$1,260 upon surtax net incomes of $20,000; and upon surtax net incomes in excess of $20,000 and not in excess of $22,000, 15 per centum in addition of such excess. $1,560 upon surtax net incomes of $22,000; and upon surtax net incomes in excess of $22,000 and not in excess of $26,000, 17 per centum in addition of such excess. $2,240 upon surtax net incomes of $26,000; and upon surtax net incomes in excess of $26,000 and not in excess of $32,000, 19 per centum in addition of such excess. $3,380 upon surtax net incomes of $32,000; and upon surtax net incomes in excess of $32,000 and not in excess of $38,000, 21 per centum in addition of such excess. $4,640 upon surtax net incomes of $38,000; and upon surtax net incomes in excess of $38,000 and not in excess of $44,000, 24 per centum in addition of such excess. $6,080 upon surtax net incomes of $44,000; and upon surtax net incomes in excess of $44,000 and not in excess of $50,000, 27 per centum in addition of such excess. $7,700 upon surtax net incomes of $50,000; and upon surtax net incomes in excess of $50,000 and not in excess of $56,000, 31 per centum in addition of such excess. $9,560 upon surtax net incomes of $56,000; and upon surtax net incomes in excess of $56,000 and not in excess of $62,000, 35 per centum in addition of such excess. $11,660 upon surtax net incomes of $62,000; and upon surtax net incomes in excess of $62,000 and not in excess of $68,000, 39 per centum in addition of such excess. $14,000 upon surtax net incomes of $68,000; and upon surtax net incomes in excess of $68,000 and not in excess of $74,000, 43 per centum in addition of such excess. $16,580 upon surtax net incomes of $74,000; and upon surtax net incomes in excess of $74,000 and not in excess of $80,000, 47 per centum in addition of such excess. $19,400 upon surtax net incomes of $80,000; and upon surtax net incomes in excess of $80,000 and not in excess of $90,000, 51 per centum in addition of such excess. $24,500 upon surtax net incomes of $90,000; and upon surtax net incomes in excess of $90,000 and not in excess of $100,000, 55 per centum in addition of such excess. $30,000 upon surtax net incomes of $100,000; and upon surtax net incomes in excess of $100,000 and not in excess of $150,000, 58 per centum in addition of such excess. $59,000 upon surtax net incomes of $150,000; and upon surtax net incomes in excess of $150,000 and not in excess of $200,000, 60 per centum in addition of such excess. $89,000 upon surtax net incomes of $200,000; and upon surtax net incomes in excess of $200,000 and not in excess of $250,000, 62 per centum in addition of such excess. $120,000 upon surtax net incomes of $250,000; and upon surtax net incomes in excess of $250,000 and not in excess of $300,000, 64 per centum in addition of such excess. $152,000 upon surtax net incomes of $300,000; and upon surtax net incomes in excess of $300,000 and not in excess of $400,000, 66 per centum in addition of such excess. $218,000 upon surtax net incomes of $400,000; and upon surtax net incomes in excess of $400,000 and not in excess of $500,000, 68 per centum in addition of such excess. $286,000 upon surtax net incomes of $500,000; and upon surtax net incomes in excess of $500,000 and not in excess of $750,000, 70 per centum in addition of such excess. $461,000 upon surtax net incomes of $750,000; and upon surtax net incomes in excess of $750,000 and not in excess of $1,000,000, 72 per centum in addition of such excess. $641,000 upon surtax net incomes of $1,000,000; and upon surtax net incomes in excess of $1,000,000 and not in excess of $2,000,000, 73 per centum in addition to such excess. $1,371,000 upon surtax net incomes of $2,000,000; and upon surtax net incomes in excess of $2,000,000 and not in excess of $5,000,000, 74 per centum in addition of such excess. $3,591,000 upon surtax net incomes of $5,000,000; and upon surtax net incomes in excess of $5,000,000, 75 per centum in addition of such excess. (c) Tax on personal holding companies. For surtax on personal holding companies, see section 351. (d) Avoidance of surtaxes by incorporation. For surtax on corporations which accumulate surplus to avoid surtax on stockholders, see section 102. ART. 12-1. Surtax.-In addition to the normal tax imposed by section 11 a surtax is imposed at the rates specified in section 12 upon the surtax net income of every individual, resident or nonresident, except nonresident alien individuals subject to the tax imposed by section 211(a). The surtax net income is the amount of the net income in excess of the personal exemption and credit for dependents. (See generally articles 25-1 to 25-7.) For surtax on corporations improperly accumulating surplus see section 102. As to surtax on personal holding companies, see section 351. ART. 12-2. Computation of surtax.-The following table shows the surtax due for taxable years beginning after December 31, 1935, upon certain specified amounts of surtax net income. In each instance the first figure of the surtax net_income in the surtax⚫netincome column is to be excluded and the second figure included. The percentage given opposite applies to the excess of income over the first figure in the surtax net-income column. The last column gives the total surtax on a surtax net income equal to the second figure in the surtax net-income column. The surtax for any amount of surtax net income not shown in the table is computed by adding to the surtax for the largest amount shown which is less than the surtax net income, the surtax upon the excess over that amount at the rate indicated in the table. Accordingly, the surtax due for taxable years beginning after December 31, 1935, upon a surtax net income of $63,128 would be $12,099.92, computed as follows: Surtax on $62,000 from table.. Surtax on $1,128 at 39 percent_. Total. SEC. 13. NORMAL TAX ON CORPORATIONS. $11, 660. 00 439.92 12,099. 92 (a) Definition.-As used in this title the term "normal-tax net income" means the net income minus the sum of (1) INTEREST ON OBLIGATIONS OF THE UNITED STATES AND ITS INSTRUMENTALITIES.-The credit provided in section 26(a). (2) DIVIDENDS RECEIVED.-The credit provided in section 26(b). Such credit shall not be allowed in the case of a mutual investment company, as defined in section 48. (3) DIVIDENDS PAID.-In the case of a mutual investment company the credit provided in section 27, computed without the benefit of subsection (b) thereof (relating to dividend carry-over). (b) Imposition of tax.-There shall be levied, collected, and paid for each taxable year upon the normal-tax net income of every corporation, a normal tax as follows: Upon normal-tax net incomes not in excess of $2,000, 8 per centum. $160 upon normal-tax net incomes of $2,000; and upon normal-tax net incomes in excess of $2,000 and not in excess of $15,000, 11 per centum in addition of such excess. $1,590 upon normal-tax net incomes of $15,000; and upon normaltax net incomes in excess of $15,000 and not in excess of $40,000, 13 per centum in addition of such excess. $4,840 upon normal-tax net incomes of $40,000; and upon normaltax net incomes in excess of $40,000, 15 per centum in addition of such excess. (c) Exempt corporations.-For corporations exempt from taxation under this title, see section 101. (d) Banks and trust companies.-For rate of tax on certain banks and trust companies, see section 104. ART. 13-1. Normal income tax on corporations.-In general, the Act imposes a normal income tax on corporations at the graduated rates specified in section 13 (b). Every corporation is liable to the normal income tax at such graduated rates except (1) corporations expressly exempt from taxation under Title I of the Act (see section 101), (2) banks, as defined in section 104, (3) insurance companies (see sections 201, 204, and 207), (4) foreign corporations (see section 231), (5) domestic corporations entitled to the benefits of section 251 by reason of deriving a large portion of their gross income from sources within a possession of the United States, and (6) China Trade Act corporations (see Supplement K). It makes no difference that a domestic corporation subject to the graduated normal income tax imposed by section 13 (b) may derive no income from sources within the United States. The normal income tax on corporations is upon the normal-tax net income, that is, the net income as defined in section 21 minus the sum of (1) the credit provided in section 26 (a) for interest on obligations of the United States and its instrumentalities and (2) the credit for dividends received provided in section 26(b), except that this credit is not allowed in the case of a mutual investment company, as defined in section 48 (e). In the case of a mutual investment company, for the purpose of the normal-tax net income, a credit is allowed against net income for dividends paid as provided in section 27, computed without the benefit of subsection (b) thereof, relating to the dividend carry-over. The tax is payable upon the basis of returns rendered by the corporations liable thereto, except that in some cases it is to be paid at the source of the income. (See also sections 47, 52, 53, 144, and 235.) For surtax on undistributed profits of corporations, see section 14. For surtax on corporations improperly accumulating surplus. see section 102. As to surtax on personal holding companies, see section 351. For what the term "corporation" includes and for the difference between domestic and foreign corporations, see section 1001. The following table shows the normal income tax due from corporations in general upon certain specified amounts of normal-tax net income. In each instance the first figure of the normal-tax net income in the normal-tax net income column is to be excluded and the second figure included. The percentage given opposite applies to the excess of income over the first figure in the normal-tax net income column. The last column gives the total tax on a normal-tax net income equal to the second figure in the normal-tax net income column. CORPORATION NORMAL INCOME TAX TABLE The normal tax for any amount of normal-tax net income not shown in the table is computed by adding to the tax for the largest amount shown which is less than the normal-tax net income, the tax upon the excess over that amount at the rate indicated in the table. Accordingly, the normal tax due upon a normal-tax net income of $20,000 would be $2,240, computed as follows: Tax on $15,000 from table._ Tax on $5,000 at 13 percent.-. Total SEC. 14. SURTAX ON UNDISTRIBUTED PROFITS. (a) Definitions. As used in this title $1,590 650 (1) The term "adjusted net income" means the net income minus the sum of (A) The normal tax imposed by section 13. 2, 240 |