only in their individual capacity, Partnerships 
 and the share of the profits of the partnership to which any 
 taxable partner would be entitled if the same were divided, 
 whether divided or otherwise, shall be returned for taxa- 
 tion and the tax paid under the provisions of this title: 
 Provided, Thsit from the net distributive interests on which 
 the individual members shall be liable for tax, normal and 
 additional, there shall be excluded their proportionate 
 shares received from interest on the obligations of a State 
 or any poHtical or taxing subdivision thereof, and upon 
 the obligations of the United States (if and to the extent 
 that it is provided in the Act authorizing the issue of such 
 
 115] 
 
obligations of the United States that they are exc^mpt 
 from taxation) and its possessions, and that for the pur- 
 pose of computing the normal tax there shall be al- 
 lowed a credit, as provided by section five, subdivision 
 (b), for their proportionate share of the profits derived 
 from dividends. Such partnership, when requested by 
 the Commissioner of Internal Revenue or any district 
 collector, shall render a correct return of the earnings, 
 profits, and income of the partnership, except income 
 exempt under section four of this Act, setting forth the 
 item of the gross income and the deductions and credits 
 allowed by this title, and the names and addresses of the 
 individuals who would be entitled to the net earnings, 
 
 Erofits, and income, if distributed. A partnership shall 
 ave the same privilege of fixing and making returns upon 
 the basis of its own fiscal year as is accorded to corporations 
 under this title. If a fiscal year ends during nineteen 
 hundred and sixteen or a subsequent calendar 3'ear for 
 which there is a rate of tax different from the rate for the 
 preceding calendar year, then (1) the rate for such pre- 
 ceding calendar year shall apply to an amount of each 
 partner's share of such partnership profits equal to the 
 proportion which the part of such fiscal year falling within 
 such calendar year bears to the full fiscal year, and (2) 
 the rate for the calendar year during which such fiscal 
 year ends shall apply io the remainder. 
 
 (2) Subdivision (d) of section eight of such Act of Sep- 
 tember eighth, nineteen hundred and sixteen, is hereby 
 repealed. 
 
 Sec. 1205. (1) That subdivisions (b), (c), (f), and (g) of 
 section nine of such Act of September eighth, nineteen 
 hundred and sixteen, are hereby amended to read as 
 follows: 
 Deduction at u^y^^^ ^U persons, corporations, fjartnerships, associa- 
 ^ource tions, and msurance companies, in whatever capacity 
 
 mn-Aesident acting, including lessees or mortgagors of real or personal 
 ''^^^^ property, trustees acting in any trust capacity, executors, 
 
 administrators, receivers, conservators, employers, and all 
 officers and employees of the United State**, having the con- 
 trol, receipt, custody, disposal, or payment of interest, rent, 
 salaries, wages, premmms, annuities, compensation, 
 remuneration, emoluments, or other fixed or determina- 
 ble annual or periodical gains, profits, and income of 
 any nonresident alien individual, other than income 
 
 1116] 
 
derived from dividends on capital stock, or from the 
 net earninj!:8 of a corporation, joint-fltock company or 
 association, or insurance company, which is taxable upon 
 its net income as provided in this title, are hereby author- 
 ized and required to deduct and withhold from such annual 
 or periodical gains, profits, and income such sum as will be 
 sufficient to pay the normal tax imjKDsed thereon by this 
 title, and shall make return thereof on or before March 
 first of each year and, on or before the time fixed by law 
 for the payment of the tax, shall pay the amount with- 
 held to the officer of the United States Government 
 authorized to receive the same; and they are each hereby 
 made personally liable for such tax, and they are each 
 hereby indemnified against every person, corporation, 
 partnership, association, or insurance company, or de- 
 mand whatsoever for all pa>Tnents which they shall make 
 in pursuance and by virtue of this title. 
 
 "(c) The amount of the normal tax hereinbefore im- 
 posed shall also be deducted and withheld from fixed or 
 determinable annual or periodical gains, profits, and in- 
 come derived from interest upon bonds and mortgages, 
 or deeds of trust or other similar obligations of corpora- 
 tions, joint-stock companies, associations, and insurance 
 companies (if such bonds, mortgages, or other obliga- 
 tions contain a contract or provision by which the obligor 
 agrees to pay any portion of the tax imposed by this title 
 upon the obligee or to reimburse the obligee for any por- 
 tion of the tax or to pay the interest without deduction 
 for any tax which the obligor may be required or permitted 
 to pay thereon or to retain therefrom under any law of the 
 United States), whether payable annually or at shorter 
 or longer periods and whether such interest is payable 
 to a nonresident alien individual or to an individual 
 citizen or resident of the United States, subject to the 
 provisions of the foregoing subdivision (b) of this section 
 requiring the tax to be withheld at the source and deducted 
 from annual income and returned and paid to the Govern- 
 ment, unless the person entitled to receive such interest 
 shall file with the withholding agent, on or before Feb- 
 ruary first, a signed notice in writing claiming the benefit 
 of an exemption under section seven of this title. 
 
 " ^f) All persons, corporations, partnerships, or associa- 
 tions, undertaking as a matter of business or for profit 
 the collection of foreign payments of interest or dividends 
 
 [117] 
 
 Tax Free 
 Bonds 
 
 Collectien of 
 
 Foreign 
 
 Items 
 
Tax Assessed 
 by Personal 
 Return 
 
 Corporation 
 Tax on 
 Net Income 
 
 by means of coupons, checks, or bills of exchange shall 
 obtain a license from the Commissioner of Internal 
 Revenue, and shall be subject to such regulations enabling 
 the Government to obtain the information required under 
 this title, as the Commissioner of Internal Revenue, with 
 the approval of the Secretary oi the Treasure', shall pre- 
 scribe; and whoever knowingly undertakes to "collect such 
 payments as aforesaid without having obtained a license 
 therefor, or without complying with such regulations, 
 shall be deemed guilty of a misdemeanor and for each 
 offense be fined in a sum not exceeding $5,000, or imprisoned 
 for a term not exceeding one year, or both, in the discre- 
 tion of the court. 
 
 *'(g) The tax herein imposed upon gains, profits, and 
 incomes not falling under the foregoing and not returned 
 and paid by virt.ue of the foregoing or as otherwise pro- 
 vided by law shall be assessed by personal return under 
 rules and regulations to be prescribed by the Commis- 
 sioner of Internal Revenue and approved by the Secretary 
 of the Treasury. The intent and purpose of this title is 
 that all gains, profits, and income of a taxable class, as 
 defined by this title, shall be charged and assessed with the 
 corresponding tax, normal and additional, prescribed 
 b}*^ this title, and said tax shall be paid by the owner of 
 such income, or the proper representative having the 
 receipt, custody, control, or disposal of the same. For the 
 purpose of this title ownership or liability shall be deter- 
 mined as of the year for which a return la required to be 
 rendered. 
 
 **The provisions of this section, except subdivision (c), 
 relating to the deduction and payment of the tax at the 
 source of income shall only apply to the normal tax herein- 
 before imposed upon non-resident alien individuals. '* 
 
 (2) Subdivisions (d) and (e) of section nine of such 
 Act of September eighth, nineteen hundred and sixteen, are 
 hereby repealed. 
 
 Sec. 1206. (1) That the first paragraph of section ten'of 
 such Act of September eighth, nineteen hundred and six- 
 teen, is hereby amended to read as follows: 
 
 *'Sec. 10. (a) That there shall be levied, assessed, col- 
 lected, and paid annually upon the total net income re- 
 ceived in the preceding calendar year from all sources by 
 every corporation, joint-stock company or association, or 
 insurance company, organized in the United States, no 
 
 [1181 
 
matter how created or organized, but not including part- 
 nerships, a tax of two per centum upon such income; and 
 a like tax shall be levied, assessed, collected, and paid 
 annually upon the total net income received in the pre- 
 ceding calendar year from all soiu-ces within the United 
 States by every corporation, joint-stock company or asso- 
 ciation, or insurance company, organized, authorized, or 
 existing under the laws of any foreign country, including 
 interest on bonds, notes, or other interest-bearing obliga- 
 tions of residents, corporate or otherwise, and including 
 the income derived from dividends on capital stock or 
 from net earnings of resident corporations, joint-stock com- 
 panies or associations, or insurance companies, whose net 
 income is taxable under this title. 
 
 (2) Section ten of such Act of September eighth, nine- 
 teen hundred and sixteen, is hereby further amended by 
 adding a new subdivision as follows : 
 
 "(b) In addition to the income tax imposed by sub- Undistribut- 
 division (a) ot this section there shall be levied, assessed, ed Surplus 
 collected, and paid annually an additional tax of ten per 
 centum upon the amount remaining undistributed six 
 months after the end of each calendar or fiscal year, 
 of the total net income of every corporation, joint-stock 
 company or association, or insurance company, received 
 during the year, as determined for the purposes of the tax 
 imposed by such subdivision (a), but not including the 
 amount of any income taxes paid by it within the year 
 imposed by the authority of the United States. 
 
 "The tax imposed by this subdivision shall not apply to 
 that portion of such undistributed net income which is 
 actually invested and employed in the business or is re- 
 tained for employment in the reasonable requirements of 
 the business or is invested in obligations of the United 
 States issued after September first, nineteen hundred and 
 seventeen: Provided^ That if the Secretary of the 
 Treasury ascertains and finds that any portion of such 
 amount so retained at any time for employment in the 
 business is not so employed or is not reasonably required 
 in the business a tax of fifteen per centum shall be levied, 
 assessed, collected, and paid thereon. 
 
 The foregoing tax rates shall apply to the undistributed 
 net income received bjr every taxable corporation, joints 
 stock company or association, or insurance company' in the 
 calendar year nineteen hundred and seventeen and in each 
 
 [119] 
 
year thereafter, except that if it has fixed its own fiscal 
 year under the provisions of existinj^ law, the foregoinp rates 
 shall apply to the proportion of the taxable undistributed 
 net income returned for the fiscal year ending prior to 
 December thirty-first, nineteen hundred and seventeen, 
 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." 
 
 Deductions, Sec. 1207. (1) That paragraphs third and fourth of 
 Domestic subdivision (&) of section twelve of such Act of September 
 
 Corporations eighth, nineteen hundred and sixteen, are hereby amended 
 
 to read as follows: 
 laterest "Third. The amount of interest paid within the year 
 
 on its indebtedness (except on indebtedness incurred for 
 the purchase of oVligations or securities the interest upon 
 which is exempt from taxation as income under this title) 
 to an amount of such indebtedness not in excess of the sura 
 of (a) the entire amount of the paid-up capital stock out- 
 standing at the close of the year, or, if no capital stock, the 
 entire amount of capital employed in the business at the 
 close of the year, and (b) one-half of its interest-bearing 
 indebtedness then outstanding: Provided^ That for the 
 purpose of this title preferred capital stock shall not be 
 considered interest-bearing indebtedness, and interest or 
 dividend* paid upon this stock shall not be deductible 
 from gross income: Promded fwrther, That in cases 
 wherein shares of capital stock are issued without par 
 or nominal value, the amount of paid-up capital stock, 
 within the meaning of this section, as represented by such 
 shares, will be the amount of cash, or its equivalent, paid 
 or transferred to the corporation as a consideration for 
 such shares: Provided further, That in the case of indebt- 
 edness wholly secured by property collateral, tangible or 
 intangible, the subject of sale or hypothecation in the ordin- 
 ary business of such corporation, joint-stock company' or 
 association as a dealer only in the property constituting 
 such collateral, or in loaning the funds thereby procured, 
 the total interest paid by such corporation, company, or 
 association within the year on any such indebtedness may 
 be deducted as a part of its expenses of doing busineas, 
 but interest on such indebtedness shall only be deductible 
 on an amount of such indebtedness not in excess of the 
 actual value of such property collateral : Provided further ^ 
 That in the oose of bonds or other indebtedness, which 
 
 1120] 
 
Taxes 
 
 Deductions, 
 
 Foreign 
 
 Corporations 
 
 have been iBsued with a guaranty that the interesf^ payhble 
 thereon shall be free from taxation, no deduction for the 
 payment of the tax herein imposed, or any othur tax paid 
 pursuant to such guaranty, shall be allowed; and in the 
 case of a bank, banking association, loan or trust company, 
 interest paid within the year on deposits or on moneys 
 received for investment and secured by interest-bearing 
 certificates of indebtedness issued by such bank, banking 
 association, loan or trust company shall be deducted; 
 
 ** Fourth. Taxes paid within the vear imposed by the 
 authority of the United States (except income and excess 
 profits taxes), or of its Territories, or possessions, or any 
 foreign country, or by the authority of any State, county, 
 school district, or municipality, or other taxing subdivision 
 of any State, not including those assessed against local 
 benefits." 
 
 (2) Paragraphs third and fourth of subdivision (b) of 
 section twelve of such Act of September eighth, nineteen 
 hundred and sixteen, are hereby amended to read as fol- 
 lows: 
 
 ''Third. The amount of interest paid within the year Interest 
 on its indebtedness (except on indebtedness incurred for 
 the purchase of obligations or securities the interest upon 
 which is exempt from taxation as income imder this title) 
 to an amount of such indebtedness not in excess of the pro- 
 portion of the sum of (a) the entire amount of the paid-up 
 capital stock outstanding at the close of the year, or, if no 
 capital stock, the entire amount of the capital employed 
 in the business at the close of the year, and (b) one-half of 
 its interest-bearing indebtedness then outstanding, which 
 the gross amount of its income for the year from business 
 transacted and capital invested within the United States 
 bears to the gross amount of its income derived from all 
 sources within and without the United States: Protnded, 
 That in the case of bonds or other indebtedness which 
 have been issued with a guaranty that the interest payable 
 thereon shall be free from taxation, no deduction for the 
 payment of the tax herein imposed or any other tax paid 
 pursuant to such guaranty shall be allowed; and in case 
 of a bank, banking association, loan or trust company, or 
 branch thereof, interest paid within the year on deposits 
 by or on moneys received for investment from either 
 citizens or residents of the United States and secured by 
 interest-bearing certificates of indebtedness issued by 
 
 [1211 
 
Taxes 
 
 Deduction 
 at Source 
 
 Penalty for 
 Failure to 
 File Returns 
 
 such bank, banking aflsociation, loan or trust company, or 
 branch thereof; 
 
 ** Fourth. Taxes paid within the year imposed by the au- 
 thority of the United States (except income and excess 
 profits taxes), or of its Territories, or possessions, or by the 
 authority of any State, county, school district, or munici- 
 pah'ty, or other taxing subdivision of any State, paid within 
 the United States, not including those assessed against 
 local benefits. " 
 
 Sec. 1208. (1) That subdivision (e) of section thirteen 
 of such Act of September eighth, nineteen hundred and 
 sixteen, is hereby amended to read as follows: 
 
 '' (e) All the provisions of this title relating to the tax 
 authorized and required to be deducted and withheld and 
 paid to the officer of the United States Government author- 
 ized to receive the same from the income of nonresident 
 alien individuals from sources within the United States 
 shall be made applicable to the tax imposed by subdivision 
 (a) of section ten upon incomes derived from mterest upon 
 bonds and mortgages or deeds of trust or similar obligations 
 of domestic or other resident con)oration8, joint-stock 
 companies or associations, and insurance companies by 
 nonresident alien firms, copartnerships, companies, cor- 
 porations, joint-stock companies or associations, and 
 insurance companies, not engaged in business or trade 
 within the United States and not having any oflfice or 
 place of business therein." 
 
 Sec. 1209. That section eighteen of such Act of Septem- 
 ber eighth, nineteen hundred and sixteen, is hereby 
 amended to read as follows: 
 
 *'Sec. 18. That any person, corporation, partnership, 
 association, or insurance company, liable to pay the tax, 
 make a return or to supply information required under this 
 title, who refuses or neglects to pay such tax, to make such 
 return or to supply such information at the time or times 
 herein specified in each year, shall be liable, except as 
 otherwise specially provided in this title, to a penalty of 
 not less than $20 nor more than $1,000. Any individual or 
 any officer of any cor{X)ratioD, partnership, association, 
 or insurance company, required by law to make, render, 
 sign, or verify any return or to suppl}^ any information, 
 who makes any false or fraudulent return or statenient 
 with intent to' defeat or evade the assessment required 
 
 [122] 
 
by this title to be made, shall be gmlty of a misdemeanor, 
 and shall be fined not exceeding $2 000 or be imprisoned not 
 exceeding one year, or both, in the discretion of the court, 
 with the costs of prosecution: Provided, That where any 
 tax heretofore due and payable has been duly paid by the 
 taxpayer, it shall not be re-collected from any withholding 
 agent required to retain it at its source, nor shall any 
 penalty be imposed or collected in such C£ises from the 
 taxpayer, or such withholding agent whose duty it was to 
 retain it, for failure to return or pay the same, unless such 
 failure was fraudulent and for the purpose of evading 
 payment. " 
 
 Sec. 1210. That section twenty-six of such Act of Sep- 
 tember eighth, nineteen hundred and sixteen, as amended 
 by the Act entitled *'An Act to provide increased revenue 
 to detray the expenses of the increased appropriations 
 for the Army and Navy and the extensions of fortifications, 
 and for other purposes," approved March third, nineteen 
 hundred and seventeen, is hereby amended to read as 
 follows: 
 
 *'Sec. 26. Every corporation, joint-stock company or 
 association, or insurance company subject to the tax 
 herein imposed, when required by the Commissioner of 
 Internal Revenue, shall render a correct return, duly 
 verified under oath, of its payments ot dividends, whether 
 made in cash or its equivalent or in stock, including the 
 names and addresses of stockholders and the number of 
 shares owned by each, and the tax years and the applicable 
 amounts in which such dividends were earned, in such 
 form and manner as maybe prescribed by the Commissioner 
 of Internal Revenue, with the approval of the Secretary 
 of the Treasury." 
 
 Sec. 1211. That Title I of such Act of September eighth, 
 nineteen hundred and sixteen, is hereby amended by add- 
 ing to Part III six new sections, as follows : 
 
 "Sec. 27. That every person, corporation, partnership, 
 or association, doing business as a broker on any exchange or 
 board of trade or other similar place of business shall, 
 when required by the Commissioner of Internal Revenue, 
 render a correct return duly verified under oath, under 
 such rules and regulations as the Commissioner of Internal 
 Revenue, with the approval of the Secretary of the Treas- 
 ury, may prescribe, showing the names of customers for 
 whom such person, corporation, partnership, or association 
 
 123] 
 
 Return of 
 Payments of 
 Dividends 
 
 Information 
 at Source 
 
 Returns 
 of Brokers 
 
Returns of 
 Payors of 
 Miscella* 
 Deous Income 
 
 Returns of 
 Debtor Cor- 
 porations on 
 Payments of 
 Interest on 
 Bonds 
 
 Disclosure of 
 Ownership 
 of Income 
 
 has transacted any business, with such details as to the 
 profits, losses, or other information which the compiis- 
 sioner may require, as to each of such customers, as will 
 enable the Commissioner of Internal Revenue to deter- 
 mine whether ail income tax due on profits or gains of such 
 customers has been paid. 
 
 *'Sec. 28. That all persons, corporations, partnerships, 
 associations, and insurance companies, in whatever capacity 
 acting, including lessees or mortgagors of real or personal 
 property, trustees acting in any trust capacity, executors, 
 administrators, receivers, conservators, and employers, 
 making payment to another person, corporation, part- 
 nership, association, or insurance company, of interest, 
 rent, salaries, wages, premiums, annuities, compensation, 
 remuneration, emoluments, or other fixed or determinable 
 gains, profits, and income (other than payments described 
 m sections twenty-six and twenty-seven), of $800 or more 
 in any taxable year, or, in the case of such payments made 
 by the United States, the officers or employees of the 
 United States having information as to such payments 
 and required to make returns in regard thereto by the 
 regulations hereinafter provided for, are hereby author- 
 ized and required to render a true and accurate return to 
 the Commissioner of Internal Revenue, under such rules 
 and regulations and in such form and manner as may be 
 prescribed by him, with the approval of the Secretary of 
 the Treasury, setting forth the amount of such gains, 
 profits, and income, and the name and address of the 
 recipient of such payment: Provided^ That such returns 
 shall be required, regardless of amounts, in the case of 
 payments of interest upon bonds and mortgages or deeds 
 of trust or other similar obligations or corporations, joint- 
 stock companies, associations, and insurance companies, 
 and in the case of collections of items (not payable in the 
 United States) of interest upon the bonds of foreign 
 countries and interest from the bonds and dividends from 
 the stock of foreign corporations by persons, corpora- 
 tions, partnerships, or associations, undertaking as a 
 matter of business or for profit the collection of foreign 
 payments of such interest or dividends by means of coupons, 
 checks, or bills of exchange. 
 
 ^'When necessary to make effective the provisions of 
 this section the name and address of the recipient of in- 
 come shall be furnished upon demand of the person, cor- 
 
 1124 J 
 
poration, partnership, association, or insurance company 
 paying the income. 
 
 "The provisions of this section shall apply to the cal- 
 endar year nineteen hundred and seventeen and each 
 calendar year thereafter, but shall not apply to the pay- 
 ment of interest on obligations of the United States. 
 
 "Sec. 29. That in assessing ineome tax the net income 
 embraced in the return shall also be credited with the 
 amount of any excess profits tax imposed by Act of Con- 
 gress and assessed for the same calendar or fiscal year upon 
 the taxpayer and, in the case of a member of a partnership, 
 with his proportionate share of such excess profits tax im- 
 posed upon the partnership. 
 
 "Sec. 30. That nothing in section II of the Act ap- 
 proved October third, nineteen hundred and thirteen, en- 
 titled 'An Act to reduce tariff duties and to provide revenue 
 for the Government, and for other purposes,' or in this 
 title, shall be construed as taxing the income of foreign 
 governments received from investments in the United 
 States in stocks, bonds, or other domestic securities, 
 owned by su(5h foreign governments, or from interest on 
 deposits m banks in the United States of moneys belonging 
 to foreign governments. 
 
 "Sec. 31. (a) That the term 'dividends* as used 
 in this title shall be held to mean any distribution made or 
 ordered to be made by a corporation, joint-stock com- 
 pany, association, or insurance company, out of its earn- 
 ings or profits accrued since March first, nineteen hundred 
 and thirteen, and payable to its shareholders, whether in 
 cash or in stock of the corporation, joint-stock company, 
 association, or irsurance company, which stock dividend 
 shall be considered income, to the amount of the earnings 
 or profits so distributed. 
 
 (b) Any distribution made to the shareholders or mem- 
 bers of a corporation, joint-stock company, or association, 
 or insurance company, in the year nineteen hundred and 
 seventeen, or subsequent tax years, shall be deeme«l to 
 have been made from the most recently accumulated 
 undivided profits or surplus, and shall constitute a part 
 of the annual income of the distributee for the year in 
 which received, and shall be taxed to the distributee at 
 the rates prescribed by law for the years in which such 
 profits or surplus were accumulated by the corporation, 
 joint-stock company, association, or insurance company, 
 
 [125 1 
 
 Applicable 
 to Year 1917 
 
 Excess 
 Profits 
 Tax Credited 
 
 Income 
 Foreign 
 Governments 
 Exempt 
 
 Dividends 
 
 Rates 
 
 Applicable to 
 Dividends 
 
but nothing herein shall be construed as taxing any 
 earnings or profits accrued prior to March first, nineteen 
 hundred and thirteen, but such earnings or profits may be 
 distributed in stock dividends or otherwise, exempt from 
 the tax, after the distribution of earnings and profits 
 accrued since March first, nineteen hundred and thirteen, 
 has been made. This subdivision shall not apply to any 
 distribution made prior to August sixth, nineteen hundred 
 and seventeen, out of earnings or profits accrued prior to 
 March first, nineteen hundred and thirteen. 
 
 Sec. 32. That premiums paid on life insurance 
 policies covering the lives of officers, employees, or those 
 financially interested in any trade or business conducted 
 by an individual, partnership, corporation, joint-stock 
 company or association, or insurance company, shall not 
 be deducted in computing the net income of such individ- 
 ual, corporation, joint-stock company or association, or 
 insurance company, or in computing the profits of such 
 partnership for the purposes of subdivision (e) of section 
 nine. 
 
 Sec. 1212. That any amount heretofore withheld by 
 any withholding agent as required by Title I of such Act 
 of September eighth, nineteen hundred and sixteen, on 
 account of the tax imposed upon the income of any indi- 
 vidual, a citizen or resident of the United States, for the 
 calendar year nineteen hundred and seventeen, except in 
 the cases covered by subdivision (o) of section nine of 
 such Act, as amended by this Act, shall be released and 
 paid over to such individual, and the entire tax upon 
 the income of such individual for such vear shall be assessed 
 and collected in the manner prescribed by such Act as 
 amended by this Act. 
 
 Title XIII — General Provisions 
 
 Sec. 1300. That if any clause, sentence, paragraph, or 
 part of this Act shall for any reason be adjudged by any 
 court of competent jurisdiction to be invalid, such judg- 
 ment shall not affect, impair, or invalidate the remainder 
 of said Act, but shall be confined in its operation to the 
 clause, sentence, paragraph, or part thereof directly in- 
 volved in the controversy in which such judgment shall 
 have been rendered. 
 
 [1261 
 
Sec. 1301. That Title I of the Act entitled, "An Act 
 to provide increased revenue to defray the expenses of the 
 increased appropriations for the Army and Navy and the 
 extension of fortifications, and for other purposes,'^ 
 approved March third, nineteen hundred and seventeen, 
 be, and the same is hereby, repealed. 
 
 Sec. 1302. That unless otherwise herein specially Effective 
 provided, this Act shall take effect on the day following Date of Act 
 its passage. 
 
 1127] 
 
Index to Synopsis 
 
 Admissions to Amusements 
 Adults. 56 
 Boxes and Seats, 56 
 Cabarets, 56 
 Children, 56 
 Exempt, 56 
 Payment, 56 
 Returns, 56 
 Seats, 56 
 Tables, 56 
 Administrative and General 
 Provisions 
 Contracts before May 9, 1917, 
 
 62 
 Collection and Payment 
 Additional taxes, 60 
 Advance payments, 62 
 Interest on advance pay- 
 ments, 63 
 Method not specifically 
 
 provided, 61 
 Effective Date of Law, 63 
 Stamps on hand. 61 
 Uncertified checks, 63 
 Penalties, 61 
 Provisions separable, 63 
 Records to be kept, 60 
 Regulations and Rulings, 62 
 Returns to be made, 60 
 West Indian Islands, 60 
 Agreements, 47 
 Automobiles, 53 
 Berths, 37 
 Beverages 
 
 (Arranged alphabetically) , 
 38 
 Boats, 52 
 Bonds, 47. 48 
 Cameras, 53 
 Capital Stock, 48 
 
 Certificates of Indbbtbdness 
 
 47 
 Checks, 48 
 Chewing Gum, 53 
 Cigars 
 
 Rates of Tax, 44 
 
 Retail Defined, 44 
 
 When effective, 44 
 Cigarettes 
 
 Packages, 45 
 
 Rates of Tax, 46 
 
 When effective, 45 
 Conveyances, 48 
 Deeds, 49 
 Drafts, 49 
 Dubs, 59 
 Entries, 49 
 
 Estates 
 Rates, 51 
 Exemptions, 51 
 
 Excess Profits 
 
 Claim in Abatement, 24 
 Corporation, defined, 19 
 Deductions (See Determina- 
 tion of Excess Profits) 
 Definitions. 19 
 
 Determination of Excess Prof- 
 its 
 Business continuation of 
 
 former business, 23 
 Concerns in buslnass dur- 
 ing pre-war period, 21 
 Concerns not In business 
 during pre-war period. 
 22 
 Concerns having no income 
 or subnormal Income dur- 
 ing pre-war period. 24 
 
 [129] 
 
Ooncems in which invested 
 capital cannot be de- 
 termined, 25 
 Determination of percent- 
 age by Commissioner of 
 Internal Revenue, 24, 26 
 Inability to determine pre- 
 war income, 22 
 Limitation on deductions. 
 22 
 Domestic, defined, 19 
 Exemptions 
 
 Corporations, 21 
 Partnerships, 21 
 Individuals, 21 
 Non-resident aliens, 20 
 Trades and Businesses, 20 
 First Taxable year, defined, 19 
 Fiscal year, 34 
 Foreign, defined, 19 
 Invested Capital 
 Assets, excluded, 28 
 Average, monthly, 28 
 Change of Ownership, 29 
 Consolidation, 29 
 Copyrights, 27 
 Corporations 
 Domestic, 26 
 Foreign, 28 
 Franchises, 27 
 Good Will, 27 
 Individuals 
 
 Citizens or residents of 
 U. S., 28 
 Non-resident aliens, 28 
 Intangible Assets, 27 
 Patents, 27 
 Trademarks, 27 
 Law repealed, former excess 
 
 profits tax, 34 
 Net Income 
 
 Corporations, 30 
 Defined, 20 
 Individuals, 31 
 Partnerships, 31 
 
 No capital invested in busi- 
 ness, 30 
 
 Nominal capital invested in 
 business, 30 
 
 Patents, 27 
 
 Persons subject to tax, 20 
 
 Pre-war period, defined. 19 
 
 Rates of Tax, 29 
 
 Regulations, 35 
 
 Reorganization, 29 
 
 Returns 
 
 Partnerships, 33 
 
 Taxable Year, defined, 19 
 
 Trademarks, 27 
 
 United States, defined, 19 
 Express, 36 
 
 Facilities Furnished by Pub- 
 lic Utilities 
 
 Berths, 37 
 
 By whom paid, 36 
 
 Cash Fares, 36 
 
 Express, 36 
 
 Freight, 36 
 
 Passenger Fares, 37 
 
 Pipe Lines, 37 
 
 Radio Messages, 37 
 
 Seats. 37 
 
 Telegraph Messages, 37 
 
 Telephone Messages, 37 
 
 Tickets Purchased Prior to 
 November 1, 1917, 37 
 
 Films, 53 
 Freight, 36 
 Games, 54 
 Graphophones, 54 
 Income Tax, Amendments 
 Collection of foreign Items, 18 
 Deductions, corporations 
 Interest, 15 
 Taxes, 15 
 Deductions, individual 
 Contributions, 12 
 Excess Profits Tax, 14 
 
 [130] 
 
Interest, 11 
 
 Non-resident aliens, 12 
 
 Taxes, 11 
 Deduction at source 
 
 Citizens and residents of 
 U. S., 13 
 
 Dividends, 13 
 
 Foreign corporations and 
 firms, 13 
 
 Non-resident aliens, 13 
 
 Refund of tax deducted in 
 1917, 14 
 
 Tax free bonds, 13 
 Dividends, corporations, 15 
 Dividends, individuals, 11 
 Disclosure of ownership, 17 
 Excess profits tax deductible, 
 
 14 
 Exemptions, specific 
 
 Citizens and residents of 
 U. S., 12 
 
 Non-resident aliens, 12 
 Foreign Governments, in- 
 come, 4 
 Information at source, 16 
 Interest, Government bonds, 
 
 13, 15 
 Life Insurance premiums, 18 
 Partnerships 
 
 Fiscal year, 12 
 
 Interest on Government 
 bonds, 13 
 
 Returns, 12 
 Penalties, 17 
 Returns 
 
 Brokers, 16 
 
 Debtor Corporations, 17 
 
 Miscellaneous Income, 16 
 
 Partnerships, 12 
 
 Payments of Dividends by 
 Corporations, 15 
 Surplus, undistributed 
 Tax on, 14 
 
 Income Tax, War 
 
 Chart of Rates and Taxes, 
 Collection, 9, 10 
 Corporations 
 Collection, 10 
 Dividends, 10 
 Fiscal year, 10 
 Rate of tax, 9 
 Deduction at Source, 9 
 Effective date of Law, 10 
 Exemptions, Specific, 9 
 Fiscal Year, 10 
 Normal Tax 
 Individuals, 7 
 Non-resident aliens, not 
 
 subject, 7 
 Rate, 7 
 Returns, 9 
 Surtax 
 Rates, 7 
 Insurance 
 Casualty, 55 
 Exempt, 55 
 Fire, 55 
 Inland, 55 
 Life. 55 
 Marine, 55 
 Payment of Tax, 55 
 Returns, 55 
 Jewelry, 53 
 Parcel Post, 49 
 Passage Ticket, 49 
 Passenger Fares, 37 
 Pipe Lines, 37 
 Plating Cards, 49 
 Power of Attornet, 49 
 Produce, 50 
 Promissory Notes, 49 
 Proxies, 50 
 Radio Messages, 37 
 
 [131] 
 
Manufactures 
 
 Articles not taxed, 53 
 
 Automobiles, 53 
 
 Boats, 62 
 
 Cameras, 53 
 
 Chewing Gum, 53 
 
 Films, 53 
 
 Games, 54 
 
 Graphophones, 54 
 
 Jewelry, 53 
 
 Patent medicines, 54 
 
 Payment of. 52 53 
 
 Piano players, 54 
 
 Records, 54 
 
 Returns of, 53 
 
 Sporting goods, 54 
 
 Yachts, 52 
 Munitions 
 
 Expiration of Law, 59 
 
 Rate reduced, 59 
 Patent Medicines, 54 
 Piano Pi^tebs, 54 
 
 Postal Rates 
 
 First class, 57 
 
 Second class 
 
 Advertising matter, 57 
 Other than advertising 
 matter, 58 
 Records, 54 
 Stamp Taxes 
 
 (Arranged alphabetically), 47 
 Snuff 
 
 Packages, 46 
 
 Rates of tax. 46 
 
 When effective. 46 
 Sporting Goods. 54 
 Telegraph Messages, 37 
 Telephone Messages. 37 
 Tobacco 
 
 Packages, 46 
 
 Rate of Tax, 46 
 
 When effective, 46 
 Yachi:'S, 62 
 
 1132] 
 
Guaranty Trust Company of New York 
 Functions and Facilities 
 
Guaranty Trust Company 
 of New York 
 
 Invites accounts of banks and bankers, 
 firms, corporations and individuals 
 
 Functions and Facilities 
 
 Genmral 
 Banking 
 Department 
 
 Foreign 
 Department 
 
 Bond 
 Department 
 
 Truat 
 Department 
 
 Transacts the general business of the bank; 
 extends credit; pays interest on daily bal- 
 ances, and on certificates of deposit. 
 
 A fully equipped banking institution. 
 Handles direct all kinds of foreign banking 
 transactions with the leading banks in all 
 parts of the world. Accepts time drafts 
 for the purpose of financing shipments to 
 or from the United States. Issues letters of 
 credit and travelers' checks. 
 
 Investigates, examines, and underwrites 
 bond issues; gives advice to customers in 
 regard to their investments; buys and sells 
 securities. 
 
 Acts as trustee under corporate mortgages. 
 Acts as executor, administrator, administra- 
 tor with the will annexed, testamentary 
 trustee, guardian of estates of infants, com- 
 mittee of property of incompetents, trustee 
 under voluntary trusts. 
 
Transfer, 
 Registration, 
 Coupon, and^ 
 Reorganization 
 Departments 
 
 Income Tax 
 Department 
 
 Foreign 
 Offices 
 
 Acts as depositary and agent of voting trus- 
 tees; holds securities or cash under escrow 
 agreements. 
 
 Acts as custodian of securities and financial 
 agent for individuals and corporations. 
 
 Acts as transfer, fiscal, and disbursing agent; 
 registrar, co-registrar, and depositary for 
 corporations organizing, reorganizing, or 
 established. 
 
 Assists customers and others in solving 
 questions concerning the requirements of 
 the Federal Income Tax Law, and in com- 
 piling annual returns. 
 
 This Company maintains fully equipped 
 oflSces in London and Paris. It has resi- 
 dent representatives in Petrograd and 
 Buenos Aires and travelers in many coun- 
 tries abroad, affording to importers and ex- 
 porters complete facilities for extending 
 their international trade. 
 
 Pull details of the facilities offered by any or all of the 
 departments will be sent on request. 
 
366496 
 
 Or 73 
 
 UNIVERSITY OF CALIFORNIA LIBRARY