Page 36

TITLE 26-INTERNAL REVENUE CODE § I1. Tax Imposed (a) Corporations in general A tax is hereby imposed for each taxable year on the taxable income of every corporation. The tax shall consist of a normal tax computed under subsection (b) and a surtax computed under subsection (c). (b) Normal tax The normal tax is equal to- (1) in the case of a taxable year ending after December 31, 1977, 22 percent of the taxable income, and (2) in the case of a taxable year ending after December 31, 1974, and before January 1, 1978, the sum of- (A) 20 percent of so much of the taxable income as does not exceed $25,000, plus (B) 22 percent of so much of the taxable income as exceeds $25,000. (c) Surtax The surtax is 26 percent of the amount by which the taxable income exceeds the surtax exemption for the taxable year. (d) Surtax exemption For purposes of this subtitle, the surtax ex- emption for any taxable year is- (1) $25,000 in the case of a taxable year ending after December 31, 1977, or (2) $50,000 in the case of a taxable year ending after December 31, 1974, and before January 1, 1978, except that, with respect to a corporation to which section 1561 (relating to certain multiple tax benefits in the case of certain controlled corporations) applies for the taxable year, the surtax exemption for the taxable year is the amount determined under such section. (e) Exceptions Subsection (a) shall not apply to a corpora- tion subject to a tax imposed by- (1) section 594 (relating to mutual savings banks conducting life insurance business), (2) subchapter L (see. 801 and following, re- lating to insurance companies), or (3) subchapter M (sec. 851 and following, re- lating to regulated investment companies and real estate investment trusts). (f) Foreign corporations In the case of a foreign corporation, the tax imposed by subsection (a) shall apply only as provided by section 882. (Aug. 16, 1954, ch. 736, 68A Stat. 11; Mar. 30, 1955, ch. 18, § 2, 69 Stat. 14; Mar. 29, 1956, ch. 115, § 2, 70 Stat. 66; Mar. 29, 1957, Pub. L. 85-12, § 2, 71 Stat. 9; June 30, 1958, Pub. L. 85-475, § 2, 72 Stat. 259; June 30, 1959, Pub. L. 86-75, § 2, 73 Stat. 157; June 30, 1960, Pub. L. 86-564, title II, § 201, 74 Stat. 290; Sept. 14, 1960, Pub. L. 86- 779, § 10(d), 74 Stat. 1009; June 30, 1961, Pub. L. 87-72, § 2, 75 Stat. 193; June 28, 1962, Pub. L. 87-508, § 2, 76 Stat. 114; June 29, 1963, Pub. L. 88-52, § 2, 77 Stat. 72; Feb. 26, 1964, Pub. L. 88- 272, title I, § 121, 78 Stat. 25; Nov. 13, 1966, Pub. L. 89-809, title I, § 104(b)(2), 80 Stat. 1557; Dec. 30, 1969, Pub. L. 91-172, title IV, § 401(b)(2)(B), 83 Stat. 602; Mar. 29, 1975, Pub. L. 94-12, title III, § 303(a), (b), 89 Stat. 44; Dec. 23, 1975, Pub. L. 94-164, § 4(a)-(c), 89 Stat. 973, 974; Oct. 4, 1976, Pub. L. 94-455, title IX, § 901(a), 90 Stat. 1606.) AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455 reenacted subsec. without change. Subsec. (b). Pub. L. 94-455, among other changes, substituted "December 31, 1977, 22 percent" for "De- cember 31, 1976, 22 percent" and "after December 31, 1974 and before January 1, 1978" for "after December 31, 1974 and before January 1, 1977" and struck out provisions relating to the six-month application of the general rule. Subsec. (c). Pub. L. 94-455 struck out provisions re- lating to the special rule for 1976 for calendar year taxpayers. Subsec. (d). Pub. L. 94-455, among other changes, substituted provisions relating to surtax exemption of $25,000 for a taxable year ending Dec. 31, 1977, or $50,000 for a taxable year ending after Dec. 31, 1974, and before Jan. 1, 1978, for provisions relating to surtax exemption of $50,000 for any taxable year and struck out provisions relating to six-month application of the general rule. 1975-Subsec. (b). Pub. L. 94-164 redesignated exist- ing pars. (1) and (2) as pars. (1)(A) and (1)(B), and in par. (1)(A) as so redesignated substituted "after De- cember 31, 1976" for "before January 1, 1975 or after December 31, 1975", and in par. (1)(B) as so redesig- nated substituted "January 1, 1977" for "January 1, 1976", and added par. (2). Pub. L. 94-12, § 303(a), reduced the normal tax for a taxable year ending after Dec. 31, 1974, and before Jan. 1, 1976, to 20 percent of so much of the taxable income as does not exceed $25,000 plus 22 percent of so much of the taxable income as exceeds $25,000. Subsec. (c). Pub. L. 94-164 designated existing provi- .ions as par. (1) and in par. (1) as so designated struck out special percentages for taxable years beginning before Jan. 1, 1,64, and after Dec. 31, 1963 and before Jan. 1, 1965,' ad added par. (2). Subsec. ',,j. Pub. L. 94-164 designated existing provi- sions as r,&r. (1), and in par. (1) as so designated, sub- stitute'1 "$50,000" for "$25,000", added reference to section 1564 of this title, and added par. (2). Pu'j. L. 94-12, § 303(b), substituted "$50,000" for "$25,000". 1969-Subsec. (d). Pub. L. 91-172 substituted "sec- tion 1561 or 1564" for "section 1561". 1966-Subsec. (e. Pub. L. 89-809, § 104(b)(2)(A), struck out par. (4) which made reference to section 881(a) (relating to foreign corporations not engaged in business in United States). Subsec. (f). Pub. L. 89-809, § 104(b)(2)(B), added subsec. (f). 1964-Subsec. (b). Pub. L. 88-272 applied the 30 per- cent tax to years beginning before Jan. 1, 1964 instead of July 1, 1964 in par. (1), and in par. (2), reduced the rate from 25 percent to 22 percent, and applied it to years beginning after Dec. 31, 1963, Instead of June 30, 1964. Subsec. (c). Pub. L. 88-272 increased the percentage from 22 to 28 for taxable years beginning after Dec. 31, 1963, and before Jan. 1, 1965, and to 26 percent for taxable years beginning after Dec. 31, 1964. The surtax exemption previously carried in subsec. (c), is now stated in subsec. (d). Subsec. (d). Pub. L. 88-272 added subsec. (d). Former subsec. (d) redesignated (e). Subsec. (e). Pub. L. 88-272 redesignated former subsec. (d) as (e). 1963-Subsec. (b). Pub. L. 88-52 substituted "July 1, 1964" for "July 1, 1963" and "June 30, 1964" for "June 30, 1963", wherever appearing. 1962-Subsec. (b). Pub. L. 87-508 substituted "July 1, 1963" for "July 1, 1962" and "June 30, 1963" for "June 30, 1962", wherever appearing. 1961-Subsec. (b). Pub. L. 87-72 substituted "July 1, 1962" for "July 1, 1961" and "June 30, 1962". for "June 30, 1961", wherever appearing. Page 36