Evening star., 1940-01-16
Court Decision Opens
Drive 10 Collect
Back Business Tax
Approximately 100000
Delinquent, District
Officials Estimute


Delinquent, District
Officials Estimate
Collection of approximately $780,
900 from more than $500 firms and
individuals delinquent under the
business privilege tax of 1887 to
1889 was begun today after the Dis
trict Court of Appeals declared the
tax constitutional in broad decision
defining the powers of Congress to
legislate for the District of Columbia.
Congress repealed the tax law last
year after hundreds of business
houses and individuals had withheld
payment, or paid under protest with
the expectation that the levy would
be declared unconstitutional
The Court of Appeals decision yes
terday was unanimous 1t was unde-
termined today if attorneys for the
taxpayers would petition the United
States Supreme Court to review the
case.
The decision was a vital one be-
cause of the revenue the District
expects to collect from delinquents.
and because thousands of firms and
individuals had paid while filing
notice they would seek to recover
the sums if the law was found
unconstitutional.
The Districts case was prepared
by Corporation Counsel Elwood
Seal, aided by Glenn Simmon, as
sistant corporation counsel.
Decision Is Broad.
In the tax collectors Office is was
estimated that between $500 and
5000 of the 10000 firms and indi-
viduals taxable under the law have
failed to pay the levy, or still owe a
part of their assessments.
The decision upholding the law
was broad enough, lawyers said, to
influence future tax legislation in
the District.
Among other things, the decision,
written by Justice Miller, enlarged
upon the old contention that Con-
gress plays the same role in WASH
ington that Legislature does in a
State by pointing out that Congress
is not limited like Legislature. but
may use broad constitutional powers
in making local laws.
Congress, it was held, is not obliged
to make uniform laws throughout
the country, and may tax Washing
ton business under its power to reg
ulate commerce. Assuming that
the tax in the present case consti-
tuted a burden upon interstate COM
merce," the decision said, never
theless Congress had the full power
to impose it . :"
Sued in Municipal Court.
Congress imposed the business
privilege tax here in 1897, requiring
firms and individuals to pay two
f1fths of l per cent of their gross
receipts in excess of $4,000 a year.
Companies attacking the levy in
cluded the produce firm of William
H. Nield and j. Emerson Sauerhoff,
who sued in Municipal Court to
recover the tax they paid.
The tax was upheld, and the case
went before the Court of Appeals
on a writ of error.
The case was first argued more
than year ago, and attorneys for
the produce firm pointed out that
much of the firms revenue was de-
rived from customers not residing
in Washington and the local tax
was burden on interstate COM
merce. It was argued that the Con-
stitution forbids a State from i'm
posing such burden on interstate
commerce, and Congress should
| likewise be restrained while legis-
lating for the District of Columbia.
Yesterdays decision said: when
Congress legislates for the District,
it acts as a legislature of national
character, exercising complete legis-
lative control. as contrasted with the
limited sovereignty that Congress ex-
ercises within the boundaries of the
States"
Power of Exclusive Legislation"
Congress has the power of "ex-
elusive legislation in all cases what
soever' in so far as the District is
concerned.
"As the commerce clause operates
as a limitation solely upon the
States" the opinion said, "it con-
stitutes no bar to the action of Con-
gress in any event."
| While agreeing that the Court of
Appeals has ruled that Congress
may use in the District the same
powers enjoyed by Legislature in a
State, Justice Miller said, 1T does
not follow that when Congress does
act in such manner it acts subject
to the limitations imposed by the
Constitution on the States"
The opinion continued to the effect
that if Congress chooses thus to
exercise part only of its powers
1t may resemble State Legisla-
ture in so doing. but by so doing
it is not deprived of the rest of its
powers. It may exercise also, within
the District of Columbia, general
legislative powers.
when it acts by virtue of these
general legislative powers, it is free
of the restraints which are imposed
by the Constitution on the States.
Congress may choose the COM