Evening star., 1938-01-16

| nesSes.
3. Nonresident concerns likewise
are not on an even basis, one with
| another.
4. While nonresident concerns which
do not maintain plants or offices here
are given a legal advantage over Dis
trict competitors, some but not all
nonresident concerns have joined in
protests against the tax, terming it 4
trade barrier"
Reasons for this complicated stu
alton may be found in the broad terms
OF the act as now drawn and in legal
interpretations placed on it. Nearly
800 letter" opinions have been
rendered by the ONCE of Corporation
Counsel Elwood H. Seal to prospective
taxpayers. Inquiries still are being
received by Special Assistant Corpora
ton Counsel 10 v. Morgan
The law prescribes that for the
privilege of engaging in business" in
the District there shall be required
$40 license and payment of a tax of
two-dfths of per, cent on gross re-
ceipts from such business, less a nat
exemption of $4,000. Business" is
denned to include the carrying on or
exercising for gain or economic benefit.
either direct or indirect, any trade.
business. profession, vocation, or COM
merclal activity" in the District.
why is there inequity in this?
In bidding for a Government con-
tract-there, are many large ones-the
bona f1de Washington concern OBJ
vlously must calculate on payment of
the gross receipts tax. The non-resi-
oent bidder, not having a plant or
ONCE here. is protected by specific
stipulation. He may send his bid here.
by mail or agent. He may win the
award, deliver the merchandise and
collect and not have to pay the busi-
ness privilege tax He would be
deemed not engaged in business" in
the District. provided only that he
maintains no plant or ofiice here and
does not ship the goods here in his
own vehicles, instead of by an inde-
pendent or common carrier.
Where Business Is Located
."Of course" one of the rulings
states, III a Washington merchant.
maintaining his place of business and
warehouse and the like in the District,
Shall procure Government business and
supply the merchandise from his
Washington place of business, he will
be considered as engaging in business
In the District-and be taxed accord
ingly.
1t nonresident concern projects"
itself into the District seeking nom
Government business, 1t, too, must pay
the tax on receipts from orders OBJ
tanned here. If, for instance, . Belti-
more firm maintains an ONCE here, or
sends solicitors into the District, or
sends goods to customers here for COL
lection on delivery. or delivers the
goods in vehicles of its own, then It
has engaged in business In the Dis
trict.
But the Baltimore firm may avoid
the tax If 1t wishes to manage its
business along certain lines, according
to the legal rulings. In fact, Repre-
sentative Palmisano of MARYLAND,
chairman Of the House District Com
mittee, has predicted that many Bal
timore houses will find q way to avoid
the tax. The record shows how it can
be done. District buyers could place
orders with nonresident firm by
mail, telephone or telegraph. The
goods may be delivered here by IN
Independent carrier, instead Of in the
trucks Of the nonresident dealer.
Bills could be rendered instead OF the
order being sent G. o, D. This would
not constitute business In the Dis
trict, according to interpretations of
the present law. ---~ ---.--. ,---.
District business spokesmen report
that this practice already is being fol-
lowed. They expect more Of 1t II the
law Is to be continued in force.
Trade Practices Established.
True, the nonresident legally could
not send solicitors to make the rounds
here. Other necessary changes in the