Page:United States Statutes at Large Volume 95.djvu/210

 95 STAT. 184 26 USC 541.

26 USC 21.

PUBLIC LAW 97-34—AUG. 13, 1981 (2) PERSONAL HOLDING COMPANY TAX.—Section 541 (relating to

personal holding company tax) is amended by striking out "70 percent" and inserting in lieu thereof "50 percent". (3) AMENDMENT TO SECTION 21.—Section 21 (relating to effect of changes in rates during taxable year) is amended by striking out subsections (d), (e), and (f) and inserting in lieu thereof the following: "(d) SECTION NOT To APPLY TO SECTION 1 RATE CHANGES MADE BY ECONOMIC RECOVERY TAX ACT OF 1981.—This section shall not apply

Ante, p. 176. 26 USC 3402.

to any change in rates under section 1 attributable to the amendments made by section 101 of the Economic Recovery Tax Act of 1981 or subsection (f) of section 1 (relating to adjustments in tax tables so that inflation will not result in tax increases)." (e) WITHHOLDING TABLES.— (1) DETERMINATION OF WITHHOLDING.—Section 3402(a) (relating

to requirement of withholding income tax at source) is amended to read as follows: "(a) REQUIREMENT OF WITHHOLDING.—

"(1) IN GENERAL.—Except as otherwise provided in this section, every employer making payment of wages shall deduct and withhold upon such wages a tax determined in accordance with tables or computational procedures prescribed by the Secretary. Any tables or procedures prescribed under this paragraph shall— "(A) apply with respect to the amount of wages paid during such periods as the Secretary may prescribe, and "(B) be in such form, and provide for such amounts to be deducted and withheld, as the Secretary determines to be most appropriate to carry out the purposes of this chapter and to reflect the provisions of chapter 1 applicable to such periods. "(2) AMOUNT OF WAGES.—For purposes of applying tables or procedures prescribed under paragraph (1), the term 'the amount of wages' means the amount by which the wages exceed the number of withholding exemptions claimed multiplied by the amount of one such exemption. The amount of each withholding exemption shall be equal to the amount of one personal exemption provided in section 151(b), prorated to the payroll period. The maximum number of witmiolding exemptions permitted shall be calculated in accordance with regulations prescribed by the Secretary under this section, taking into account any reduction in withholding to which an employee is entitled under this section. "(3) CHANGES MADE BY SECTION l o i OF THE ECONOMIC RECOVERY

TAX ACT OF 1981.—Notwithstanding the provisions of this subsection, the Secretary shall modify the tables and procedures under paragraph (1) to reflect— "(A) the amendments made by section 101(b) of the Economic Recovery Tax Act of 1981, and such modification shall take effect on October 1, 1981, as if such amendments made a 5-percent reduction effective on such date, and "(B) the amendments made by section 101(a) of such Act, and such modifications shall take effect— "(i) on July 1, 1982, as if the reductions in the rate of tax under section 1 (as amended by such section) were attributable to a 10-percent reduction effective on such date, and

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