| Show PROBLEM OF EXCESS PROFITS TAX TO IS SETTLED BY U. U S. S Treasury Treasur Dept Rules on Question of Vital Importance Importance Importance tance to Utah Cos Coso The rhe excess profits tax exemption question Ques- Ques ques ques- tion in ut 11 which man many Utah mining companies companies com corn panics are vitally interested definitely has been decided by the treasury de department department de- de as follows in a a letter leter signed by I. I L. L F. F Speer deputy commissioner of or internal revenue In reply you are informed that for forthe forthe the purpose of the tax Imposed by section sec sac tion ton of ot the act referred to hereinbefore hereinbefore herein herein- before tho the deduction as provided for fo In section of the act is allowable only for the tax at the rate of or 20 per cent This confirms the contention that on onal all al Income in excess of or 15 per cent on the tho l invested vested capital for the taxable year the rates set down in the law lawshall lawshall shall apply with regard to the deduction of or 1000 and an allowance of from 7 to 9 per cent says the Boston News Bu Bu- reau Where this deduction Is less les than 15 IS ISper per cent of the Invested capital the 20 per cent tac ta rate applies apples to the differ differ- ence If I. I as is the case CM with companies having less than capital a 9 per percent percent pr cent exemption plus exceeds 15 per percent percent percent cent of the tile capital there Is no tax at atthe atthe atthe the 20 per cent rate but the excess of exemption over ovel 15 per cent cannot be deducted on the successive steps where a higher tax is levied Two examples will wi illustrate the effect effect ef ef- ef- ef feet of the ruling A eo corporation oraton with a capital of makes 40 per cent or The law provides for an initial flat fiat fat exemption of 1000 and a further ex exemption ex- ex I emption of 9 per e cent n on rt invested t capital capi- capi g i I tat tal If there has l been e 9 per cent or more earned In the prewar period Therefore Therefore There There- 1 fore the tile exemption would be But the law under the present ruling permits permits permits per per- mits the tile exemption to be deducted only onto up to 15 per c cent of the invested s capital capi capi- fJ tal or The corporation r ho aW will fl Ct then pa pay tax as follows Invested capital 1917 Net earnings Exemption 9 per cent plus Amt T. T Tax 20 per cent ent on 15 per cent cent after exemption S. S 25 2 per cent on amount between between between be be- tween 15 and ZO 2 per percent cent 21 1000 20 35 per cent on amount between between be be- I tween 20 and 2 25 per percent cent L t. t 1000 I 4 45 43 per cent on amount be between 25 a and 33 per I cent cent 1600 CO 60 per cent on amount over 33 3 per cent 1400 1100 Totals Total 2160 In the case of or a corporation with capital entitled l to 9 per pcr cent ent ex exemption exemption ex- ex emption and of course also to the allowed to all al corp corporations tile the computation computation compu compu- tation would woul work worl workout o out t thus Invested capital 1917 Net earnings Amt T. T Tax 15 6 per cent of 1917 Deduct exemption 9 per percent percent percent cent plus pius 1000 2 2 20 per cent on 1 15 per cent less exemption 2400 2 25 23 per er cent on amount be between be- be tween 15 and 20 per percent percent cent cent tweet 1200 35 per cent on amount be between between between be- be tween 20 and 2 25 23 per percent cent 43 45 15 per cent centon on amount be between between between be- be tween 25 and 33 31 per percent cent J. J 60 cent on amount over I 33 per per cent cent 2500 I- I II I Totals |
