Source: http://www.chanrobles.com/usa/us_supremecourt/271/310/case.php
Timestamp: 2019-09-20 15:12:52
Document Index: 534557617

Matched Legal Cases: ['§ 6', '§ 1', '§ 6', '§ 10', '§ 4', '§ 230']

The Pittsburgh Company owned all the capital stock of the West Side Company. Their railroads were taken over by the President and were operated under federal control from January 1, 1918, to March 1, 1920. They failed to make any agreement with the Railroad Administration as to just compensation to be paid them for the use of their properties until final settlement was made July 1, 1921. At that time, there was paid to plaintiffs $1,570,000 in addition to $250,000 which had been paid on account in January, 1920. And the Director General assumed, in respect of the payment of taxes, the obligations which are specified in § 6 of the standard form contract authorized by the Federal Control Act, March 21, 1918, § 1, c. 25, 40 Stat. 451. chanroblesvirtualawlibrary
The authorized standard form of contract, § 6(a), provided that all war taxes assessed against the company chanroblesvirtualawlibrary
The tax of 2 percent imposed by § 10 of the Revenue Act of 1916 was known as the normal tax. The additional tax of 4 percent imposed by § 4 of the Revenue Act of 1917 was a war tax. Section 230(a) of the Revenue Act of 1918 provided that, in lieu of the 2 percent normal tax and the 4 percent war tax, there should be paid for the calendar year 1918 a tax of 12 percent of net incomes and for each year thereafter 10 percent. Section 230(b) provided that, for the purpose of the Federal Control Act, five-sixths of the 12 percent tax and four-fifths of the 10 percent tax should be "treated as levied by an Act in amendment of Title I of the Revenue Act of 1917." Thus, it was plainly indicated that the tax to be borne by the Director General was the 2 percent. The amount in controversy is 2 percent of the income tax for 1921. It was assessed under the Revenue Act of that year, which provided that, in lieu of taxes imposed by the Act of 1918, there should be paid 10 percent of net incomes for 1921 and 12 1/2 percent for each year thereafter. The divisions between the Director General and the corporation, prescribed by subdivision (b) of § 230 of the Act of 1918. applied only to taxes imposed by subdivision (a) of that section. No divisions were prescribed by the Act of 1921. Those made by the earlier Act were not intended to apply to taxes imposed by the Act of 1921, and neither of them would produce the two percent normal tax if applied to 12 1/2 percent, the rate for each year after 1921. chanroblesvirtualawlibrary