CHAPTER 574

AN ACT to amend the Code of 1950 by adding a section numbered
58-81.1 relating to the deduction of charitable and other con-
tributions by corporations,

[S 226]

Approved April 1], 1950

Be it enacted by the General Assembly of Virginia:

1. That the Code of 1950 be amended by adding a section num-
bered 58-81.1, the new section being as follows:

§ 58-81.1. Charitable and other contributions by corporations.—
In the case of a corporation, or a cooperative association or co-
operative farm produce marketing association organized under the
provisions of Chapters 14 and 15, Title 138 of the Code of Virginia
of 1950, contributions or gifts payment of which is made within
the taxable year to or for the use of:

(1) The United States, any State, Territory, or any political
subdivision thereof or the District of Columbia, or any possession
of the United States, for exclusively public purposes;

(2) A corporation, trust, or community chest, fund, or founda-
tion, created or organized in the United States or in any possession
thereof or under the law of the United States, or of any State or
Territory, or of the District of Columbia, or of any possession of
the United States, organized and operated exclusively for religious,
~haritable, scientific, veteran rehabilitation service, literary, or
-ducational purposes or for the prevention of cruelty to children
‘but only if such contributions or gifts are to be used within the
Jnited States or any of its possessions exclusively for such pur-
poses), no part of the net earnings of which inures to the benefit
f any private shareholder or individual, and no substantial part
f the activities of which is carrying on propaganda, or otherwise
ttempting to influence legislation; or

(3) Posts or organizations of war veterans, or auxiliary units
f, or trusts or foundations for, any such posts or organizations,
f such posts, organizations, units, trusts, or foundations are or-
anized in the United States or any of its possessions, and if no
part of their net earnings inure to the benefit of any private share-
holder or individual; to an amount which, in the case of a corpora-
tion, does not exceed five per centum of the taxpayer’s net income
as computed without the benefits of this section; to an amount
which, in the case of a cooperative association or cooperative farm
produce marketing association does not exceed five per centum of
the savings or earnings of such association available for distribu-
tion to its members and patrons. Such contributions or gifts shall
be allowable as deductions only if verified under rules and regula-
tions prescribed by the Department of Taxation.

In the case of a corporation reporting its net income on the
accrual basis, at the election of the taxpayer any contribution or
gift payment of which is made after the close of the taxable year
and on or before the fifteenth day of the third month following
the close of such year shall, for the purposes of this section, be
considered as paid during such taxable year if, during such year,
the board of directors authorized such contribution or gift. Such
election shall be made only at the time of the filing of the return
for the taxable year, and shall be signified in such manner as the
Department of Taxation shall by rules and regulations prescribe.
2. This act shall be in force for the taxable year nineteen hundred
fifty, and for every taxable year thereafter until otherwise provided
by law.