The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1919-10-23

: are exhaustible. This recognize
comes under the head now designate
in the laws as depletion" Althous
= various taxes were levied by the fet
eral government on mining compani,
@ and on mineral production during II
civil war, the first federal tax in RI
cent years to affect the mining indus
' try was the corporation excise tax {
1903. 1T levied tax Of per cent O
, the net income above $4,000 This la
!, provided, as a deduction from gros
, income to arrive at taxable net incom
"a reasonable allowance for deprecia
tion of property, il any," but did nc
specifically refer to depletion of min
eral deposits. Many mining compan
les, however, in making their return
under this law made claims for de
pletion The internal revenue burea1
allowed these claims until 1913, whe.
the supreme court decreed that "de
probation" as used in the law does no
apply to exhaustion Of mineral depos
its and that therefore no deduction
occasioned by this exhaustion could b.
allowed
In 1913. however after special con
Sttutional amendment had validates
the principle Of taxing incomes, tn,
1908 excise act was superseded by
new law. This levied per cent ia,
on net income, which should be com.
ruted after deducting among other
things, "a reasonable allowance fol
the exhaustion, wear and tear of pro-
perty. arising out of its use or en-
ployment in the business, not to exceed
in the case Of mines, per cent of the
gross value at the mine of the output
for the year for which the computa-
ton is made" Thus the principles of
both depreciation of physical proper
ty and depletion of mineral deposits
were put upon firm legal basis.
The 1918 revenue law was suppressed
ed by one in 1916 which levied 2 per
cent on the net income of corporations
and provided tax exempt deductions A..
follows: "A reasonable allowance for
the exhaustion, wear and tear of pro-
perty arising out of it's use or en-
ployment in the business or trade" In
the matter Of depletion, oil and gas
wells were for the first time specifical-
ly distinguished from mines. The oil
and gas wells were granted "a reas-
enable allowance for actual deduction
in flow and production" while to
mines was given "a reasonable al
lowance for depletion thereof not to
exceed the market value in the mine
of the product thereof which has been
mined and sold during the year for
which the return and computation are
made"
The 1917 law applied a 6 per cent
tax on corporation incomes with ex-
actly the same terms as to deprecia-
ton and depletion as did the 1915 law,
but to meet the heavy additional ex-
penses of war there was also levied
an excess profit tax of from 20 to so
per cent on portions of the net income
as determined in relation to invested
capital. There was also inserted
provision that an additional 10 to Is
per cent be levied on that portion of
income undistributed six months after
the end of the year, except such parts
y that surplus as are actually invest
I'd and employed in the business or
ire retained for employment in the |
requirements of the bust
hess or are invested in Liberty bonds. |
Finally, the law of 1918 levies a ~
Der cent tax on corporation incomes |
or the year 1918 and 10 per cent for
subsequent years. In this law, depre-
iation is covered by "a reasonable al
owance for the exhaustion, wear and |
ear of property used in the trade or
including a reasonable al
pwance for obsolescence," while with
aspect to depletion, the law provides:
In the case of mines. oil and gas
'ells, other natural deposits, and tim
err, a reasonable allowance for deple-
ion and for depreciation of improve
lents, according to the peculiar con-
itions III each case, based upon cost
cost of development not 9TH
rwise deducted: Provided, that in the
ase Of such properties acquired pri- {
r to March 1, 1913, the fair market
alue Of the property Cor the taxpay- I
IS interest therein) on that date shall c
? taken in lieu Of cost up to that G
,te: Provided, further that in the a
Use of mines, oil and gas wells, dis I
,vered by the taxpayer, on or after I
arch l, 1918. and not acquired as
e result of purchase of proven o
act or lease, where the fair market II
due Of the property is materially
sproportionate TO the cost, the de- Il
elton allowance shall be based upon m
e fair market value Of the property a
the date of the discovery, or with al
80 days thereafter" Ip
There was also imposed war pro- b
and excess profit tax which pro- p,
les for the collection on various d
lotions Of the income of amounts Ifo
At range In 1918 up to as much as a
per cent of certain portions, and up lin
40 per cent for subsequent years re
up, these several laws have Ide
'vided for taxation Of income at bt