Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1915-09-06
MANUFACTURERS
PROTEST TAX


Continued from PAGE One
clare that the attempt OF the Auditor
General to levy tax on them Is an
indirect accusation that they have falsi-
fed their reports to the State. For the
same reason they argue that TO pay the
tax would he a tacit admission on their
part that they have violated the law and
thcir Willingness TO pay the assessment
would be tantamouut 10 purchasing Inn
munity from prosecution for their frregu-
larities
In letters urging the manufacturers TO
pay the Assessment promptly the Auditor
General stated that In cases OF voluntary
payment, the settlement with the firm
would be considered closed by the state
a year after the date when payment was
made. This rule. the manutac cturcts de-
clare, will place a premium ON falsifying
reports to the State and prompt payment
of the tax will give them immunity from
prosecution after the lapse OF year
So far as can be learned the Auditor
General has fixed $1,000 as the arbitrary
amount of capital stock upon which each
manufacturer shall be taxed In every
case which has come to light up to date
the form Of the bill and the amount OF
the tax for each manufacturer has been
the same.
Tomorrow the Pennsylvania Manu-
facturer's Association from its head
issue a special bulletin to all members
OF the association urging them to refuse
to pay the tax and promising that ;he
Auditor Generals action will be tested
Manufacturers say that this is the first
time in the history of the state that
such a tax has been attempted. Some
few have paid after lodging protests and
others are planning to take the matter
into the courts on their own initiative.
In answer to protests that the tax was
| Illegal and unwarranted the Auditor Gem
eral has written to the manufacturers
stating that II they will render him "A
detailed account of every dollar of their
investment, he will take the matter
under advisement"
MANUFACTURERS BULLETIN.
The bulletin which will be issued from
| the headquarters of the Pennsylvania
Manufacturers Association tomorrow fol-
| lows:
| A TAX WHICH SHOULD NOT BE PAID
I'VE are daily receiving inquiries from
| Pennsylvania corporations which have
received from the Auditor General a bill
/ for s., said to be a tax on $1,000 capital as
| sumed not to be engaged in manufaCtur-
/ ing. The Attorney General takes It for
granted that every corporation has at
/ least so much money at work outside of
/ its own business.
"Our counsel has sought in vain for Il
( law or a decision warranting such arbi-
| tTary assessment. The Pennsylvania
statutes provide that capital used ex-
clusively for manufacturing purposes Is
not subject TO taxation.
Firms which comply with this law and
SO specify IN their reports arc advised to
refuse payment of the s. claim. No inter
est will be charged against it until q
! days after receipt of the bill, and then II
| will bear simple interest at the rate o.
| 12 per cent. or only so cents q year-not
a serious matter even though II should
| run on indefinitely.
I'VE can assure our members that the
| Auditor Generals action will not be al.
| lowed to go unquestioned or untested
| The tax is not a large one 1t is true. but
If the Auditor General has a right tc
| guess that every corporation is cheating
| the State in its reports on $1,000 capital
he has an equal right to guess next year
that the taxable capital is $l,O00,OOO in
stead of $1,000.
Also, payment on the smaller sun
without protest might be interpreted as
| Endorsement of an unwarranted hold-up.'
LETTER OF PROTEST.
! One paragraph from a protest letter
from a Philadelphia manufacturer fol
| lows:
las we understand the law, we are ex-
empt from taxation on all assets of this
|
manufacturing of our product, and as We
have no assets of different character
we cannot see that we are liable for thi:
tax, unless the law has been changed"
The reply from the Auditor Genera
follows, in part:
I'VE wish to state that a minimum ap
praisement of $1,000 on account of capita
stock subject TO taxation is made agains
all companies, irrespective of the char
acter of the activities or the amount oi
property invested in the State.
Under the former practice, the passing
of a report without settlement on ac
count of the entire capital stock being
engaged in manufacturing, renders it pos
sibe for the same to be opened and set
tlement made thereon by subsequent Au
ditors General
Under the present practice the settle
ment is closed, except for clerical err
rors, after a year from date of volun
tary payment. We feel that this prac
tice inures to the benefit of the com
pany as well as to the facilitation o
work in this department"
There are approximately 1900 manu-
featuring corporations engaged In thi
State. OF this number 1t is estimated
that 10000 are now exempt from taxation
The action of the Auditor General. 1
successful, would, therefore, mean tina
the State revenue would be increased b!
$4,000 annually