The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1911-12-27
TIE INCOME TAX

COMPTROLLER GENERAL MAKES
IMPORTANT RULING.
No Deductions to Sc Made in Certain
Instance-The Conptrouer's Rul-
ing in Detail.
no deduction can be made on ac-
count of payments to pastors salary
or charity or on account OF bad
debts or accounts lost" is the ruling
contained in an opinion given by
Comptroller General Jones Tuesday
on the income tax question. IN the
letter the comptroller general enum-
crates the various items that may be
deducted from taxpayers annual
income.
The letter is written to T. NJ. Nc
Michael, auditor of Orangeburg
County, and is as follows:
Answering your letter Of Decem-
Der s, in which you enclose the in
come tax return for 1911 and request
that pass upon the exemptions
claimed therein, I beg to say that
this is your duty as county auditor.
You are TO apply to each case as it
comes up, the principles laid down
in the instructions already issued
from this Office, and think you could
readily solve the matter by referring
to my letter to you of March 9. 1909,
together with the recent circular sent
you. However, I have looked over
the return sent me, from which it
appears that the taxpayers proposed
paying upon their net income, instead
OF the gross income required by law.
This, of course, is wrong. For in
stance: They state they received
s5,01S.75 rents from city property
| which they rent out; from this t. ey
deduct as non-taxable s1,407.66 for
taxes paid, s374 for insurance upon
property, and s1,04S.92 interest upon
debts that they owe, and s501.Ss for
expenses Of repairs, collecting rents
etc.
''The items Of insurance and in.
terest are clearly not to be deducted
as expenses Of carrying on business
This is small fixed charge upon the
capital owned by the taxpayer.
''The s501.SS for repairs and col
lections should be looked into and Sc
much as was paid out as commits
sions for renting the property ant
collecting the rents is to be deducted
from the gross rents as a part Of the
necessary expenses in their produc
ton. But nothing should be deduct
ed on account of repairs and i'm
provements to the property.
"I doubt whether the taxes which
are deducted in this return are thu
taxes only upon the real estate
Iappears that these taxes are the take!
upon all of the taxpayers property
and DO not pertain to these rent
| alone.
Gas to the estimated expenses o
the taxpayers warehouse business, o
course the actual expenses Of suci
business are to be deducted from ths
gross income made in such business
But no deduction car be made on &C
count Of payments to pastors salar.
or charity or on account of bad debt!
or accounts lost. These are in NJ
sense a part of the expenses of pro
ducing the income from the business
''you should also look into what i:
the actual income from this ware
house business. The taxpayers STATE
it is 5 per cent. profit on S100,00(
estimated sales. This is very unsatis
factory They should be required te
submit their books to you and show
what their actual gross sales are
and the gross profits thereon.
t'It is rather remarkable that the
gross income should De exactly pei
cent. on gross sales. You should as
certain the exact amount Of gross
sales, deduct the exact cost Of the
goods sold, which Will give you the
gross profit or income; from that de.
duct the actual necessary expenses ot
the business producing this ince ne
in accordance with the instructions
given you.
81 notice in the expenses proposed
tc be deducted from the income from
rents and warehouse are s735 fol
farm expenses. These are clearly nc
part Of the expenses of producing
rents or warehouse income. While
the taxpayer charges s735 on farm
expenses he returns no gross income
whatever from the farm, hence the
farm expenses are not to be consid.
cred at all as an exemption except in
connection with the income from that
farm which the taxpayers failed tc
return. Ascertain what was the gross
income from the farm, and if it was
more than the expenses, add tire gross
income after deduct!ng the farm ex-
penses to the taxpayers taxable in.
come"
]
WOMAN FIRES AT GROUP.