PUBLIC LAWS-CH. 619-OCT. 21, 1942 Post, p. 830. Post, pp. 838, 808, 881. 63 Stat. 71. 26U.S.0. §5201- 208. Post, pp. 821 , 861, 867-875,878. 55 Stat. 700. 26U.S. C., Supp.I, 23 (c) (1) (B). 40 Stat. 302 , 1088; 42 Stat. 271; 48 Stat. 208, 770; 64 Stat. 975. 26 U. S. 0. §§710- 752; Supp. I, 66 710- 743. Post, p . 899. 55 Stat. 700. 26U.S . C., Supp. I, 6 23 (c) (2). 53 Stat. 19. 26 U. . 0 . §26(e),(f). 64 Stat. 975. 26U.S.C. 710- 752; Supp. I , ?1 710- 743. Post, p. 899. 64 Stat. 976. 26U. S .C . 710(b); Supp. I, § 710 (b). Post, pp. 900, 902. 54 Stat. 986. 988. 26 U. S.C .. 726; Supp. I , 721. Post, pp. 912, 920, 918. Post, p. 899. 54 Stat. 989. 26U.S.C.I729(c), (d). Post, p. 921. 54 Stat. 987, 988. 26 U. S. C. 10725, 727. Post, pp. 920,08. 53 Stat. 19. 26U..C.. 27; 53 Stat. 21 . 26U.. .C. 28. Pow, p. 897. by limiting such credit to 85 per centum of the net income reduced by the credit for income subject to the tax imposed by Subchapter E of Chapter 2 m lieu of 85 per centum of the adjusted net income so reduced), and minus, in the case of a public utility, the credit for dividends paid on its preferred stock provided in section 26 (h). For the purposes of this subsection dividends received on the preferred stock of a public utility shall be disregarded in computing the credit for dividends received provided in section 26 (b). "(b) IMPOSITION OF TAx. -There shall be levied, collected, and paid for each taxable year upon the corporation surtax net income of every corporation (except a Western Hemisphere Trade Corporation as defined in section 109, and except a corporation subject to the tax imposed by section 231 (a), Supplement G, or Supplement Q), a surtax as follows: "(1) SURTAX NET INCOMES NOT OVER $25,000. - Upon corporation surtax net incomes not over $25,000, 10 per centum of the amount thereof. "(2) SURTTAX NET INCOMES OVER $25,000 BUT NOT OVER $50,000. - Upon corporation surtax net incomes over $25,000, but not over $50,000, $2,500, plus 22 per centum of the amount of the corpora- tion surtax net income over $25,000. "(3) SURTAX NET INCOMES OVER $50,000.-Upon corporation surtax net incomes over $50,000, 16 per centum of the corporation surtax net income." (c) NONDEDUCTIBILm Y OF ExcEss-PRoFrrs TAX. - (1) Section 23 (c) (1) (B) (relating to taxes not deductible in computing net income) is amended to read as follows: "(B) war-profits and excess-profits taxes imposed by Title II of the Revenue Act of 1917, Title III of the Revenue Act of 1918, Title III of the Revenue Act of 1921, section 216 of the National Industrial Recovery Act, section 702 of the Revenue Act of 1934, or Subchapter E of Chapter 2, or by any such provisions as amended or supplemented;". (2) Section 23 (c) (2) (relating to special rules for deduction of excess-profits tax) is repealed. (d) CREDIT FOR ADJUSTED EXCESS-PROFITS NET INCOME. - Section 26 (e) and (f) (cross-references) are amended to read as follows: "(e) INCOME SUBJECT TO EXCESS-PROFITS TAx.- In the case of any corporation subject to the tax imposed by Subchapter E of Chapter 2 an amount equal to its adjusted excess-profits net income (as defined in section 710 (b)). In the case of any corporation computing such tax under section 721 (relating to abnormalities in income in the taxable period), section 726 (relating to corporations completing contracts under the Merchant Marine Act of 1936), section 731 (relat- ing to corporations engaged in mining strategic minerals), or section 736 (b) (relating to corporations with income from long-term con- tracts), the credit shall be the amount of which the tax imposed by such subchapter is 90 per centum. For the purpose of the pre- ceding sentence the term 'tax imposed by Subchapter E of Chapter 2' means the tax computed without regard to the limitation provided in section 710 (a) (1) (B) (the 80 per centum limitation), without regard to the credit provided in section 729 (c) and (d) for foreign taxes paid, and without regard to the adjustments provided in section 734. This subsection shall not apply to any corporation exempt from such tax under section 725 or section 727. "(f) DIVIDENDS PAD COEDTrr-For corporation dividends paid credit, see section 27. "(g) CONsENT DmIDENDS CEDIrr.- For corporation consent divi- dends credit, see section 28." [56 STAT.
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