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3. ASSESSMENT OF TAX.

With regard to the assessment of the tax, the tax is upon “net income”, meaning “gross income less allowable deductions”. Gross income includes the gross amount of any kind of income from any source whatever. Allowable deductions include dividends from corporations, which are deductible by the stockholder on his personal return, provided that the corporation has paid a tax on 50 per cent or more of its income to Wisconsin.

In the case of business enterprises, assessment is based upon the amount of income less expenses incurred in the production of that income. At present, the tax is computed on the average net income of the three years preceding that in which the tax is assessed. Beginning in 1933, the tax is to be levied on the income of the preceding year. The 1933 tax may be levied on the untaxed income of 1930 and 1931 if that amount is greater than the income of 1932. Starting with the income year 1933, a business loss may be carried forward to the next year, and, if not completely offset, the balance may be carried forward to the year following.

Individuals are allowed credits against the tax in respect of their personal exemptions. The amounts are $8 for a single individual, $17.50 in the case of a married person or head of a family and $4 for each child or dependent.

The rates are progressive and range, for individuals, from 1 per cent on the first $1,000 to 7 per cent in the case of incomes in excess of $12,000; and for corporations, from 2 per cent on the first $1,000 to 6 per cent on amounts in excess of $6,000.

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