Evening star., 1938-04-14
By J. A. OLEARY,

BY J. A. OLEARY.
The Senate District Committee gave
tentative approval today to a revamped
business privilege tax, with a grad
uated scale Of rates. and the following
other important changes in this years
law:
The exemption is lowered from
$4,000 to $1,000.
Repeal of the deduction now allowed
for tangible personal tax payments in
computing the gross receipts tax.
A clarifying provision to apply the
gross receipts tax to rentals from real
and personal property District off,
clsls explained this will take in rentals
from houses, whereas this year the tax
was held to apply only to apartments.
A new definition specifically apply
ing the tax to all persons conducting
or operating business in commerce,
interstate or otherwise.
New Rate Schedule.
In place of the fat rate Of two
fitths of l per cent in the present
law, the new schedule ranges from
one-tenth to four-tenths of / per
cent, depending on the spread be-
tween purchase and sale prices.
The committee adjourned at noon
to give District officials additional
time to perfect the language of the
changes tentatively accepted. Chair
man King said he would call the COM
mittee together to take formal action
as soon as the city officials have the
draft completed. probably tomorrow.
All day yesterday the committee
debated other means of bringing the
House bill up to the city's revenue
need of about s4,500000. The esti-
mated revenue was decreased by ST.
100000 when the House killed the
income tax Monday. After becoming
convinced that either sales tax or
+ a revived income tax would face
stormy journey through the remain-
ing stages of enactment. the commits
tee turned to a revision of the gross
receipts tax.
Tydings Goes Along.
Discussing the tentative decision to-
doSi JNilatDi DNhlOSlot, Va
Maryland, a leading opponent of the
gross receipts tax. said:
1T is an unfortunate form OF tax,
but my present disposition is not to
try to upset the work of the commit
tee"
Chairman King said he would have
preferred an income tax applying TO
every one in Washington, including
members of Congress but pointed out
it did not seem possible to get it
through: If the committee gives for
NAL approval to the completed draft
tomorrow. Senator King plans to re-
port the measure promptly to the
Senate and seek early action
Among those who met with the
committee today were Commissioner
Hazen, Corporation Counsel Seal. Spe-
cial Assistant Corporation Counsel
Morgan and District Budget Officer
Donovan.
officials would not venture pre-
diction on the revenue yield of the re-
vised business tax in advance Of a
report on the bill, but indications we're
they believe it will raise at least as
much and probably more than was
needed to replace the defeated income
tax.
One Tenth Per Cent.
In the new business tax, which the
committee has Under consideration,
the bottom rate of one-tenth per cent
nf rcnoirtc t-n,l1I tr-l,o
the spread or difference does not ex-
ceed 3 per cent of the cost of goods
sold. The other steps are:
Two-tenths where the spread is be-
tween and per cent.
Three-tenths where the spread is be-
tween and per cent.
Four-tenths when profits are in
excess of per cent.
The commissioners are understood
| to have expressed yesterday a prefer
ence for sales tax, with the revised
business privilege tax as second
choice While there is some sentiment
| in the Senate committee for the sales
tax. all signs point to adoption of the
second suggestion. in view of the fact
| the Senate struck out the sales tax
| last year after it had been recon-
mended by the committee.
After the committee had spent sew
eral hours yesterday canvassing the
local tax problem Senator McCarran,
Democrat, of Nevada declared his be-
lief the Federal Government should
bear larger share Of the cost of
maintaining the Capital CITY