The sun., 1919-02-07

tc) of this section) a tax eaua, to the
| sum OF the following:
FIRST Bracket--2o per ccntum OF the
'oun' vi tne net income In excess OF
the excess profits credit Differentiated IN.
der section 312) and not in excess OF 90
per centum of the invested capitaI.
| second Bracket--40 per centum OF the
amount OF the net income in excess OF 90
per centum of the invested capital.
| 'c) For the taxable year 1919 and
each taxable year thereafter there shall
DE IeVied. collected and paid upon the net
income OF every corporation which de-
| ives IN such year n net income of more
| tnan $4,000 from anv Government com
tract or contracts made between April &
1911 and November IL, 1918. both dates
inclusive. tax equal to the sum of the
following: ''e
! G) Such portion Of a tax computed
at the rates specified in subdivision IA,
ms the part of the net income attribute
able 10 such Government contract or
| contracts bears to the entire net in.
come. In computing such tax the excess
profits credit and the war profits credit
applicable to the taxable year shall be
used;
w Such portion of tax computed
! mt the rates specified in subdivision (b)
as the part of the net income not at
tributable to such Government contrac,
OF contracts bears to the entire net in
! come.
For the purpose of determining the
part OF the net income attributable to
such Government contract or contracts
| the proper apportionment and ALLEGATION
| or the deductions with respect to gross
| income derived from such Government
| contract or contracts and from other
| sources, respectively. shall be determined
| under rules and regulations prescribed
| by the Commissioner with the approval
| of the Secretary.
| td) In any case where the full amount
| OF the excess profits credit Is not allowed
under the first bracket OF subdivision (a)
! or tb). by reason of the fact that such
| credit is in excess of 20 per centum of
the invested capital. the part not so al
lowed shall he deducted from the amount
| in the second bracket
te) For the purposes OF the act an
proved March 81. 1918. entitled IAN act
! to provide for the operation of trans
| portation systems while under Federal
| control. for the just compensation of
their owners and for other purposes" the
tax imposed by this title shall be treated
as levied by an act in amendment of
Title ii. of the revenue act of 1917.
Sec. 3O2 That the tax imposed by
subdivision (a) of section 3Ol shall in
no case be more than 80 per centum OF
tho amount of the net income in excess
| of $4,000 and not in excess OF 100000,
plus so per Centum of the amount of the
net income in excess of 10000: the tax
imposed by subdivision OBJ of section
3O1 shall in no case be more than 20 per
centum of the amount of the net income
in excess OF $4,000 and not in excess OF
S20.00n, plus 40 per centum of the
amount OF the net income in excess of
$4,000: and the above limitations shall
apply to the taxes computed under sub
divisions (a) and CD of section 301, re-
spectively. when used in subdivision (c)
Of that section. Nothing in this section
shall be construed in such manner as to
increase the tax imposed by section 30l.
Sec, 500. That IL part of the net in
come OF a corporation Is derived %
| from trade or business Cor a branch
OF a trade or business) in which the
employment OF capital is necessary, and
90 part Constituting not less than
80 per centum of its total net income)
Is derived from separate trade or BUSH
ness COR a distinctly separate branch OF
the trade or bus.ness) which IL con-
shutting the sole trade or business would
bring it within the class of personal
service corporations" then (under regu-
lations prescribed by the Commissioner
with the approval OF the Secretary the
tax upon the first part of such net
income shall be separately computed
(allowing in such computation only the
same proportionate part of the credits
authorized in sections 3ll and 3l2). and
the tax upon the second part shall be
the same percentage thereof the tax
SO computed upon the first part is OF
such first part: Provided. that the tax
upon such second part shall in no case
less the tax upon the entire net income,
If computed without benefit OF this sec
, ton. would constitute less than 20 per
centum OF such entire net income, in
which event the tax shall be determined
upon the entire net income. without
reference to this section, as other taxes
are determined under this title. The
total tax computed under this section
shall be subject TO the limitations pro-
vided in section 302,
Sec. 3O4. ta) That the corporations
enumerated in section 231 shall to the
extent that they are exempt from in
come tax under Title H.. be exempt
from taxation under this title.
tb) Any corporation whose net income
for the taxable year is less than $4,000
shall be exempt from taxation under
this title.
I'D In the case of any corporate en-
gagged in the mining of gold. the portion
OF the net income derived from the min
ing of gold shall be exempt from the
tax imposed by this title, and the tax
on the remaining portion of the net in
come shall! be the proportion Of tav
computed without the benefit Of this
subdivision which such remaining por-
ton OF the net income bears to the entire
ret income.
Sec. 300. That If tax is computed
under this title for a period Of less than
twelve months. the specific exemption
of $4,000, wherever referred to in this
title, shall be reduced to an amount
which is the same proportion OF $4,000
as the number Of months in the period
is OF twelve months.
PART III.-CREDITs.
Sec. $40. That as used in this title
the term ''pre-war period" means the
calendar years 1911, 1912, and 1913. or.
IL a corporation was not in existence
as many of such years during the while
of which the corporation was in exist
ence.
Sec. oil. Ca) That the war-profits
credit shall consist of the sum of:
% A specific exemption Of $4,000 |
and
t2) An amount equal TO the average
net income of the corporation for the
pre-war period, plus or minus, as the
case may be, 10 per cent. of the differ /
ence between the average invested capt. !
tai for the pre-war period and the in !
vested capital for the taxable year. If |
the tax Is computed for a period Of less
than twelve months such amount shall !