Page:United States Statutes at Large Volume 45 Part 1.djvu/875

 824 INCOME TAX If no pa rt ac cru ing to State, etc ., the net income of persons tax- able. Bri dge s to be ac- quired by State, etc. Tax levied on opera- tion proceeds, prior to division thereof. Refund to State, etc. Res tri cti on. If no part accruing to State, etc ., the net income from operation taxable. Dividends to Chinese resid ents from China Trade corpora tions. Receipts of shipown- ers ' mutua l ass oci a- tions. SEVENTIETH CONGRESS. SEss. I. Cia. 852. 1928 . which b ears the same relation to t he amount of the tax as the amount which (but for the imposition of the tax imposed by this title) would have accrued directly to or for the use of such State, Territory, political subdivision, or the District of C olumbi a, bears to the amount of the net income from the operation of such public utility for such taxable year. (2) If by the terms of such contract no part of the proceeds from the operation of the public utility for the taxable year would, irrespective of the tax imposed by this title, accrue dir ectly to or f or the use of such S tate, T errito ry, pol itical sub- division, or the District of Columbia, then the tax upon the net income of such person from the operation of such public utility shal l be le vied, assesse d, coll ected, and pa id in t he man ner and at the rates prescribed in this title. (e) Bridges to be acquired by State or political subdivision .-When- ever any State or political subdivision thereof, in pursuance ofa contract to which it is not a party entered into before the enactment of this Act, is to acquire a bridge- (1) If by the terms of such contract the tax imposed by this title is to be paid out of the proceeds from the operation of such bridge prior to any division of such proceeds, and if, but for the imposition of the tax imposed by this title, a part of such pro- ceeds for the taxable year would accrue directly to or for the use of or would be applied for the benefit of such State or political subdivision, then a tax upon the net income from the operation of such bridge shall be levied, assessed, collected, and paid in the manner and at the rates prescribed in this title, but there shall be refunded to such State or political subdivision (under rules and re gulati ons to be pr escri bed by the C ommis sioner with the approval of the Secretary) an amount which bears the same relation to the amount of the tax as the amount which (but for the i mposition of the tax impose d by this tit le) would have accrued directly to or for the use of or would be applied for the ben efit o f such State o r poli tical s ubdivis ion, b ears to the am ount of th e net income from the opera tion of such bridge for su ch taxable year. No such refund shall be made unless the entire amoun t of the refu nd is to be ap plied in part payment for the acquisition of such bridge. (2) If by the terms of such contract no part of the proceeds from the operation of the bridge for the taxable year would, irrespective of the tax imposed by this title, accrue directly to or for t he use of or be applied for the benefit of such State or political subdivision, then the tax upon the net income from the operation of such bridge shall be levied, assessed, collected, and paid in the manner and at the rates prescribed in this title. (f) Dividends from " China Trade Act" corporation. In the case of a person, amounts distributed as dividends to or for his benent by a corporati on organized u nder the Chin a Trade Act, 1922, if, at t he time of such distribution, he is a resident of China, and the equitable right to the income of the shares of stock of the corporation is in good faith vested in him. (g) Sh ipowner s' pro tection and in demnit y assoc iations .-The rec eipts of s hipown ers' m utual protec tion and indemnity as sociat ions not organized for profit, and no part of the net earnings of which inu res to the ben efit of any p rivate shareh older ; but such corporations shall be subject as other persons to the tax upon their net income from interest, dividends, and rents.

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