(b) Banks, trust companies, building and loan associations, insurance companies, companies which guarantee the fidelity of any individual or individuals, such as bonding companies, and companies which furnish abstracts of title or which insure titles to real estate, all of which pay taxes on their gross earnings, gross premiums, or gross receipts under existing laws of the District.

(c) Any foreign corporation authorized to invest in loans secured by real estate, which does not maintain any office, officer, agent, representative, or employees for the purpose of making, maintaining, or liquidating such investments, in the District of Columbia, provided that the only activities of such foreign corporation in the District of Columbia, other than those of a liaison employee are one or more of the following:

(1) the acquisition of loans (including the negotiation thereof) secured by mortgages or deeds of trust on real property, including leaseholds, situated in the District of Columbia pursuant to commitment agreements or arrangements made prior to or following the organization or creation of such loans: Provided, however, That nothing herein shall be deemed to permit servicing other than as permitted by paragraph (4) of this subsection;

(2) the physical inspection and appraisal of property in the District of Columbia as security for mortgages or deed of trust;

(3) the ownership, modification, renewal, extension, transfer, or foreclosure of such loans, or the acceptance of substitute additional obligors thereon; (4) the making, collecting, and servicing of loans solely through a person authorized to engage in the District of Columbia in the business of servicing real estate loans for investors;

(5) maintaining or defending any action or suit or any administrative or arbitration proceeding arising as a result of such loans;

(6) the acquisition of title to property which is the security for such a loan in the event of default on such loan, either by foreclosure, sale, or agreement in lieu thereof;

(7) pending liquidation of its investment within such period, not to exceed one year, as the Council may by regulation prescribe, operating, maintaining, renting or otherwise dealing with, selling or disposing of, real property acquired by foreclosure, sale, or by agreement in lieu thereof: Provided, That if, upon the expiration of the period prescribed by the Council such property has not been sold or otherwise disposed of, such foreign corporation shall be subject to tax on the portion of its taxable income derived from its ownership of such property, but such liability shall not be construed as affecting the exemption from tax provided herein for the portion of its taxable income derived from other loans made or acquired by it in accordance with this paragraph, unless the corporation chooses not to liquidate the property but holds it for investment purposes.

Income derived from the ownership of real property and not subject to tax as provided in this paragraph shall be reported to the Commissioner by the person servicing the corporation's loans in the District of Columbia or by a participating bank in the District of Columbia at such times and in such manner, together with such information, as the Council may by regulation require, and if there be no such person servicing loans or participating bank, then the corporation shall itself make such report of income including any other income derived from District of Columbia sources which is subject to tax under this article. Any person or corporation who shall fail to report such income to the Commissioner, as herein provided, shall be guilty of a misdemeanor and shall be fined not more than $500.

As used herein, the term "liaison employee" shall mean a person who does not engage in or make, maintain, or liquidate any investment of the foreign corporation and who is engaged by the foreign corporation solely for the purpose of establishing and maintaining contracts with governments and international bodies and agencies thereof; arranging conferences for, receiving and furnishing legislative publications and other information or material of interest to, transmitting information for, and arranging transportation or other accommodations for, officers or other personnel of such foreign corporation within, or to and from, the District of Columbia.

TITLE III-REPORTING PERIODS; TAX CREDIT PERIODS; FEDERAL CONFORMITY

SEC. 301. REPORTING PERIODS.-Every person required to file a District income tax return shall file the return for the same taxable year as required for Federal income tax purposes.

SEC. 302. TAX CREDIT PERIODS.-The tax credits allowed under this article against the District income tax shall be allowed on the District return for the taxable year to which such credits pertain unless otherwise indicated by this article.

SEC. 303. FEDERAL CONFORMITY. (a) If for the taxable year a husband and wife file separate Federal returns, they shall file separate District returns for the taxable year and their District income tax liabilities shall be separate.

(b) If a husband and wife file a joint Federal income tax terurn, the District income tax return shall be filed in their joint names notwithstanding that either or both of the spouses may have been a nonresident of the District for all or part of the taxable year.

(c) The liability of a husband and wife filing a joint District income tax return shall be joint and several, except that if one of the spouses is a nonresident without income subject to the District income tax, then the resident or nonresident spouse having income subject to District tax shall be liable for the tax.

TITLE IV-RETURNS

SEC. 401. (a) FORM OF RETURNS.-The Commissioner is hereby authorized and directed to prescribe the forms of return. All returns required under this title shall be filed on the forms and in the manner prescribed by the Commissioner.

(b) TAXPAYER TO MAKE RETURN WHETHER OR NOT FORM IS SENT.-Blank forms of returns of income shall be supplied by the Commissioner. It shall be the duty of the Commissioner to obtain an income-tax return from every taxpayer who is liable under this article to file such return; but this duty shall in no manner diminish the obligation of the taxpayer to file a return without being called upon to do so.

(c) INFORMATION RETURNS.-Every person subject to the jurisdiction of the District in whatever capacity acting, including, but not limited to, receivers or mortgagors of real or personal property, fiduciaries, partnerships, and employers making payment of dividends, interest, rent, premiums, annuities, compensations, remunerations, emoluments, or other income to any person subject to tax under this article, shall render such returns thereof to the Commissioner as he may prescribe.

SEC. 402. REQUIREMENTS FOR FILING RETURNS.-Each of the following persons shall file a return for each taxable year stating such information as the Commissioner shall deem necessary to reflect accurately the taxes required to be paid under this article;

(a) Every resident, part-year resident, and nonresident, as defined in title I of this section, who is required to file a return for Federal income tax purposes and who has earned or received District income in any taxable year, as defined in section 503 of title V of this article.

(b) FIDUCIARIES.-(1) Every fiduciary for every resident estate and resident trust for which he acts and for which a return is required to be filed for Federal income tax purposes.

(2) Every fiduciary for every nonresident estate and nonresident trust for which he acts and for which a return is required to be filed for Federal income tax purposes and whose taxable income consists in whole or in part of District income as defined in section 503 of title V of this article. A return filed with the Commissioner by one of two or more joint fiduciaries filed with the Commissioner shall be sufficient compliance with the provisions of this subsection.

(c) CORPORATIONS.-Every corporation engaging in or carrying on any trade or business within the District or otherwise receiving income from District sources within the meaning of section 602 of title VI of this article, and every organization exempted under section 201 of title II of this article having unrelated business income subject to the Federal income tax. If receivers, trustees in bankruptcy or assignees operate the property or engage in or carry on the trade or business of corporations, such receivers, trustees or assignees shall make returns for such corporations in the same manner and form as corporations.

(1) AFFILIATED CORPORATIONS.- -Affiliated corporations shall file separate returns unless permitted or required by the Commissioner to file consolidated returns.

(d) TAXPAYER UNABLE TO MAKE OWN RETURN.-If the taxpayer is unable to make his own return for any taxable period, it shall be made and filed by a person or persons authorized or required to make and file the taxpayer's Federal return for such taxable period.

SEC. 403. (a) TIME AND PLACE FOR FILING RETURN.-(1) Except as provided in subsection (b) of this section, all income tax returns required to be filed under this article shall be filed with the Commissioner on or before the date prescribed for the filing of the taxpayer's Federal income tax return (without regard to any Federal extension).

(2) The provisions of the International Revenue Code relating to the treatment of timely mailed returns or other documents as being timely filed shall apply to returns or other documents required to be filed under the provisions of this article. (b) EXTENSION OF TIME.-The Commissioner is authorized to grant reasonable extensions of time for the filing of any returns, declarations, reports, or other documents required by this article.

(c) PERIOD COVERED BY RETURNS OR OTHER DOCUMENTS.-Where not otherwise provided for in this article, the Commissioner may prescribe the period of which, or the date as of which, any return or other document required by this article or by regulations shall be made and filed.

(d) IDENTIFYING NUMBERS.-Any person required under the authority of this article to make a return, statement, or other document, on his own behalf or on behalf of any other person, shall include in such return, statement, or other docu-ment, such identifying number as may be prescribed by the Commissioner for securing proper identification of such person or other perions.

(e) WHOLE DOLLAR AMOUNTS.-The provisions of the Internal Revenue Code relating to the use of whole dollar amounts for any amounts required to be shown on any Federal return or other document shall apply with respect to amounts required to be shown on any return or other document required to be filed under this article.

SEC. 404. (a) SECRECY OF RETURNS.-Except to any official of the District having a right thereto in his official capacity, it shall be unlawful for any officer or employee of the District, or any other person under contract with the District for the purpose of processing in any manner any statements, reports, or returns filed under this article (including any employee of such other person), to divulge or make known in any manner the amount of income or any particulars relating thereto or the computation thereof set forth or disclosed in any return, report, or statement required to be filed under this article, or obtained from the Government of the United States, or from any State, territory, possession, or political subdivision thereof, and neither the original nor a copy of any such return desired for use in litigation in court shall be furnished where neither the District nor the United States is interested in the result of such litigation, whether or not the request is contained in an order of the court: Provided, however, That nothing herein contained shall be construed to prevent the furnishing to a taxpayer of a copy of his return upon the payment of a charge to be established by the Commissioner to defray the cost thereof, or the procuring by contract of the services of persons other than officers and employees of the District for the purpose of processing statements, reports, and returns filed under this article if the Commissioner, in his discretion, determines that such processing is necessary or required for the carrying out of the intents and purposes of this article.

(b) RECIPROCAL EXCHANGE OF INFORMATION WITH THE UNITED STATES AND THE SEVERAL STATES.-Notwithstanding the provisions of this section, the Commissioner may permit the proper officer of the United States or of any State imposing an income tax or his authorized representative to inspect income tax returns filed with the Commissioner or may furnish to such officer or representative a copy of any such income tax returns provided the United States or such State grant substantially similar privileges to the Commissioner or his representative or to the proper officer of the District charged with the administration of this title. The Internal Revenue Service of the Treasury Department of the United States is authorized and required to supply such information as may be requested by the Commissioner relative to any person subject to the taxes imposed by this article.

(c) PUBLICATION OF STATISTICs.-Nothing contained in section 404 (a) of this title shall be construed to prohibit the publication of statistics so classified as to prevent the identification of particular reports and the items thereof, or the publication of delinquent lists showing the names of taxpayers who have failed to pay their taxes at the time and in the manner provided by law, together with any relevant information which in the opinion of the Commissioner may assist in the collection of such delinquent taxes.

(d) INFORMATION WHICH MAY BE DISCLOSED.-Nothing contained in section 404(a) of this title shall be construed to prohibit the Commissioner, in his discretion,

from divulging or making known any information contained in, or relating to, any report, statement, application or return required under the provisions of this article other than such information as may be contained therein relating to the amount of income or any particulars relating thereto or the computation thereof. (e) PENALTY FOR VIOLATION OF THIS SECTION.-Any person who willfully violates any provision of this section shall be guilty of a misdemeanor and shall be punishable by a fine not exceeding $1,000 or imprisonment for one year, or both, in the discretion of the court. All prosecutions under this section shall be brought in the Superior Court of the District of Columbia on information by the Corporation Counsel of the District of Columbia or any of his assistants in the name of the District of Columbia.

TITLE V-IMPOSITION AND RATES OF TAX: TAX CREDITS

SEC. 501. PURPOSE.-(a) This article is intended to conform the District income taxes with the United States Internal Revenue Code, except as otherwise expressly provided, in order to simplify the taxpayer's filing of returns, reduce the taxpayer's accounting burdens, and facilitate the collection and administration of these taxes. (b) It is intended that individuals, estates, and trusts shall be taxed for the taxable year only upon their District income, as defined in section 503 of title V of this article, but that the rate at which the District income of any taxpayer is taxed under this article shall reflect the taxpayer's ability to pay as measured by his adjusted gross income for the taxable year, or, in the case of estates and trusts, gross income for the taxable year.

SEC. 502. TAX INCOME OF INDIVIDUALS, ESTATES, AND TRUSTS.-A tax is imposed for each calendar year or fiscal year ending during that calendar year upon the District income earned or received in that taxable year by every individual, estate, and trust, and shall be measured as follows:

The tax so measured shall he reduced by a percentage equal to the percentage of the taxpaper's adjusted gross income (gross income in the case of estates and trusts) for the taxable year which is not District income, as defined in section 503 of this title.

SEC. 503. The words "District income", as applied to individuals, estates and trusts, mean

(1) for full year residents, the Federal adjusted gross income of the taxpayer for such taxable year;

(2) for a resident estate or resident trust, the gross income of the estate or trust for Federal income tax purposes for such taxable year;

(3) for nonresident individuals, nonresident estates or nonresident trusts: the sum of the following items of income to the extent they are required to be included in the adjusted gross income of an individual or the gross income of an estate or trust for Federal income tax purposes for the taxable year: (a) rents and royalties derived from any interest in property located within the District, and any income derived from the termination of such interest;

(b) gains from the sale or exchange of real and tangible personal property located within the District;

(c) wages, salaries, commissions or other income received or accrued for services performed within the District; and

(d) income derived from every trade or business of the taxpayer (whether conducted as a sole proprietor, partnership, or by any other entity), to the extent that the income is fairly attributable to the trade or business engaged in or carried on within the District,

or is otherwise from District sources, as determined under regulations prescribed by the Council.

(4) for part-year resident individuals or part-year resident trusts, the sum of

(a) all items of income constituting District income earned or received by a resident individual under paragraph (1) of this section, or earned

or received by a resident trust under paragraph (2) of this section, during the portion of the taxable year the taxpayer qualified as a resident of the District, and

(b) all items of income constituting District income earned or received by a nonresident individual or nonresident trust during the portion of the taxable year the taxpayer was a nonresident of the District.

(5) the "District income" determined under this definition shall be adjusted as provided in title VI of this article.

The words "resident trust" mean a trust created by an individual who, at the time of the creation of the trust, was domiciled in the District; a trust consisting of property of an individual who is domiciled in the District, for the portion of the taxable year the individual is so domiciled in the District; a trust created by a decedent who, at time of death, was domiciled in the District; and a trust resulting from dissolution of a corporation organized under the laws of the District. The words "nonresident trust" mean, for any taxable year, a trust not qualifying as a "resident trust" for any part of the taxable year. The residence or situs of the fiduciary shall not control the classification of a trust as resident or nonresident.

SEC. 504. TAX CREDITS ALLOWED INDIVIDUALS, TRUSTS, AND ESTATES.—The District income tax as determined under this title for individuals, trusts, and estates shall be reduced by the following tax credits, to the extent applicable to the taxpayer:

(1) CREDIT ALLOWED RESIDENT INDIVIDUALS, TRUSTS, AND ESTATES-INCOME TAX PAID TO OTHER JURISDICTIONS.-A resident, resident trust, or resident estate shall receive credit against the tax imposed by this article, for income taxes required to be paid and paid to any State, territory, or possession of the United States upon his income derived from sources within that State, territory, or possession for the portion of the taxable year that the taxpayer was a resident, resident trust, or resident estate; Provided, however, That income taxes required to be paid, and paid on behalf of a political subdivision of such State, territory, or possession of the United States as a locally imposed levy shall not be allowed as a credit against the tax imposed by this article: And provided further, That the credit allowed under this paragraph shall not exceed the income tax otherwise payable to the District before allowance of the credit. The Commissioner may require satisfactory proof of payment to other jurisdictions of the taxes for which credit shall be allowed under this subsection.

(2) CREDIT ALLOWED RESIDENTS AND NONRESIDENTS-Tax WITHHELD OR PAID BY DECLARATION.-The amount deducted and withheld as tax under this article during any calendar year, and any amounts paid for the taxable year by declaration of estimated District income tax, shall be allowed as a credit against the tax imposed by this article, for taxable years beginning in such calendar year. If more than one taxable year begins in such calendar year, such amount shall be allowed as a credit against the tax for the last taxable year so beginning.

(3) CREDIT ALLOWED FULL YEAR RESIDENTS ONLY-SALES TAX PAID.-For the purpose of providing relief to certain low-income residents of the District for sales tax paid on purchases of groceries, there shall be allowed to a full year resident a credit against the District income tax (if any) imposed by this article in an amount determined in accordance with the sales tax credit table. To be entitled to this credit such resident must have maintained a place of abode within the District for the full twelve months of the taxable year, and must file a District income tax return, or such other return as the Commissioner may prescribe, whether or not such individual is otherwise required to file the District return. To obtain this credit, an individual who is required to file a return under this article must file the return within the time prescribed, or as extended by the Commissioner Any full year resident who is not required to file an income tax return, under this article, must file a return, report, or statement as prescribed by the Commissioner not later than the fifteenth day of the fourth month following the close of the calendar year to which the credit applies.