The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1913-10-25
EXPLAINS POINTS
OF INCOME TAX Law

Deputy Revenue Collector Laney, of
Reno, has received from Joseph j.
Scott, collector Of internal revenue, a
statement relative to those features
of the new Federal income tax law
that will become effective November
l, 1913. The statement follows:
"Owing to the fact that certain
| features of the new Federal income
tax law providing for the collection of
the tax at the source will become ef-
fective November l, it has been deem
ed advisable to explain to the public
just how those features will become
operative.
"The first thing that should be dis
tinctly understood is this: That the
law requires that all persons, corpora
tions, firms or companies, etc, having
control of the payment of any fixed or
determinable amount annually to an
other person, exceeding $3,t 20 for any
taxable year, shall deduct and with
hold from such payment an amount
sufficient to pay the normal income tax
as computed on tn eannual gain of
the persons affected. Such is the gen
eral provision of the law. The normal
income tax, of course, is the tax of
per cent ON all incomes exceeding the
exemption of $4,000 a year. Attention
is called to the fact that the law re-
quires that this tax shall be withheld
from the payment mace TO the person
tied to receive the annual gain /;
also to that section of the law which
provides that those persons, corpora
tions, etc, charged with the duty of
withholding this normal tax upon the
payments referred to will, on and af-
ter November l, be under the new
statute and should they fail to with
hold the tax they will be liable to the
government for the amount. While
the law also imposes the necessity of a
direct payment of this tax from the
source to the collector of internal
revenue, this need not be done until
after the close of the current calendar
year. AS to making the return of this
tax so withheld, further instructions
will be issued in due time and forms
will be provided by this Office
"Under the head of annual gains
subject to the tax TO be withheld
come,in general interest, rent, salar-
les, wages, premiums, annuities or any
other compensation, remuneration,
emolument or other fixed or determin
able annual profit or income of anoth-
er person. II should be understood,
however, that no tax need be with
held from the payment of dividends on
the capital stock, or from the net earn
ings of corporations and joint stock
companies or associations themselves
required to make returns of net income
to the collector of internal revenue.
The exception in this case is to avoid
double taxation. OF course, the ex-
emption Of $4,000 for the taxable years
also applies in this general provision
"Attention should be called, how
ever, to the fact that landlords are
required to make their own returns
and that tenants are exempt from the
provisions of the foregoing require
ments except when in the case of in.
dividuals, trustees and other non cor
poration owners, the terms of the
lease require the tenant to pay state
and municipal taxes, assessments
against the property and other costs
OF maintenance, repairs and insurance
In which ease the tenant is required tc
deduct the normal tax out of the gross
|, rental. There is also the exception re
lieving the tenant of this liability in
the event the owner is a corporation
the corporation itself being required
to make the return.
"And IN this connection there should
!; be a clear understanding of still an
other provision of the law to the ef
feet that the normal income tax shall
ha 1o1,,ataI nd xr;< Al.
source from interest on bonds. mort
cages, deeds of trust or other similar
obligations of corporations REGARDLESS.
of the amount of such interest paid
} even though it fall below $4,000 yea
! and whether it be payable annually
or at shorter or longer periods. Thi.
latter provision covers also income a.
, represented by interest on bonds Of
} foreign eontries, ON foreign invest
ments enjoyed by residents of tn,
United States.
"In order that the government may
obtain control over these incomes from
, foreign sources, it win be necessary
for any person, firm or corporation
including bank or banker, undertaking
the collection of such foreign income
to obtain a license to be issued by tn,
3 commissioner of internal revenue. Tn.
: application for this license should b,
!. made to the collector of internal reve
: nue., This application will have to b,
accompanied by registration of tn,
: same, address and nature of business
a of the applicant. In view of the fact
however, that it will require a httl
time to prepare form of license an,
full regulations, the application itself
accompanied by registration as jus
outlined, win be for the present con
sidered sufficient compliance with tn