New-York tribune., 1870-09-06
INTERNAL REVENUE MATTERS.

AN IMPORTANT DECISION-WHOLEsALE DEALERS
TO PAY TAX on SALES UNTIL MAY l, 1871
DECISION IN REGARD TO CASTLE LAW IN
REGARD TO DEDUCTIONS FOR INTEREST ON
MORTGAGES.
A decision has recently been made by the
Acting Commissioner Of Internal Revenue that will dis
appoint many especially the merchants Of this city, who
attered themselves that their principal tax would not
be payable after Oct The old law contained the fol-
lowing provision:
wholesale dealers whose snuu s Do not exceed $4,000 sh
81 II excess Of $1,000 t'ey pay and the amount Of al
s s Sn al and S T On sales in excess Of $1,000 shan be a.
and paid moathy other monthly taxes
The new law passed July 49, 1870 repealed the tax on
sales repeal to take effect oct l, lsI0 1t also repealed
the special taxes he technical for license taxes)
the repeal TO take effect May 1s7 The apparent object
OF making the repeal Of Special taxes 10 take effect at
such distant date was that with the exception OF those
imposed on wholesale dealers, wholesale liquor dealers
and cattle brokers, they payable May Of each
year. As the law not passed until July 49, these
special had not been paid for this year. and the de-
sign was that this be the last The qnes
ton arose whether the tax wholesale dealers was
special tax or tax on ses both. If the entire tax
Of $50 and of 81 each 81 OF sales be special tax,
and consequently continued until May l. s71 very
Just dscrminaonha been made against three classes,
viz Wholesale dealers wholesale liquor dealers, and cattle
brokers' All others, shown above, have no license
of the law TO make such Discrimination. rational in
terpretaton would be that the especial tax on whole
sale dealers $50 and that when their sales exceed
$4,000 tho tax paid the excess is tax on SALES
But the Acting Commissioner has decided differently as
OFFICE ov INTERNAL REvESrE }
W H. TnoxrlN ESQ fss,ssor ELreaI Dse E1ston Penn.
SIR re letter of the 18th inst that the additional tar Of
Tr snnum provided paragraph Of the act Of June 80
i.9 i a ,.s ] g oo MI W s a. clo ss 6 E9 9b for example
the sales imposed under the act Of March o. 1905 section
The T6o dealers cattle brokers' ,rohecaes and other special
should be returned assessed and caee roreiy 5
J. W DOUGLAss, Acting Commissioner.
Our merchants, therefore, will he compelled TO pay
this tax until May 157 This is matter OF no small
importance to the large dealers the tax on some OF
them. under this interpretation, between Oct l. $50,
and May 1871 will amount to perhaps 10000 $4,000
The same question has arstn in regard to the tax on
sales The Acting Commissioner decides that 1t is not,
and that the law does not in any way affect the tax
follows:
iunatne made Of coal wholly in part or other
month per feet; the product shall
and not go 600 cubic feet her month 20 cents Der
cents per 600 cubic feet
1t seems in this case, also, legal quibbe to say that
the tax the product and the sales of gas
but costly one 10 consumers as the law authorizes the
fair however to add that the Interpretation was the
intended by the of the law, the Chairman
of the Senate Finance Committee stated during the de
bate that the tax on gas was retained.
The OF allowing dCducOn OF pald
during the year. in making income returns, settled
by the law passed July 13. great deal Of dissatisac
ton was caused by what almost universally cOnsid
cred an unjust ruling this subject. Until the last
assessment the Income tax all money paid out for in
terest during the year. whether mortgage for the
Of money In business, was allowed as deduction.
But in making the last assessment the interest paid
mortgage not allowed the only allowance Of this
nature being for interest paid on money used In the
business OF the person making the return Thus heavy
discrimination made against a person owning
house not fully paid for and two income taxes were
really collected from the same amount, as the tax
had to he paid, without allowance, by the person
owning the mortgage, and again by the holder
OF the mortgage who required 10 include
money received for interest thereon in his estimate OF
income. The new law puts the question at rest how
ever by providing that In addition To other exemptions,
ther shall be deducted the interest paid
during the year and the amount paid labor
cultivate lana or 10 conduct other business
which income Is derived" TIE annual reduction of
the item OF special taxes when the repeal
goes into effect, Will amount To sl064OOO The annual
reduction resulting from the repeal of the tax on sales
will he 81 $4,000 The difference between the revenue
welded by the income tax under the old and the new
laws is estimated at S23,7O0,0O0.
Many people have mistaken idea ia regard 10 the
Stamp checks The new law does not In any way
affect this and two cent stamp be attached 10
ali checks the heretofore. Many have obtained
the idea this tax has been repealed but in this they