Evening star., 1932-01-31
GASOLINE BOOTLEGGING HELD
A NEW PR OFITABLE RACKET
Methods of States in Collecting Gas Taxes
Said to Be Responsible for Dishonest
Road to Fortune.

| lima, the rate is and remains at that
level through South Carolina and
Georgia. When he finally arrives in
tax for his pains.
Now then, of course, you ask how
this racket is worked. After alls the
tax on gasoline in Illinois is only three
cents gallon and a man will never
get very rich evading that. You will
soon see that the sums which can be
made make this singularly attractive
business for an up-and draCketeering
young man.
The gasoline tax is imposed by the
States, though some cities also try their
hand at it and this tendency is grow
ing. The tax is of course, paid by the
man who uses gasoline in his auto
mobile. He pays it to the gasoline
filling station. Sometimes the filling
station advertiSes its gasoline at the
price of gas and specifically names the
tax. Thus in Oklahoma it is not un-
common to see signs reading, Case
line cents and we must have another
5 cents for Gov Bill"-Bill being no
less parsonage than the famous "Alfal
ia William" who stopped oil produC
tlon in his State with the militia. Most
gasoline stations merely add the tax
TO the price which they charge for gas
In any case every time you buy a gall
Ion of gasoline you hand over from 2
to cents for the State.
Government Methods.
Now then how does the Government
get this tax? In some States the re-
tail gasoline filling station pays it over
directly to the tax collector Every
month or every three or four months
he must make a report to the tax
gatherer Of the number Of gallons he
has sold and send his check along for
this amount. This was the universal way
formerly. Now, however, most States
collect the tax from the distributor or
refiner or whoever makes the first sale
in the State. The distributor adds
the tax to the price charged the filling
station and the filling-station man COL
lectS 1t from the consumer. With this
explanation we are prepared to have
a look at the racket in motion.
Now let us take the States of Illinois
and Indiana, which adjoin each other
There are plenty of refinerieS in In
diana. A distributor with a tank truck
goes into Indiana and buys a tank load
of gaSoline-Say 1900 gallons. When he
buys this, ordinarily he would have to
pay cents tax to the distributor. But
he makes declaration that the gaSo-
line is for eXport-that is, sale in an
other State-Which automatically re-
lleveS it OF the tax. He then drives the
gasoline into Illinois. There he sells
it to a gasoline station. In Illinois the
tax is 3 cents on each gallon. He
takes the filling g-Station man into his
confidence and explains that the gas
has been bought without paying taxes;
that the filling station man can sell
1t and collect the tax from his Gus
toners and put it into his pocket
AS rule, however, the tWo-filling-
station man and bootlegger-can split
the tax between them on some basis
considered to be fair between gentle
men. Neither Indiana nor Illinois gets
the tax. And, what is more serious,
the filling station handling the gas,
because it has an advantage of 3 cents
over its competitors, can underSell them
and thus commit crime against the
honest gas dealer
This practice goes on to a greater
or lesser degree in almost every State
in the Union. Down in Louisiana, for
instance, j. T. O'Sullivan. executive
secretary Of the Louisiana Code Com
mittee, says: AT almost any hour of
the night tank trucks and trailerS may
be seen moving along the dark roads
which run into Shreveport from East
Texas. Some of these trucks haul as
much as $500 gallons of gasoline Is
it rot peculiar that most of the gaSo-
line should enter Shreveport after dark
between pm. and 4 am? The rea-
son given for this is that traffic is
lighter during the night and because
the trucks are needed for local dis
tribution during the daytime But it
is a very strange thing that these same
trucks which enter Shreveport under
cover OF the darkness full of gasoline
go out again the next day back to
Texas through the heavy day traffic
and when they are supposed to be
needed in local distribution. The truth
about the matter is that these trucks
move at night to escape the inspectors,
and this gas coming into Shreveport.
without paying tax in either Texas or
Louisiana. has demoralized the honest
gasoline industry of the State"
Boats Used.
In Pennsylvania the racket Is carried
on in places by water. The Delaware
River runs between Pennsylvania and
New Jersey. The racketeer buys a
boatload of gasoline in Pennsylvania
for export to New Jersey" Thus no
tax is paid. His boat-minus the
warning flag which it should fiy-ioatS
up or down the Delaware, oStensibly
bound for some New Jersey port. But
Pennsylvania Is on one side of that
same river and there is nothing to
stop the vessel from putting into