F E D E R A L R E G IS T E R , March 17, 1936 Section 2 of the act S ec . 2. In addition to other taxes, there shall be levied, collected, and paid upon the income of every employee, 3 Mi per centum of the compensation of such employee (except a representative) not in excess of $300 per month, received by after the effective date.
Section 4 of the act S ec . 4. In addition to other taxes, every carrier shall pay
an excise tax of 3y2 per centum of the compensation not in excess of $300 per month paid by it to its employees after the effective date. »
Section 7 of the act
S ec . 7. In addition to other taxes, there shall be levied,
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basis upon which it is paid are immaterial. I t may be paid on the basis of piece work, a percentage of profits, daily, hourly, weekly, monthly, annually, or on any other basis. (2) Any payment made to an employee of so-called dis missal wages or the payment of his regular wages notwith standing absences from work. Pension payments, workmen’s compensation payments, and any payments of like char acter received on account o f sickness, disability, or other form of personal relief are not included. (3) Any amount paid to an employee as allowance or reim bursement for traveling or other expenses incurred in the business of the carrier only to the extent of the excess of such amount over such expenses actually incurred and accounted for by the employee. (4) Generally, premiums paid by a carrier on a policy o f life insurance covering the life of an employee if the carrier is not a beneficiary under the policy. However, premiums paid by a carrier on policies of group life insurance covering the lives of its employees are not compensation if the em ployee has no option to take the amount of the premiums instead of accepting the insurance and has no equity in the policy (such as the right o f assignment or the right to the surrender value on termination of his employment)* (5) Deductions by a carrier from remuneration of an em ployee. Amounts deducted from the remuneration of an employee constitute compensation paid to the employee at the time of such deduction. (6) Payments made by a carrier into a stock bonus, pension, or profit-sharing fund if such payments inure to the exclusive benefit of the employee and may be withdrawn by the em ployee at any time, or upon resignation or dismissal of if the contract for services requires such payment as part of the remuneration. Whether or not under other circumstances such payments constitute compensation depends upon the particular facts of each case.
collected, and paid upon the compensation of each em ployees’ representative received by such representative an income tax of 7 per centum annually upon that portion of the compensation of such employees’ representative not in excess of $300 per month. The compensation of a repre sentative for the purpose of ascertaining the tax thereon phaii be determined according to such rules and regulations as the Commissioner of Internal Revenue shall deem just and reasonable and as near as may be shall be the same compensation as if the representative were still in the employ of the last form er carrier. A r t . 6. Definition of “ compensation” .— (a ) Compensation in the case of an employee.— (1) When used in these regulations, the term compensation, in the case of an employee, means all remuneration received for employment in money or in some thing which the employeer may use in lieu of money. For example, an employee receives $150 in mpney and a grocery order for $50. His total compensation would be $200. If, however, the remuneration for employment performed during any calendar month by an employee for a carrier exceeds $300, the term does not include that part of such remuneration in CHAPTER II. EMPLOYEES’ TAX excess of the first $300 thereof. T h e term does not include Section 2 of the act free transportation furnished by a carrier to an employee Sec. 2. In addition to other taxes, there shall be levied, (see, however, paragraph (3) of subdivision (d ) of this collected, and paid upon the income of every employee, 3Vai article). (2) I f an employee receives a sum representing remuneraper centum of the compensation of such employee (except a tion for employment performed for a carrier in two or more representative) not in excess of $300 per month, received calendar months and if the facts necessitate making a deter by him after the effective date. A r t . 201. Rate and measure of employees' tax.— The em mination of the part of such sum which is compensation by reason of the $300 limitation provided in paragraph (1) of ployees’ tax is imposed at the rate of 3l/¿ per cent on all this subdivision, the remuneration for employment performed compensation received by an employee during the period during each calendar month is that part of such sum which March 2, 1936, to February 28, 1937, both dates inclusive, with respect to employment performed after August 28, is attributable to employment performed in such month. (b ) Compensation in the case of a representative.— When 1935. (For definitions of “ employee” , “ employment” , and used in these regulations, the term compensation, in the case “ compensation” , see articles 3, 4, and 6 ( a ) , respectively; see of a representative, means all remuneration received by him also articles 203 and 609.) A r t . 202. When employees’ tax attaches.— The employees’ for services performed as an officer or other official of the employee organization. I f the remuneration of the repre tax attaches at the time that the compensation is either sentative for services performed during any calendar month actually or constructively received by the employee. Com exceeds $300, the term does not include that part of such pensation is received when it is credited to the account of remuneration which is in excess of the first $300 thereof. or set apart for an employee so that it may be drawn upon If, however, the representative establishes to the satisfaction by him at any time although not then actually reduced to of the Commissioner that he would have received a lesser possession. T o constitute receipt in such a case the compen amount of remuneration from his last farmer carrier em sation must be credited or set apart to the employee without ployer had he remained continuously in the employ of such any substantial limitation or restriction as to the time or carrier, the portion of the remuneration received by him as manner of payment or condition upon which payment is to representative, not in excess of such lesser amount, shall be be made, and must be made available to him so that it m a y the representative’s compensation. For any period during be drawn at any time, and its receipt brought within his which an individual is both an employee and a representative, own control and disposition. See article 302, relating to the his compensation as an employee shall be determined as pro time the carriers’ tax attaches. vided in subdivision (a ) of this article, and his compensation Section 3 (a ) of the act as a representative shall be determined as provided in this S ec. 3 ( a ) . The tax imposed by section 2 o f this Act shall subdivision (b ). (c) Items included as compensation.— The term compensa be collected by the employer of the taxpayer, by deducting the tion includes, among other things (both with respect to em amount of the tax from the compensation of the employee as ployees, and, in analogous situations, with respect to repre and when paid. Every employer required so to deduct the sentatives) — tax is hereby made liable fo r the payment of such tax and is (1) Salaries, wages, commissions, fees, drawing accounts,hereby indemnified against the claims and demands of any bonuses, and any other remuneration payments. The name person fo r the amount of any such payment made by such by which remuneration is designated, the amount, and the employer.
