The Birmingham age-herald., 1919-12-28
STATE INCOME TAX COLLECTIONS ID BE l. BASED ON RETURNS ID GOVERNMENT
Report to State Tax Com. mission Must Be Made Within 30 Days After
 Filing Returns With
 Federal Department

Between January and March 15, 1920, every individual, partnership, association and corporation in the United States must make return of his or it's income for the year 1s1s upon which federal income tax will be leviei and collected.
 Within 90 days after the report is filed with the United States treasury depart ment report must also be made to the state tax commission and upon this the state will levy and collect an. income tax for the year 1920.
 The federal income tax is no new thing and perhaps those who have been paying it the past few years are familiar with It's provisions, but the state income tax is something new and, although it has been explained and digested in the news papers on several occasions there seems to be considerable misunderstanding, or no understanding at all, about it. As the time for making out these returns is now almost here it may not be amiss to again point out the salient features of the Ala bama bill.
 The income tax provisions of the state revenue law fill q pages of an ordinary sized book, and contains over 10000 words, or about eight columns of The Age Herald.
 TAX RATE ON INCOMES
 The income tax rate is 2 per cent on all net incomes mp to 5000; 21s per cent on incomes in excess of 5000 and not over $7500; , per cent on incomes in excess of $7500 and not over s10,00o; 31k per cent on incomes in excess of s10,o00 and not over s15,000 and per cent on all incomes in excess cf $15,0oO, with the following ex- empsions: In the case of a single person, or married person not living with husband or wife, 5000; or in case of a head of 9 family, or married person living with husband or wife, 5000.
 Only one exemption of 5000 is allowed to husband and wife living together against their aggregate net income. For each person, other than husband or wife. dependent upon and receiving his chief support from the taxpayer, if such de- pendent is under IS years of age, or inca pablo of se1f-support because mentally or physically defective an additional allow ance of $500 is allowed.
 Gain or loss in property sold during the tax year or on property acquired prior to the first day cf the year is ascertained by comparing the fair cash value on January 1 and the sale price. and of prop erty acquired during the year by ascer- taining the difference between the pur- chase and sale price.
 EXCHANGE OF PROPERTY
 Where property is exchanged no income tax is collected unless cash is received in exchange.
 In cases where property is sold the gain or loss is distributed equally over the period of years during which the prop erty was owned by the taxpayers, or in case where the property is owned by the taxpayer on January 1. 1919. the nun Der of years between that date and the oate of sale.
 reouire an inventory to be made in order to dete~mine the income of the taxpayer.
 Cross income is defined as profit and incorne derived from salaries. wages. or compensation for personal serVices oi wbateyer kind. or in whatever form paio' ar from professions vocauons, traues' business commerce or sales or dea'ihss in property, whether real or personal gro,Uinr out of ownership or use or or interast in such property: also from in tarest collected rents, dividends, securi- ties or transactions of any business car ried on for gain or profit. and the income derived from any source whatever.
 
 NET INCOME DEFINED
 Net income is defined as the gross income less deductions in all ordinary exnenses incurred in carrying on any trade or business, including reason ahle allowance for salaries or other compensation for personal servlce ac- tually rendered, and including rentals and other payments required to pc made as a condition of the continued use or possession for the purposes oi trade or business of property to which the taxpayer has not taken, or Is not taking title in which he has no equity all interest paid or accrued within the taxable year on indebtedness; taxes paid or accrued within the taxable wear imposed sta) by authority of the United States: (b) by authority of any state or territory, including the state of Alabama, or of any county, schoo district. municipality or other taxing subdivision of any state or territory but not including those assessed against local benefits of kind tend ing to increase the value of the prop erty assessed; Co losses sustained dur. ing the taxable year and not compen- sated for by insurance or otherwise. ii incurred in trade or business; (d) losses sustained during the taxable year and not compensated for by in surance or otherwise, if incurred ir any transaction entered into for profit though not connected with the trade or business; (e) losses sustaiped dur