Page:United States Statutes at Large Volume 40 Part 1.djvu/353

 334 SIXTY-FIFTH CONGRESS. Sess. I. C11. 63. 1917. ¤'°°“§,;§,§&·*’““°‘ residents, corgprate or otherwise, and including the_ income derived from dividen on capital stock or from net earmngs of resident corporations, joint-stock companies or associations, or msurance New mvmm com anies, whose net income is taxable 1mder this title." vm. psa, p.` 766, (2g Section ten of such Act of September eighth, nineteen hundred ""'“"‘°°°‘ and glixteen, is hereby further amended by adding a new subdivision as o ows: aigeiiiliitglediii °ii$: " (b) In addition to the income tax imposed by subdivision (a) of "‘¤*· this section there shall be levied, assessed, collected, and paid annually an additional tax of ten aper centum upon the amount, remaining xmdistributed six months ter the end of each calendar or Hscal year, of the total net income of every corporation, joint-stock company or association, or insurance company, received duringlthe year, tu ot m_ as etermined for the urposes of the tax imposed by suc subdivi- .,;.,.1.,,;, ° °° ” sion (a), but not including the amount of any mcome taxes paid by N0, sppumble ,0, it within the year impose by the authority of the United States. geugilm retained ra- "The tax imposed y this subdivision shall not apply to that por- °”°"" tion of such undistributed net income which is actu y invested and employed in the business or is retained for employment in the reasonable requirements of the business or is invested in obliglations of the Pmm United States issued after September first, nmeteen undred and s¤¤¤'u ma so em- seventeen: Provided, That if the Secretary of the Treasury ascertains p‘°"°d· and finds that any pprtion of such amount so retained at any time for employment in the business is not so employed or is not reasonably required in the business a tax of fifteen per centum shall be Ap umm to mh levied, assessed, collected, and upaid thereon. _ _ angie yu. “The foregoing tax rates sha apply to the undistributed net income received by every taxable corporationéfoint-stock company or association, or insurance company in the c endar year nineteen hundred and seventeen and m eac year thereafter, except that if it has fixed its own fiscal year under the provisions of existing law, the for oing rates shall apgly to the ggoportion of the taxable undistributgd net incomeretum for the cal year ending prior to December thirty- first, nineteen hundred and seventeen, w ich the eriod between January first, nineteen hundred and seventeen, and the end of such Deductions fiscal year bears to the whole of such fiscal dyear." Aiiqweaamiusaeas- SEc._ 1207. (1) That paragraphs third an fourth of subdivision (a) P°{,`°°'{f"’,,:,,’ ,,_ ,68, of section twelve of suc Act 0 September eighth, nineteen hundred sggrgé pam on m_ and sixteen are hereby amended to read as ollows: asemms. “Tlurd. The amount of interest paid within the year on its indebt- ,·§§:,F}’“”*“‘““‘ edness (except on indebtedness incurred for the purchase of obligations or secimties the mterest upon which IS exem t from taxation as income under this title) to an amount of such indiebtedness not in excess of the sum of (a) the entire amount of the paid-up capital stock outstandinfg at the close of the year, or, if no capital stock, the entire amount 0 capital employed in the business at the close of the year, and (b) one-half of its interest-bearinfg indebtedness then out- {Z§§}’fg’;;, ,,0,,,, ,,0, standini: Provided, That for the purpose o this title preferred capii¤¢¤¤d¤¤· tal stoc shall not be considered_interest-bearix1g indebtedness, and mmm wmmt ww interest or dividends paid plpon this stock shall not be deductible from mai tame. gross income: Pr fu er, That in cases wherein shares of capital stock are issued without par or nominal value, the amount of paid-up capital stock, within the meaning of this section, as re resented by such shares, will be theamount of cash, or its equivalient, paid or SmmdbycOu3,m,_ transferred to the corporation as a consideration for such shares: Promdedfurther, That in the case of indebtedness wholly secured by property collateral, tangible or intangible, the subject of sale or hy- pot ecation in the ordinary business of such corporation, joint-stock companv or association as a dealer only in the property constituti such coilateral, or in loaning the funds thereby procured, the toad