The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1921-12-21
Some Changes in
Income Tax Law
NEW RULING BECAME EFFEC-
TIVE NOVEMBER %; SEVERAL
IMPORTANT CHANGES.

IMPORTANT CHANGES.
The following statement is issued by
Collector of Internal Revenue for the
District of Minnesota.
Enactment of new revenue legis-
lation has brought to the offices Of
Collectors of Internal Revenue a flood
of inquiries regarding various provi-
sions. The Revenue Act of 1921 be-
came effective November %, 1921, "un-
less otherwise provided for"
To avoid error in the preparation
of their returns and later difficulties
with the Bureau of Internal Revenue,
taxpayers are advised to carefully note
the changes and when they become eff
fective.
The excess profits tax. is repealed
as of January |, 1922. The rates for
1921 are unchanged.
"The surtax rates for the calendar
year 1921 are unchanged, and range
from per cent on the amount of net
income between Sc, 900 and $4,000 to IS
per cent on the amount of net income
in excess of $1,OO0,000. For the calen-
dar year 1922 the surtax rate, 1 per
cent on the amount net income be-
tween $4,000 and $4,000 to SO per
cent on the amount by which the net
income exceeds $20O,00O.0O.
"The exemption allowed for de-
pendent is increased from 5000 to $400.
Married persons living with husband
or wife and heads of families are al
lowed personal exemption of $1,000
(instead of $4,000 unless the net in
come is in excess of $4,000, in which
case the personal exemption is only
$4,000. The act provides that in no
case shall the reduction of the person
al exemption from $4,000 to $4,000
operate to- increase the tax which
would be payable if the exemption
were $1,000 by more than the amount
of the net income in excess Of 5000.
This is to overcome the disparity in
the case of two taxpayers, one of
whom is just within the lower $4,000
exemption and the other just within
the higher $4,000 exemption.
Single persons, and married per-
sons not living with husband or wife,
are allowed an exemption of $1,000.
Nonresident aliens are allowed a
single persons exemption of $1,000.
Persons having gross income for 1921
of SIS 900 or over are required to make
a return, regardless of the amount of
net income.
Provision is made for the repeal as
of January l, 1922 of the tax on stock
holders of a personal service corpora
tion as such. After that date such
corporations are to be taxed In the
same manner as other corporations.
''The income tax on corporations for
the calendar year 1922 and thereafter
is increased from 10 to 1914 per cent.
The $4,000 exemption heretofore al
lowed corporations is to be granted
only to those corporations whose net
income is $25,000 or less.
MANY persons are under the i'm
preston that the tax on ice cream,
soft drinks, etc, monthly returns Of
which are required have been repeal
ed with the enactment of the new art
These taxes remain in force until the
end of the calendar year 1921.
"No change is made in the tax on
admissions, except that after January
1, 1922 there will be no tax where adj
mission is less than 10 cents. Effec-
tive January 1, 1922 the following
taxes are also abolished: on musical
instruments, sporting goods, chewing
gum, portable electric fans, thermos
bottles. fur articles, pleasure boats
and pleasure canoes, unless sold fc~
more than $100, toilet articles, medi-
cines and numerous articles of apparel.
"On and after January /, 1922 the
tax on various works of art is reduc-
ed from 10 per cent to per cent, the
tax on candy from 5 per cent to per
cent and the tax on carpets, rugs,
trunks, valises, purses, fans, etc. from
10 per cent of sales price in excess of
specified amounts to 5 per cent of sales
price in excess of specified amounts.
"The tax on parcel post packages is
eliminated effective January /, 1922.
"The new act provides that no tax-
payer shall be subjected to unneces-
sary examinations or Investigations.
and only one inspection of his book
of accounts shall be made for each
taxable year unless the taxpayer re-
quests otherwise, or the Commissioner
notifies the taxpayer in writing that
an additional inspection is necessary.
''The period for filing returns on the
calendar year basis is from January
l to March Is, 1922. This year, as
last, the tax may be paid in full at
the time of filing. the return or in four
equal installments, due on or before
March, June Is, September Is and
December Is.
Copies of the revenue act may be
had by application to this office"