9.
Obligations Not in Registered Form
Tax is imposed on any person who issues a registration-required obligation not in registered form. The tax is:
-
1% of the principal of the obligation, multiplied by
-
The number of calendar years (or portions of calendar years) during the period starting on the date the obligation was issued
and ending on
the date it matures.
A registration-required obligation
is any obligation other than one that meets any of the following conditions.
-
It is issued by a natural person.
-
It is not of a type offered to the public.
-
It has a maturity (at issue) of not more than 1 year.
-
It can only be issued to a foreign person.
For item (4), if the obligation is not in registered form, the interest on the obligation must be payable only outside the
United States and its
possessions. Also, the obligation must state on its face that any U.S. person who holds it shall be subject to limits under
the U.S. income tax laws.
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