Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1913-11-20

fore. The income tax repeals the ex
else tax on corporations, but 70
January and February Of this year
special excise tax is re-enacted pro
Vid1ng that the net income shall be as
scertalned in the same manner as pro
vided for the remaining 10 months o
he year. and subsequent years. On,
return may be made for both tn,
excise (old) tax and the income ia,
for the year 1913, and only one assess.
ment of taxes will be made.
Q. Given a corporation with
bonded debt Of $1,000 0 bearing in.
terest of 5 per cent, 500, 900 Of stocl
outstanding upon which it pays foul
per cent and with 500 0 floating deb
on which 1t pays seven per cent, wha'
deductions for interest should be
made from the gross income?
a. A corporation may deduct In
terest on indebtedness not exceeding
and its paid up capital stock out
standing at the end of the taxable
year. The sum Of its Indebtedness
and stock being $4,000, 1t may de-
duct the interest payments on $105,
900.
q. One OF L employees works on
commission, deductsng his commits
MS money Is ever in our hands. How
then. are we to withhold the tax?
A.. You are obliged to make no de-
auction of the tax whatsoever as to
MIN. He must make return OF his own
Income. but If he received salary COM
p~ensation from you. that Is. a fixed
n certain amount, ycu will be
obliged to deduct the tax on all in ex-
cess Of $4,000 paid him during the
year unless he files certificates Of ex-
emption with you.
Q. We understand that the law re-
quires corporations from the first day
OF November, 1913, to withhold the tax
on behalf of persons for whom it re-
ceives an income in excess Of So, 1000
per annum, that all incomes are tax
able counting from the first day of
March, 1918. Will the corporation
from the first day of November, 1913.
be compelled to withhold the tax on
entire 10 months income. or will
that apply only to the income "at the
OF h year from November LIST to De-
cember 81, 1913?
"A. You arc required to withhold the
tax not on the entire 10 months in
come, but only on the income from
October 81 to December 81, 1913.
9. We collect a good deal Of In
terest on mortgage loans, which loans
are. some Of them. negotiated through
this bank, n some elsewhere, but
the coupons sent US for collection. We
would like to be Instructed in our
duties \ making said collections as
far as the income tax is concerned.
A. First-As to mortgage bonds, or
notes. not the obligations of corpora
tons, joint stock companies, or as
soctattons. and insurance companies,
the interest and principal of which
are payable at you bank, you are the
source: when you disbursements Of
interest to a single corporation OF in
dtvtdual exceed $4,000 for the calendar
year., you u deduct thereafter
n per cent on all over So. 900 unless
the Individual or corporation holding
n coupons or mortgage notes shall
ME with o a declaration of ex-
emption provided In the act. AS to
this year. ct the source responsibility
are advised hat you need not withhold
= tax unless the disbursements OF In
terest to an individual or corporation
exceed $4,000 for the fling Of ex-
emption declaration with you.
Second-As to interest collected for
others. where you merely serve as col
iector. you are not obliged to make
deduction OF the tar, and to protect
yourself you should not make payments
OF these coupons OF the interest on
notes until you have received the
money therefor from the debtor, or
source. lest the debtor take off the tax
at the source n therefore remit to
you less than the amount called for In
n coupons or interest notes.
Third-You are obliged to keep 9
record OF tax with held by you and
make return of same to the collector OF
internal revenue for the district In
which you reside.
g. This bank has approximately
1880. OO0.0 In mortgage loans scat
tered all over this state and states adj
Joining. A great many of he coupons
are payable at banks located in the
county In which the mortgaged proper.
~ Is. The question that suggests itself
I o me Is whether OF not we are obliged
to attach a certificate Of ownership tl
every coupon. II that Is required of US
1t Is going to US an enormous
amount OF labor.
"A. In IN case Of mortgage loans not
the obA4ations of corporations. Join,
stock companies. or associations. and
insurance companies, the debtor is no
required to withhold the tax at tht
source unless his payment of interes'
exceeds 5000 for the calendar year
You will not therefore, file certificate
OF exemption with mortgage coupon
except with debtors paying you in ex-
cess Of $1,000 in interest during thu
calendar year, and you will then attach
your exemption certificate to each
~ A6"6C.f
Illustrate: You buy from an Iows
state bank 100000 In mortgage bond
OF individuals, principal and interes'
payable at said bank. After the baial
has redeemed 5000 of the interes
coupons held by you, II must thereaftel
withhold the tax unless you attach Il
9 coupon OF each separate mortgag,
your certificate declaring exemption
You are probably aware that you as {
bank are not subject to the tax at tn,
source, and you will understand there
fore. hat the certificates, you shoulS
Tile ia not what is described as til,
ownership certificate. but that pre-.
scr1bed for corporations O taxable
ut the source.
Where a corporation has agreet
20 pay taxes Of all kinds OF character
including the government taxes. shoul(
g deduction be made at the source from
costpona from such corporate bond
presented for payment?
a. notwithstanding q corporation.
agreement to pay taxes Of ans kind,
andss character It WITH be the duty 8
the source t deduct the tax on sucI
intereak coupons unless certificate q
exemption is attachedto them.
ssIS 81 4 am ma rieG ii living witt
my wife having Income from varioul
When do claim my x4.C30
Nmption
XSou win claim exemption III III,
IL NtliFh&f0&1gn ~, 80 iNN,rxIsz@x