excess profits tax

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Excess profits tax

Additional federal taxes placed on the earnings of a business, used only in time of national emergency such as war.

Excess Profits Tax

A tax imposed on a company's profits over a certain amount. Excess profit taxes are imposed in order to generate more revenue for the government, especially during national emergencies. In the United States, excess profit taxes have been implemented during wartime. There are also periodic debates on whether to impose an excess profit tax on private industries thought to be necessary for consumers in order to discourage profiteering or price gouging. Particularly, oil and gas companies have been targeted for this form of the excess profit tax. See also: Windfall Tax.

excess profits tax

A temporary tax levied on business profits during a period of national emergency. For example, the federal government may levy an additional corporate income tax during wartime to generate extra government revenues.
References in periodicals archive ?
901, which specifically restricts the foreign tax credit to foreign "income, war profits, and excess profits taxes.
Applying the gross receipts test so rigidly merely reaffirms the concerns McLure and Zodrow raised more than a decade ago when they pointed Out: "Since the structures of income and excess profits taxes are inherently different, these differences should be taken into account explicitly in the regulations.
Those cases involved the issue of interest on a "potential deficiency" in World War II excess profits taxes that was eliminated by a determination of entitlement to use a constructive average base period net income under section 722 of the Internal Revenue Code of 1939.
254 (1955), involving a "potential deficiency" in World War II excess profits taxes that was eliminated by a determination that the taxpayer was entitled to use a constructive average base period net income under section 722 of the 1939 Code to determine what was the amount of "excess profits" subject to the tax.
The general ones, such as the excess profits taxes or the separate tax on capital gains (which could have reduced the rates), and the ones applying to significant classes of taxpayers, such as "personal holding companies" or "personal service corporations," are noted in the table.
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