Capital stock and excess-profits taxes;

              TOUCHE, NIVEN & CO. TAX BULLETIN NO. T-172
CAPITAL STOCK AND EXCESS-PROFITS TAXES
The federal capital stock tax returns for the year ended June 30, 1936, which are due for filing on or before July 31, 1936, are returns of the tax imposed by the Revenue Act of 1935 Section 105), as amended by the Revenue Act of 1936 (Section 401). The latter Act does not impose any capital stock tax itself, but merely amends Section 105 of the former Act to reduce the tax rate from $1.40 to $1.00 per $1,000.00 of declared value and to make refer-ences, where required, to the income tax provisions of the Revenue Act of 1936. It should be noted that, as the 1935 Act capital stock tax provisions are first applicable for the year ended June 30, 1936, they were never effective prior to amendment by the 1936 Act. Accordingly, no tax has been, or will be, payable at the rate of $1.40 per $1,000,00 of declared value.
Form 707 (1936 return of capital stock tax for year ended June 30, 1936) has not yet been changed to give effect to the $1.00 rate. However, collectors have been directing taxpayers to cross out the $1.40 rate on line 11 of Form 707 and to substitute the rate of $1.00.
Apart from the ineffective increase in tax rate, the capital stock tax provisions of the 1935 Act are almost exactly the same as those contained in the Revenue Act of 1934. The only difference is the omission of any provision corresponding to Section 701(3) and (4) of the 1934 Act, which exempted corporations which did not do business during any part of the period from the date of enactment of the 1934 Act to June 30, 1934. The effect of this omission is to make all corporations which carried on business during any part of the year ended June 30, 1936, subject