Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1918-10-24
CONSOLIDATED RETURN
OF INCOME TAX ALLOWED
Groups OF Corporations Under One
Control May File Single
Report.
HOUSE PROVISION cur OUT
Senate Finance Committee Makes
Important Changes In Provision
OF War Revenue Bill for Sake OF
Simplicity.

| WASHINGTON. October 23.--An
| amendment to the reven1c bill to per-
| nit groups of corporations owned I'm
whole or in part by u taxpayer or by
another corporation TO make Il Con
solidated return" In computing the in
come tax was adopted by the Senate
FINANCE Committee to-day. The House
| Dill contained specific provision
against such construction Of reguia-
lions and required each individual cor
poration to make n filing.
The amendment adopted by the Sem
alto is OF vital Importance to business
generally as it not only simplities the
methods of making the returns there
ny Tightening the administrative duties
OF the collector. but IL will enable n
noinihs corporation. for Instance. to
make one return instead Of II half doz-
en- or more, where there arc "A number
OF smaller corporations affiliated with
II in interest.
The committee struck out the 'pro-
hlbiiive section in the House bill aud
substituted new section. making it
mandatory upon such taxpayers to file
consolidated return. The text of the
new section Is as follows:
Section 80 Interpretations which
arc affiliated within the meaning OF
this section shall. under regulations 10
be prescribed by the commissioners
with the approval of the secretary.
make consolidated return of nc; in
poses Of the income and the war OK
cess profits tax. and such taxes shall BE
computed and determined in accordance
herewith In any case in which n tax
Is assessed upon the basis OF a con
soiidated return, the .otal tax shall he
computed IN the frs; instance AS Il unit
ana Shai! thcn be assessed uDon the re
Sr"ciiTc aud affiliated corporations In
Such proportions as MAJ Lr agreed
nnon among them or ia the absence Of
any such agreement. then on th. basis
,nI mi, ,N
nroper;y nss:gnahic to each. only one
Htec,hc S:edit as provided III section ed
Shai! DC allowed in computing the IN
como t"% and only one specific cXcmp-
ton OF $4,000 shall be allowed IN com
nnting the war excess profits tax. For
the purpose OF this section. two or
more du'neS:!" corporations VIII be
deemed TO be affiliated (aJ II such cor
p"ration arc Identified with the same
corporation owns directly. directly.
controls through closely affiliated inter-
'st'', or By u nominee or nominees sub
siAnua.!y an OF the stock OF the other
or otncrS, or X substantially all Of the.
stock OF Two or more corporations is
owned or controlled by the same IN
tcie3ts. or II one such corporation buys
from or sells to another products or
services 1T prices above or below the
current market. thus cfircting an arti-
hcit! distribution OF profits. or in any
N'S 50 aIranSeS It's financial relation
sA1I& with another corporation az 10
assign to Il !" Gisproportiona share OF
h't income OF invested capital. For
more railroads. gas. electric. water or
Ltrcr public service corporations viii
not be deemed 10 be affiliated when
operated independently and not phyEi-
c.uY connected or merged. provided
that when Il railroad or public utilit,.
IN owned oy an industrial corporation
and operated as plans facility or as
an integral part Of n rrcup orguniza
ton OF affiliated corporations !; Shall
10 included IN the consolidated return.
II any Of such affiliated corporations"
AMENDMENT DRAFTED
ny TREASURY DEPARTMENT
The amendment was drafted by the
Treasury Department and was sun
mittcd with Tho approval or Comri,
sioner ROPER, VII" urged lis adoption
ministration Of the law. When the
prohibttivc section was nut in tho
House bill. Chairman Kitchin. or The
Ways and Mcars Committee. contendnd
that 1t YVES dircc;e. against the large
holding corporations 10 require them 10
file individual returns for each and
every Interest Commissioner Roper
holds. however. that with tic restric.
lions placed in the Senate amendment.
corporations viii no, he specially ia
H H n While the work Of his Office will
The committee concluded the work
on inc war excess profits section by
making number OF changes in the
definitions OF invested capii:ii. The es.
tate or inheritance taxes are 10 u. TAX
en- ip next
The committee has under considera-
non an important suggestion to the cf-
feet that individuals and copartnerships
should be included with the corpora
tions IN inc class subject 10 the war ey-
cess profits tax
The bill as it now stands levics The
wal excess profits tax upon corpora
irons only but II is well-known fact.
as stated by Senator Simmons to-day
tEat copartnerships enjoy an enormous
auvhhtage over corporations, and in
neing exempted from the war excess
profits tax ~'''
The committee may decide to make
the war profits tax apply to all t3s
PAYERS who enjoy profits in the war"