1 of every individual, corporation, partnership, or association 2 arising from the publication of newspapers, magazines, or 3 periodicals, entitled to be entered as second-class mail matter 4 (whether or not so entered), a tax of five per centum of the 5 amount of such net income in excess of $4,000. 6 For the purposes of this section net income shall be de7 termined upon the same basis and in the same manner as 8 provided in Title I of the Act entitled "An Act to increase 9 the revenue, and for other purposes," approved September 10 eighth, nineteen hundred and sixteen, as amended, in so far as 11 such title is applicable. The provisions of section four of this 12 Act with respect to a tax for a fiscal year ending during the cal13 endar year nineteen hundred and seventeen shall also apply 14 to the tax imposed by this section upon à corporation or 15 partnership. 16 17 TITLE XII.-INCOME TAX AMEND Ments. SEC. 1200. That subdivision (a) of section two of such 18 Act of September eighth, nineteen hundred and sixteen, is 19 hereby amended to read as follows: 20 "(a) That, subject only to such exemptions and de21 deductions as are hereinafter allowed, the net income of a 22 taxable person shall include gains, profits, and income, de23 rived from salaries, wages, or compensation for personal 24 service of whatever kind and in whatever form paid, or from 25 professions, vocations, businesses, trade, commerce, or sales, .1 2 or dealings in property, whether real or personal, growing out of the ownership or use of or interest in real or personal 3 property, also from interest, rent, dividends, securities, or 4 the transaction of any business carried on for gain or profit, 5 6 or gains or profits and income derived from any source what ever: Provided, That the term "dividends" as used in this 7 title shall be held to mean any distribution made or ordered 8 to be made by a corporation, joint-stock company, associa9 tion, or insurance company, out of its earnings or profits 10 accrued since March first, nineteen hundred and thirteen, 11 and payable to its shareholders, whether in cash or in stock 12 of the corporation, joint-stock company, association, or in13 surance company, which stock dividend shall be considered 14 income, to the amount of the earnings or profits so distributed: 15 Provided further, That any distribution made to the share16 holders of a corporation, joint-stock company or association, 17 or insurance company, in the year nineteen hundred and 18 seventeen, or subsequent tax years, shall be deemed to have 19 been made from the net income of the year in which such dis20 tribution is made or, if such income is insufficient, from the 21 most recently accumulated undivided profits or surplus, and 22 shall constitute a part of the annual income of the shareholder 23 for the respective years in which earned by the corporation, 24 joint-stock company, association, or insurance company, and 1 shall be taxed to the shareholder at the rate prescribed by law 2 for such years.” 3 SEC. 1201. (1) That paragraphs second and third of sub 4 division (a) of section five of such Act of September eighth, 5 nineteen hundred and sixteen, are hereby amended to read as 6 follows: 7 "Second. All interest paid within the year on his 8 debtedness except on indebtedness incurred for the purchase of 9 obligations or securities the interest upon which is exempt from 10 taxation as income under this title; 11 "Third. Taxes paid within the year imposed by the au12 thority of the United States (except income and war profits 13 taxes) or of its Territories, or possessions, or any foreign 14 country, or by the authority of any State, county, school dis15 trict, or municipality, or other taxing subdivision of any 16 State, not including those assessed against local benefits;" 17 (2) Subdivision (c) of section five of such Act of Septem18 ber eighth, nineteen hundred and sixteen, is hereby repealed. 19 SEC. 1202. (1) That paragraphs second and third of sub20 division (a) of section six of such Act of September eighth, 21 nineteen hundred and sixteen, are hereby amended to read 22 as follows: 23 "Second. The proportion of all interest paid within the 24 year by such person on his indebtedness (except on indebted 1 ness incurred for the purchase of obligations or securities the 2 interest upon which is exempt from taxation as income under 3 this title which the gross amount of his income for the year 4 derived from sources within the United States bears to the 5 gross amount of his income for the year derived from all 6 sources within and without the United States, but this de duction shall be allowed only if such person includes in the 8 return required by section eight all the information necessary 9 for its calculation; 10 "Third. Taxes paid within the year imposed by the 11 authority of the United States (except income and war 12 profits taxes), or of its Territories, or possessions, or by the 13 authority of any State, county, school district, or municipality, 14 or other taxing subdivision of any State, paid within the 15 United States, not including those assessed against local 16 benefits;" 17 (2) Subdivision (b) of section six of such Act of September 18 eighth, nineteen hundred and sixteen, is hereby amended to 19 read as follows: 20 "(b) There shall also be allowed the same credit as 21 specified in subdivision (b) of section five, and likewise a 22 credit for the amount of income, the normal tax on which has 23 been paid or withheld for payment at the source of the income 24 under the provisions of this title." 1 (3) Section six of such Act of September eighth, nineteen 2 hundred and sixteen, is also further amended by adding a 3 4 new subdivision to read as follows: "(c) A nonresident alien individual shall receive the 5 benefit of the deductions and credits provided for in this 6 section only by filing or causing to be filed with the collector 7 of internal revenue a true and accurate return of his total 8 income, received from all sources, corporate or otherwise, in 9 the United States, in the manner prescribed by this title; 10 and in case of his failure to file such return the collector shall 11 collect the tax on such income, and all property belonging to 12 such nonresident alien individual shall be liable to distraint 13 for the tax." 14 SEC. 1203. (1) That section seven of such Act of Septem15 ber eighth, nineteen hundred and sixteen, is hereby amended 16 to read as follows: 17 "SEC. 7. That for the purpose of the normal tax only, 18 there shall be allowed as an exemption in the nature of a deduc 19 tion from the amount of the net income of each citizen or resident 20 of the United States, ascertained as provided herein, the sum 21 of $3,000, plus $1,000 additional if the person making the 22 return be a head of a family or a married man with a wife 23 living with him, or plus the sum of $1,000 additional if the person making the return be a married woman with a hus25 band living with her; but in no event shall this additional 24 |