Public Law 74–812

That section 3 (b) of an Act entitled “An Act to establish the composition of the United States Navy with respect to the categories of vessels limited by the treaties signed at Washington, February 6, 1922, and at London, April 22, 1930, at the limits prescribed by those treaties; to authorize the construction of certain naval vessels; and for other purposes”, approved March 27, 1934 (48 Stat. 505), is hereby amended by striking out the word “price” and inserting the words “prices, of such contracts within the scope of this section as are completed by the particular contracting party within the income-taxable year”, after the words “of the total contract”; by inserting the words “but the surety under such contracts shall not be liable for the payment of such excess profit: Provided, That if there is a net loss on all such contracts or subcontracts completed by the particular contractor or subcontractor within any income-taxable year, such net loss shall be allowed as a credit in determining the excess profit, if any, for the next succeeding income-taxable year:” after the words “property of the United States”; by inserting the word “further” after the word “Provided”; by deleting the word “may” after the words “the Secretary of the Treasury” and substituting therefor the word “shall”; and by adding at the end of the section the following proviso: “Provided further, That all provisions of law (including penalties) applicable with respect to the taxes imposed by Title I of the Revenue Act of 1934, and not inconsistent with this section, shall be applicable with respect to the assessment, collection, or payment of excess profits to the Treasury as provided by this section, and to refunds by the Treasury of overpayments of excess profits into the Treasury: And provided further, That this section shall not apply to contracts or subcontracts for scientific equipment used for communication, target detection, navigation, and fire control as may be so designated by the Secretary of the Navy, and the Secretary of the Navy shall report annually to the Congress the names of such contractors and subcontractors affected by this provision, together with the applicable contracts and the amounts thereof.” so that as amended said section 3 (b) will read as follows:

“Sec. 3.

(b)(b)

To pay into the Treasury profit, as hereinafter provided shall be determined by the Treasury Department, in excess

Computation.

of 10 per centum of the total contract prices, of such contracts within the scope of this section as are completed by the particular contracting party within the income taxable year, such amount to

Surety’s liability on performance bonds.

become the property of the United States, but the surety under such contracts shall not be liable for the payment of such excess

Proviso.

Credit for loss in next succeeding year.

profit: Provided, That if there is a net loss on all such contracts or subcontracts completed by the particular contractor or subcontractor within any income taxable year, such net loss shall be allowed as a credit in determining the excess profit, if any, for the next succeeding income taxable year: Provided further, That

Collections, if not voluntarily paid.

if such amount is not voluntarily paid the Secretary of the Treasury shall collect the same under the usual methods employed under the internal-revenue laws to collect Federal income taxes: Provided further, That all provisions of law (including penalties)

Provisions for collecting excess profits and refunds of overpayments.

Vol. 48, p. 683.

applicable with respect to the taxes imposed by Title I of the Revenue Act of 1934, and not inconsistent with this section, shall be applicable with respect to the assessment, collection, or payment of excess profits to the Treasury as provided by this section, and to refunds by the Treasury of overpayments of excess profits into the Treasury: And provided further, That this section shall not

Specific exemptions.

apply to contracts or subcontracts for scientific equipment used for communication, target detection, navigation, and fire control as may be so designated by the Secretary of the Navy, and the Secretary

Annual reports to Congress.

of the Navy shall report annually to the Congress the names of such contractors and subcontractors affected by this provision, together with the applicable contracts and the amounts thereof: And provided further, That the income-taxable years shall be such

Effective dates.

taxable years beginning after December 31, 1935, except that the above provisos relating to the assessment, collection, payment, or refunding of excess profit to or by the Treasury shall be retroactive to March 27, 1934.”

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