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CHAPTER TWENTY-FOUR.
TAX ON EMPLOYMENT OF CHILD LABOR.

[Title XII, act of February 24, 1919 (40 Stat. 1057).) Sec.

Sec. 1200. Excise tax on net profits of busi- 1204. Yearly returns to collector.

ness using prohibited labor; 1205. Assessment and payment of tax, ages, etc., designated.

1206. Inspection of premises; form of 1201. Net profits computed; deductions

report; punishment for oballowed.

structing inspection. 1202. Sales for personal benefit at less 1207. “ Taxable year " defined; first than market price; computa

taxable year. tion of gross amount. 1203. Certificates permitting child to

work.

TITLE XII.-TAX ON EMPLOYMENT OF CHILD LABOR.

etc.,

Sec. 1200. [Act of February 24, 1919 (40 Stat., 1057).) Excisco tax on That every person (other than a bona fide boys' or girls' business using canning club recognized by the Agricultural Department brokes of a State and of the United States) operating (a) any designated. mine or quarry situated in the United States in which children under the age of sixteen years have been employed or permitted to work during any portion of the taxable year; or (b) any mill. cannery, workshop, factory, or manufacturing establishment situated in the United States in which children under the age of fourteen years have been employed or permitted to work, or children between the ages of fourteen and sixteen have been employed or permitted to work more than eight hours in any day or more than six days in any week, or after the hour of seven o'clock post meridian, or before the hour of six o'clock ante meridian, during any portion of the taxable year, shall pay for each taxable year, in addition to all other taxes imposed by law, an excise tax equivalent to 10 per centum of the entire net profits received or accrued for such year from the sale or disposition of the product of such mine, quarry, mill, cannery, workshop, factory, or manufacturing establishment.

Sec. 1201. That in computing net profits under the provisions of this title, for the purpose of the tax there shall computed ; deducbe allowed as deductions from the gross amount received or accrued for the taxable year from the sale or disposition of such products manufactured within the United States the following items:

(a) The cost of raw materials entering into the production:

(b) Running expenses, including rentals, cost of re- Operating pairs, and maintenance, heat, power, insurance, manage. Penses. ment, and a reasonable allowance for salaries or other compensations for personal services actually rendered, and for depreciation;

Net profits

tions allowed.

Raw materials.

exInterest on business debts.

Business taxes.

Losses.

Sales for personal benefit at less than market price. gross amount.

(c) Interest paid within the taxable year on debts or loans contracted to meet the needs of the business, and the proceeds of which have been actually used to meet such needs;

(d) Taxes of all kinds paid during the taxable year with respect to the business or property relating to the production; and

(e) Losses actually sustained within the taxable year in connection with the business of producing such products, including losses from fire, flood, storm, or other casualties, and not compensated for by insurance or otherwise.

Sec. 1202. That if any such person during any taxable

year or part thereof, whether under any agreement, arComputation of rangement, or understanding or otherwise, sells or dis

poses of any product of such mine, quarry, mill, cannery, workshop, factory, or manufacturing establishment at less than the fair market price obtainable there for either (a) in such manner as directly or indirectly to benefit such person or any person directly or indirectly interested in the business of such person; or (b) with intent to cause such benefit; the gross amount received or accrued for such year or part thereof from the sale or disposition of such product shall be taken to be the amount which would have been received or accrued from the sale or disposition of such product if sold at the fair market

price.

Effect of certificate permit.

Sec. 1203. (a) That no person subject to the proviting child to sions of this title shall be liable for the tax herein iinwork, etc.

posed if the only employment or permission to work which but for this section would subject him to the tax, has been of a child as to whom such person has in good faith procured at the time of employing such child or permitting him to work, and has since in good faith relied upon and kept on file a certificate, issued in such form, under such conditions and by such persons as may be prescribed by a board consisting of the Secretary, the Commissioner, and the Secretary of Labor, showing the

child to be of such age as not to subject such person to Punishment for the tax imposed by this title. Any person who knowfalse statement as

ingly makes a false statement or presents false evidence certificates,

in or in relation to any such certificate or application there for shall be punished by a fine of not less than $100, nor more than $1,000, or by imprisonment for not more than three months, or by both such fine and imprison

ment, in the discretion of the court. State certifi. In any State designated by such board an employment

certificate or other similar paper as to the age of the child, issued under the laws of that State, and not inconsistent with the provisions of this title, shall have the

same force and effect as a certificate herein provided for. unintentional (b) The tax imposed by this title shall not be imposed mistakes. in the case of any person who proves to the satisfaction

of the Secretary that the only employment or permission

to etc.

cates effective.

Allowance for

to collector.

Contents.

Assessment and payment of

to work which but for this section would subject him to the tax, has been of a child employed or permitted to work under a mistake of fact as to the

age

of such child, and without intention to evade the tax.

Sec. 1204. That on or before the first day of the third Yearly returns month following the close of each taxable year, a true and accurate return under oath shall be made by each person subject to the provisions of this title to the collector for the district in which such person has his principal office or place of business, in such form as the Commissioner, with the approval of the Secretary, shall prescribe, setting forth specifically the gross income received or accrued during such year from the sale or disposition of the product of any mine, quarry, mill, cannery, workshop, factory, or manufacturing establishment, in which children have been employed subjecting him to the tax imposed by this title, and from the total thereof deducting the aggregate items of allowance authorized by this title, and such other particulars as to the gross receipts and items of allowance as the Commissioner, with the approval of the Secretary may require.

Sec. 1205. That all such returns shall be transmitted forthwith by the collector to the Commissioner, who tax shall, as soon as practicable, assess the tax found due and notify the person making such return of the amount of tax for which such person is liable, and such person shall pay the tax to the collector on or before thirty days from the date of such notice.

Sec. 1206. That for the purposes of this Act the Com- Inspection missioner, or any other person duly authorized by him, shall have authority to enter and inspect at any time any mine, quarry, mill, cannery, workshop, factory, or manufacturing establishment. The Secretary of Labor, or anv person duly authorized by him, shall, for the purpose of complying with a request of the Commissioner to make such an inspection, have like authority, and shall make report to the Commissioner of inspections made under such authority in such form as may be prescribed by the Commissioner with the approval of the Secretary of the Treasury.

Any person who refuses or obstructs entry or inspec- Punishment for tion authorized by this section shall be punished by a fine spection. of not more than $1,000, or by imprisonment for not more than one year, or both such fine and imprisonment.

SEC. 1207. That as used in this title the term "taxable year” shall have the same meaning as provided for the purposes of income tax in section 200.* The first taxable year for the purposes of this title shall be the period between sixty days after the passage of this Act and December 31, 1919, both inclusive, or such portion of such period as is included within the fiscal year (as defined in section 200) of the taxpayer.

premises.

of

re

Form port.

in

"Taxable year

" defined.

taxable

First year.

See p. 473.

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