Section 38 Of The Tax Act: Case Study
Issue
Did the corporation violate section 38 of the tax Act? The case addresses a tax payer’s questions the constitutional validity of section 38 of the tax Act, Corporation Tax Act, enacted on August 5, 1909, against the corporation.
Rule
“The tax is to be equivalent to 1 per cent of the entire net [220 U.S. 107, 145] income over and above $5,000 received by such corporation or company from all sources during the year, excluding, however, amounts received by them as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax imposed by the statute”. (Flint v. Stone Tracy Co., 1911).
Analysis
The corporation is responsible to file federal taxes, which is an “excise tax”,
Did the corporation violate section 38 of the tax Act? The case addresses a tax payer’s questions the constitutional validity of section 38 of the tax Act, Corporation Tax Act, enacted on August 5, 1909, against the corporation.
Rule
“The tax is to be equivalent to 1 per cent of the entire net [220 U.S. 107, 145] income over and above $5,000 received by such corporation or company from all sources during the year, excluding, however, amounts received by them as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax imposed by the statute”. (Flint v. Stone Tracy Co., 1911).
Analysis
The corporation is responsible to file federal taxes, which is an “excise tax”,