The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-01-03
new CORPORATION Law
Must Now File Their Reports With
Revenue Collector.

| Following the operation of the new
federal corporation law which became
effective, January 1, the Kansas cor
porations will have two months in
which to file ti-eir reports with James
! Simpson, United States internal reve-
nue. collector for this district.
The law was passed by the last con-
gress and as the blank forms on which
reports are to be made had to be got
ten out prior to the new year, the
clerks in the revenue Office were kept
busy during the last days of the old
year. These reports must all be in
the hands of the district internal reve-
nue. collector not later than March l.
Taken collectively, the greater num-
Der of Kansas corporations are located
in Kansas City. Topeka and Wichita.
There are five different classes of cor
porations provided for under the new
federal law, irrespective of miscel-
laneous concerns, which do not come
under any Of the other heads. and as
blank, the task of first classifying
them has been a big one.
Every corporation must give figures
on these blanks by which it's net in
come can be told. From the net in
come $1,000 is deducted. and on the
balance the corporation must pay a
tax of l per cent to the government.
Corporations are classified as trans
portation, which includes all public
utility corporations; banks and finan-
turing and Insurance. Those that do
not come under one of these heads are
classed as miscellaneous. The reports
must be for the year ending Decem-
Der 81. The blanks of the various
classes are similar, but differ as to de-
tail. Mercantile corporations for in
stance must give the amount of paid up
stock outst andlng at the close of the
year, the amount of bonded or other
Indebtedness outstanding, and the
- actv For>
figuring gross income are as follows:
''The gross amount of income re-
ceived during the year from all sources
shall in the case of a mercantile cor
poration consist of the total amount
ascertained through inventory, or its
equivalent, which shows the difference
between the price received for goods
sold, and the cost of goods purchased
during the year, with the addition of
charge to the account of the sum of
and a credit to the account of the
sum of the inventory at the end of
the year. To this amount should be
added all items of income received dur
ing the year from other sources, in
Guiding dividends received on stock of
other corporations, joint stock COM
panies and associations subject to tax.
In determining this amount no account
shall be taken of allowances for depre-
citation or losses, which items shall be
heading as a deduction"
From this Is to be deducted the
necessary expenses of maintenance and
operation of the business, the losses
and depreciation sustained in the year.
the interest on Indebtedness, taxes paid
and dividends received from other cor
porations. The remainder after these
deductions are made is the net income,
and on that the tax is computed, after
further deduction of $1,000 has been
made.
Thus all corporations have to make
the report. but those whose net in
come fall under $1,000 a year do not
have to paw any tax. The lists of cor
porations are procured from the secre-
tary of state. Penalties are provided
for failure to make the report, also for
making false returns.
Some of the big corporations in the
east are preparing to oppose the law.
and it is probable test case will be
brought in the federal courts at an
early date to test its conStitutiona1ity.
One of the objections to the law is
that it requires publicity from all cor
porations. The reports are filed with
the local internal revenue officer in
each district, but are not made pub
lie by him. They are forwarded by
him to the internal revenue office at
Washington, and there they are open
to public INSPECTION.