Evening star., 1938-01-17

phCcCAS wOAulIIk VI tIlc UuSlIlcSS. priv.
ilege law and the legal interpretations
placed on this measure as now writ
ten. The reasons for the distinctions
are to be found among scores of legal
rulings which have been rendered by
the office Of the corporation counsel.
The law did not draw a definite
dividing line. This was left to the
Commissioners and their legal ad-
visers. Backstage. incidentally. there
has been a battle between lawyers
over the adopted interpretations.
To quote one lawyer in private prac-
tice: Why. I could own a string of
properties stretching all the way from
Silver Spring to Anacostia and collect
500, 900 in rent annually or more and
not have to pay q dime for business
privilege taxes. And some one else
could own one office building or apart
ment and be subject to the tax, so
long as his gross receipts were above
$4,000 a year."
In theory, at least, the statement
Is correct.
Generally speaking. the owner Of
revenue producing real estate is
deemed to be engaged in business" II
he provides services" to his tenants.
Under one Of the first formal rul-
ings, the Commissioners decided that
the mere ownership Of real estate,
or the collection of rents from such
ownership, was not in itself "busi-
ness" under the meaning of the law.
They added. however, that when the
owner provided light or heat and
janitor service to the tenants Of real
estate, such as apartment houses. office
buildings "and the like" the holding,
owning or managing Of such properties
did constitute business and was sub
ject to the tax.
While this is the general state
ment. there are many varieties of the
real estate problem to be found in
the individual legal rulings.
Mr.. A owns a number of three
family apartment buildings which
have q central heating plant and one
janitor. Because Mr.. A provides such
services" he is 'in business" and
must pay the tax. He is required to
obtain separate $40 business privi-
lege license for each building, since
they have separate entrances and do
not have communicating halls. Mr..
A might assume that since he Is re-
quired to pay q license fee for each
building separately, he might consider
the rental revenue separately. The
revenue from each building Is 81, ,44O,
or less than the $4,000 nat exemption
allowed by the law. If the rentals
were considered separately there would
be no tax. The law. however, re-
quires that his rentals from all
buildings be totaled and the tax paid
on the resulting sum, less one deduc-
ton Of $4,000.
Just when a service is not a 'serv.
ice" also is the subject Of legal rulings.
One of the informal letter" opinions
reads:
Normal exterior and interior re-
pairs are not services. The supply
Of q part-time janitor, whose duties
are to clean buildings and cut the
grass, If supplied for building occu-
pied by several tenants and for the
common benefit Of all, is service in the
contemplation of the regulations.
"of course. If real estate should be
rented and, as an accommodation,
an employe Of the owner or agent
would clean the building and cut
the grass where, under ordinary cir
cumstances, such service would not
be rendered, such supplying Of the
part-time janitor would not be serv-
ice"
The corporation counsel, 80 far A.
known, has not yet given an opinion.
formal or informal, as to Just what
would be meant by under ordinary
circumstances" referred to above.
However, . Mr.. x inquired If he
should be deemed to be engaged in
business" and outlined his circum-
stances somewhat as follows: He is
the owner of q number of flats, the
tenants Of which furnish their own
6Aat naA A0Ab l~s -