Evening star., 1938-07-22
FIGHT |SP[ANNED
ON D. {. TAX RULE
Determined. Campaign Is
Ordered to Keep Privilege
Levy Intact.
BY DON S. WARREN.

A determined fight was ordered to-
day by the Commissioners in a move
to upset yesterdays decision by District
Court Justice Jennings Bailey holding
the business privilege tax law of 1897
unconstitutional in so far as it was
applied to interstate commerce.
CORPORATION Counsel Elwood H. Seal
was directed to file a plea in District
Court to the interstate commerce
count OF the case which had been
brought by District Grocery Stores.
Inc, and to seek jury trial of the
issue on its merits. The Commissioners
announced they were prepared to ap-
peal the case to the higher courts
should Justice Baileys ruling be fol-
lowed in the planned jury trial.
Justice Bailey's decision was an ac-
ton on demurrer filed by the Dis
trlct to declarations made by the D.
G. S. in its attack on taxes levied
against it last fiscal year on its gross
receipts for the preceding year.
The Commissioners decided on their
course of action after an emergency
conference with Mr.. Seal, Vernon
West, principal assistant corporation
| counsel: Glenn Simmon. an assistant
assigned to tax matters: 10 v. Morgan,
the one-man tax appeal board, and
District Auditor Daniel j. Donovan.
Revision Is Cited.
The Districts lawyers emphasized
IN statements to the press. first, that
the tax case was on the original form
of the "stop-gap" business privilege
law. which since has been revised to
provide new and less heavy burden
on interstate commerce, and second.
that Justice Bailey had sustained the
District in this case on two important
grounds
One of these victory angles of the
test case was that the court held that
the D. G. S.. a cooperative agency
for independent grocers, was engaged
| in business for economic gain and an
other was that Justice Bailey held, in
| effect that the D. G. S. was subject
| to the business privilege tax.
For this reason it appeared that
! "AiiAC elAC H. ". ~ UAouSAG Vic III 81
successful attack on the business priv
ilege law, it stands to reclaim only
minor portion of the protested tax
| 1t was calculated at the District
Building that while the total tax bill
/ against the D. G. S. for the past year
was $l6,273.34, the cooperative stood
to regain only $2.940-being that por-
,ci,
by the D. G. S. in places beyond the
| District.
See No Refund.
The Districts lawyers reiterated
again today that the District would
not be compelled to refund taxes-even
should Justice Bailey's decision be
upheld-to any taxpayer except those
who had paid the levies under the
| 1887 revenue act, involuntarily or
under duress, and who had made
formal protest when paying the levy
The lawyers insisted the District
would not have to refund taxes paid
last year by persons who had not paid
under formal protest, and that in the
other cases any refunds would be avail
able probably only after the taxpayer
had brought action for the refund.
Maj Donovan predicted the Bailey
decision would make but a very little
dent in the Districts revenues, for
these reasons, and since it is reported
that only relatively small number
Of taxpayers paid last years levy un-
der protest.
There also was talk at the District
Building that Congress should be
asked next January to abandon the
two-year trial of the business privilege
levy and to substitute some other form
of taxation Commissioner Melvin C.
| ICan rAX pann A & -