Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-11-03
NO TURMOIL AT BANKS
OVER INCOME TAX LAW
Collections Are Made Without
Ripple of Unusual Activity,
Treasury Hears.

No extraordinary turmoil and incom-
prehension attended the first experience
of New York banks in Withholding the
income tax at the source on interest on
bonds, notes and other obligations of
corporations, joint stock companies or
associations and insurance companies,
maturing November /. This is the COM
ment of observers and other advices re-
ceived at the Treasury Department.
Many banks had special windows for
the receipt of dividend coupons. The
work progressed with no more excitement
and stress than attend the usual quar-
ter-day business in financial circles. The
regulations issued by the Treasury De-
partment to govern the collection of the
tax on incomes at the source became
gradually understood as they We're made
operative, the agents acquiring facility
and comprehension in putting the rules
into practice There was hardly ripple
of unusual activity.
While many questions are being put
to the Treasury Department regarding
the meaning of the income tax pro-
visions of the tariff law, there is no
lack of confidence in the minds of those
responsible for putting the law into
operation that every problem will yield
to intelligent Interpretation.
The individual whose income, except
from interests on bonds and other Sc
81 this year, exceeds the amount eX
empted under, the law from the income
tax impost, will be held responsible direct
to the government for paymentsof the tax
wherever the Withholding agent, under
the regulations of the Treasury Depart
ment, is relieved of the liability.
The withholding agent need not take
cognizance, under the regulations. of
any such interest. wages or salaries.
etc, passing through his hands and
payable to another Individual, prior to
November /, although sue h sums may
be subject to the tax. He will be eX-
pected to withhold the tax from the
moment when the aggregate amounts
passing through his bands between Oc-
tober 81 and January /, 1914, shall ex-
coed the exemptions provided by the
law and regulations.
Individual Himself Liable.
The Withholding agent is not required,
under the regulations to deduct and with
hold prior to November / the normal tax
of l per cent for which an individual is
liable. The individual himself is liable.
Whenever the total amount of income
paid to any person by withholding
agent after October 81 shall be in ex-
cess of the exemption limit, then. in
that event, the withholding agent shall
be liable for and shall deduct and with
hold the tax on such amount, unless
such person shall file claim of exemp-
ton as allowed in the tariff act. The
amount of the exemption allowable for
the five-sixths of the year 1913 is $500
If the annual exemption is $4,000. or
S3,333.33 if the annual exemption is
$4,000.
So employers of high salaried men
will not bother with what has gone be-
fore but will count up the revenues
from the first of this month to the end
OF the year When these totals exceeu
the exemptions then they will begin co
withhold the ! per cent tax. So with.
those who pay rent or interest other
than on bonded securities and mort
cages to other individuals. This is the
construction of the regulations made by
the Treasury Department.