The daily banner. (Cambridge, Md.) 1897-2008, 1921-12-15
Collector TAFT Tells
OF Income Law Changes

Enactment of new revenue legis-
lation has brought to the offices OF
Collectors of Internal Revenue a
flood of inquiries regarding various
provisions. The Revenue Act OF
1927 became effective November %,
1921. "unless 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 be-
come effective.
The excess profits tax is repealed
as of January /, 1922. The rates
for 1921 are unchanged.
The surtax rates for the calendar
year of 1921 are unchanged, and
range from l per cent on the amount
of net income between $4,000 anc
$4,000 to 65 per cent on the amount
CT net income in excess of S1,OO0'-
900. For the calendar year 19Zz
the surtaX rates range from l per
cent on the amount of net income be-
tween $4,000 and $4,000 to so per
cent on the amount by which the net
income exceeds 100000.
The exemption allowed for a de-
pendent is increased from 5000 to
$500. Married persons living with
husband or wife and heads OF famll-
les are allowed personal eXemp-
ton of $4,000 instead of $4,000, I'M
less the net income 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 re-
duction of the personal exemption
from $500 10 $4,000 operate to in
crease the tax which would be pay
able if the exemption wore $500 By
more than the amount OF the net III
come in excess Of $4,000. 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
$2500 exemption.
Single persons and married per-
sons not living with husband or wife
are allowed an exemption of $1,000.
Nonresident aliens are allowed
single personal exemption of $1,000.
Persons having gross incomes Tor
1921 of $4,000 or over are required
10 make a return, regardless or the
amount OF net income.
Provision is made for the repeal
as of January l, 1922 of the tax on
stockholders of a personal service
CORPORATION 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 there
after is increased from 10 to II IL 10
The $4,000 exemption heretofore al
lowed corporations is to be granted
only to those corporations whose
net income is $25 600 Oh less.
Many persons are under the I'M
preston that the taxes on ice cream,
soft drinks etc, monthly returns OF
which are required, have been re-
realed with the enactment OF the
aegr act. hose taxes remain in force
uutil the end of the calendar year
1921.
No change is made in the tax on
admissions, except that after Janu-
airy, l, 1922 there will be no tax
admission is 10 cents or less. EHec-
I've January l, 1922 the following
axes are also abolished, on musical
instruments, sporting goods, chewing
gum, portable electric fans, thermos
bottles, fur articles. pleasure boats
and pleasure canoes (unless sold for
more than 5000, toilet articles.
medicines and numerous articles OF
apparel.
On and after January 1. 1922 the
tax on various works of art IS reduc-
err from 10 per cent to per cent
the taX on candy from per cent tc
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
per cent OF sales price in excess OF
specified amounts.
The tax on parcel post packages Is
eliminated effective January l, 1922
The new act provides that no tax,
payer shall be subjected to unneces
sary examinations or vesttgat1ons
and only one inspection of his book!
of accounts shall be made for eacf
taxable year unless the taxpayer re
nuests otherwise or the Commission
er notifies the taxpayer in writing
that an additional inspection Ii
necessary.
The period of filing returns on the
| calendar year basis is from January
| l to March is, 1922. This year. a.
last, the tax may be paid In full
| The time Of filling the return or II
four equal installments. due on o.
| boforo March IL June IS Septem
| Der IS and Dec ember Is.
Copies of the revenue act may d.
had by application to this office.
| GALEN L. TAFT,
Collector of Internal Revenue,