Carolina watchman. [volume] (Salisbury, N.C.) 1871-1937, 1934-11-30
Levy In State
Faces Changes
Possibility of, l Per Cent
"Gross Receipts" Levy
Comes in For Study

Raleigh.-With practically ali
doubt regarding the retention OF
the states ) per cent sales. tax hav-
ing been removed, members-elect OF
the North Carolina General Assem-
bly, converting here January: 9, as
we'll as Others interested in such
legislation are. turning their -atten-
ton toward a study Of sales tax acts
now on statute books of other
states. 49,. 49,. j .
A compilation just made. shows
half of the nations 4S states now
have in operation some form of a
sales tax and that in all but two
of them it is in the form Of an
emergency measure and subject to
revision or repeal at the next SEES
sions of the several state legislatures.
North Cardinals sales tax, which
exempts from taxation nine basic
food commodities, is virtually GER
tain to undergo changes in the COM
ing session of the legislature. 1t has
not brought in the revenue it was
estimated to bring in and there is
a rather widespread feeling that the
present exemptions will be elimin-
ated in the hope that the collections
will be considerably larger. ,
Chief. objection to the elimination
of the food exemptions. however,
is that it would make the tax more
burdensome on the poor, but ad-
vocates of the exemption plan as
sert that if all exemptions were re-
moved it would make the tax easier
to collect for the merchants as we'll
as the State Revenue department.. It
is said the exemptions have. offered
many loopholes for those who would
like to evade the tax and that many
have evaded it by reason of such
exemptions.
The present state sales tax is n
that day in and day out makes the
public tax conscious. Efforts I'M
doubtedly will be made in the next
legislature to provide a system that
will make the tax less obnoxious if
possible.
1t is reported here on reasonably
good authority that at least three
state senators-elect have spent more
time and effort since the June pri-
maries to develop a sales tax pro-
gram to replace the one now in ef-
feet if it is found the sales tax as a
evenue measure for emergency use
must be retained. The word is out
hat if Governor Ehringhaus, who
has indicated rather strongly he will
ask re-enactment of the sales tax,
makes no definite recommendation
regarding the form of sales tax,
to be put into effect, one or more
of the plans now being studied will
be pushed.
Records show eight states have, or
have had, a tax on gross receipts, or
gross income of all corporations and
all individuals. By virtue of the
levy being spread out, it is argued,
so as to include everybody and every
activity, the rate naturally is much
lower than the ; per cent now in
effect on retail sales to consumers
in North Carolina.
Persons who have been working
On yields and estimates are in agree
ment to a great extent that, if a
gross receipts" measure is adopted
without exemptions, around $12,.-
100000 can be raised on a l per
cent rate. Advocates of such a
plan feel it would serve to bring
about a compromise with the, retail
merchants of the state.
The gross income lax law of
South Dakota, which was enacted
in February, 1888, and which has
a 1 per cent base, also is coming in
for quite a bit or attention. 1t is
said to be painless and non-irritat-
ine'' and the state, which has a po-
~lpulatien Of only $4,000 as COM
pared with North Cardinals $780,
600 or more, is said to be getting an
annual return of about $500 600.
The cost of collection of such a tax
is said to be low.
, Those who have studied this plan
~, &. orf,, ;rnnortant exemptions