Considering the various provisos and exceptions in connection with the general rule of the act, the scope of the application of the method of collecting the tax at the source may perhaps be safely stated thus:  the normal tax is to be deducted (1) from all interest payments made by corporations on bonds and the like, without regard to the amount; (2) from all other interest payments when the amount is more than $3,000 in any one year; (3) from all payments of rents, salaries, or wages amounting in any one case to over $3,000 annually; (4) from all other payments of over $3,000 (excepting dividends) which may be comprised under the designations “premiums, compensations, remuneration, emoluments, or other fixed or determinable gains, profits, or income.”

The principle of assessing income at its source, as applied in this act, does not relieve the individual from the necessity of making a full revelation to the tax officials of his personal income from all sources.  Though this statement needs to be qualified in one or two particulars, the law provides in general that every person subject to the tax and having an income of $3,000 or over shall make a true and accurate return under oath or affirmation “setting forth specifically the gross amount of income from all separate sources and from the total thereof deducting the aggregate items or expenses and allowance” authorized by the law.  Although income from which the tax has been withheld is not included in the net personal and taxable income of the taxpayer, it must, nevertheless, be accounted for and included in his declaration as a part of his gross income, forming one of the specified items which are to be deducted from the gross income in arriving at the income subject to taxation.

As already intimated, the general requirement of the full and complete statement of income is subject to certain exceptions.  One relates to the income from dividends, the law providing that “persons liable to the normal tax only ... shall not be required to make return of the income derived from dividends on the capital stock or from the net earnings of corporations, joint-stock companies or associations, and insurance companies taxable upon their net income.”  It will be noted that this proviso is restricted to persons who are “liable for the normal tax only,” i.e., persons having net incomes under $20,000.  It would seem, therefore, that the taxpayer claiming and securing this privilege must in some way, without revealing the amount received from dividends, satisfy the tax assessors that his total net income, including the dividends (amount not stated), does not exceed $20,000.  Of course a form of statement can easily be devised to cover the situation.  But whether the law will be administered in such a way that this provision affords some relief from the general obligation of making a detailed and complete statement of income remains to be seen.