Evening star., 1941-11-06
SuprenneCourt
Hears D. {. Tax
Cases Nov. II
z Federal Employees
File Briefs in Fight
On Income Levy
By J. A. FOX.

BY J. A. FOX.
The right of Federal employees on
duty here to be exempt from tho
District income tax when they claim
ppermanent homes elseWhere-an is
sue that affects upward Of 10000
local residents-will be argued in
the Supreme Court November II.
The date was made known today
after Paul NJ De Hart of the War
and Henry C. Murphy.
a Treasury employe, who are fight
ing the tax on domiciliary grounds,
filed briefs telling the court that
Congress did not intend the tax to
apply to Federal employees unless
they had abandoned their domiciles
in the States.
A resident here since 1914, Mr..
De Hart. a divisional chief clerk in
the National Guard Bureau, claimed
domicile in Harrisburg, Pa, and
paid, under protest, a tax of S16.36
for 1889. Mr.. Murphy, an economist.
who came here in 1885, protested
payment of s25.55 for the same
period, claiming domicile in Detroit.
They were upheld by the Board of
Tax Appeals and when the District
government took the case to the
Court of Appeals the board ruling
was affirmed on the basis of the
earlier Sweeney case, in which the
court pointed out that Federal duty
requires residence here and that a
Federal employe may maintain his
domicile in the State from which
he comes unless he gives clear evil
dence of his intention to forego his
State allegiance" The appeal to the
Supreme Court by the District fol-
lowed.
Cite History of Tax.
In support of the argument that
Congress intended the Gomiciliary
exemption to apply. the two Federal
workers recite the history of the tax.
According to the report of the
House conferees, it is explained, the
House originally intended to tax "all
residents" and incorporated a pro-
vision allowing credits for taxes paid
in other Jurisdictions. Then the
House amended the measure to eX-
empt members of Congress and
their Staffs and when the Senate
rejected this proposal the measure
went to conference, where the prin-
ciple of taxing every individual
domiciled in the District . ." was
adopted. Quoting the subsequent
report of the House managers point
ing out that the bill made no pro-
vision for tax credits Ito persons
domiciled in the District" who paid
income taxes elsewhere, the briefs
say:
1T seems clear that when the
basis OF tax liability was shifted
from residence to 'domicile,' no
provision was made for tax credit
because the tax was not to be i'm
| posed on those persons domiciled
outside the District. The omission
Of the tax-credit provision ought
not to be construed as sanctioning
double taxation, but rather as an
indication that the drafers Of the
bill thought it unnecessary to do
so because they had segregated the
classes OF taxpayers in such a way
as to avoid double taxation: that
is. those persons domiciled in the
States were to pay income taxes
to the States and those persons
domiciled in the District were to
pay income tax to the District"
Overton Quoted.
Contending that this clearly es-
tablishes the fact that Congress
did not intend to impose double
taxation, the litigants next 60 fur
ther into the question of whether il
was intended that Federal employees
should pay taxes here or in the
States. On this point, they quote
Senator Overton, Democrat, OF LOU
isiana, chairman of the Senate man.
ayers, as saying that the domiciliary
exemption would apply to the Presi-
dent, cabinet members, members of
Congress and employees generally.
provided such employees have not of
their own volition surrendered their
domiciles in the States and have
voluntarily acquired domicileS with
in the District of Columbia" 1t is
contended further that Senator
Overton's Interpretation of domicile
prevailed among the House con-
ferees with the exception of Sena-
tor Drksen, Republican, of Illinois.
The briefs also argue that in
dividuals may not be domiciled lin
more than one place" and that
ruling by the court that Federal
employe is domiciled here would re-
lieve him of domicile in the State
from which appointed and con-
currently relieve him of taxation
in that State since nearly all States
which tax Federal employees in the
District of Columbia do so on the
ground that they are domiciled in
those States"
There are at least "a States which
would lose taxes under such cir
cumstances, the briefs say In two
States, it is added, the ruling would
result in double taxation, as Mis-
souri, and Delaware impose liability
on the basis of citizenship as we'll
as residence.
Mr.. Murphy. 1t has been brought
out previously, is not liable for
any tax in Michigan and has paid
; none; Mr.. De Hart has continued
to pay poll tax or occupational taxes
in Pennsylvania. Neither State has
an income tax.
The litigation will be heard by
seven justices, Chief Justice Stone
, and Justice Roberts taking no part
in the case. As is usual, no reason
, uos oeciopod for fbeir uithdrou uoI