Evening star., 1941-02-27
Non-Residents
Again Facing
DC. Income Tax
Higher Stote Rote
Exempts Maryland
And Virginia Citizens
BY JAMES E. CHINN.

The Fiscal Affairs Subcommittee
of the House District Committee to-
day tentatively approved a series Of
proposed amendments to the local
income tax law including one which
will require non-residents to pay a
tax on that part of their income
earned here.
The thousands of Maryland and
Virginia residents working in WASH
ington will escape the tax, because
the income tax rates in those States
are higher than in the District and
a credit will be allowed those nom
residents who pay an income tax in
the States. Non-residents from
States which do not have an income
tax, however, will be required TO pay
the local tax.
Action was taken by the subcon1-
mittee shortly after Representative
Smith, Democrat, of Virginia ap-
peared before the members and
registered vigorous protest against
a provision in the proposed new tax
legislation which will require nom
residents to file an income tax re-
turn to the District, even though
they might not be subject to the tax.
Plan Modified.
AS a result of Mr.. Smiths COM
plant, the subcommittee agreed to
modify the original plan and allow
non-residents to file a simplified tax
return-a return that will not seek
all the information required in a
regular return that District residents
fill out. The special nonresident
return will ask only such questions
as the amount Of income earned in
the District and the amount Of the
tax paid on the income in the States.
1t is planned to require non-residents
to attach the State tax receipt to
their returns.
The subcommittee also approved
an amendment suggested by Attor-
ney General Jackson allowing a fee
earned for work done over a period
of years and paid in lump sum in
one year, to be spread, for taxable
purposes, over the years during
which the work was performed.
Under the present law, it was ex-
planned, lawyer who worked on a
case for five years and received a
fee Of 100000 at the end of the
flve-year period would be required
to pay tax on that amount. The
approved amendment would allow
such a person to make a return on
the basis of $4,000 a year for each
of the five years.
The new tax bill containing the
proposed amendments to the pres
ent law, Chairman Hunter said, will
be redrafted to include changes
made by the subcommittee and REIN
troduced so the full District Com
mittee will have a clean copy" for
its consideration Monday.
Mr.. Smith pointed out that at least
10000 residents of Arlington County
and countless others in Alexandria
and other nearby Virginia areas
would be caused an annoyance" il
required to file an income tax re-
turn here.
Il don't feel that our citizens
should be put through the annoy
ance OF filing third income tax
return" declared Mr.. Smith.
Two Fears About Bill.
We have two fears about this
BILL" said Mr.. Smith. First is the
annoyance it will cause our citizens
in filing a return. Second is the
possibility that the District income
tax rate may be raised at some fu-
ture date beyond the Virginia rate,
and thus confront our residents with
dual taxation.
Furthermore, it strikes me that
the District will be spending a lot
Of money to get returns from non-
residents from whom it will not get
thin dime"
Chairman Hunter estimated 1t
would cost the District between
100000 and 100000 year to collect
and audit the returns of non
residents.
why do we concern ourselves at
all with the non-residents?" asked
Representative Bates, Republican,
Of Massachusetts,. I'm concerned
about the fellow who lives here"
Asks About Audit.
Representative Hebert, Democrat,
of Louisiana inquired if the income
tax accounts of the District are
audited differently from those Of
other municipal accounts.
1--WE been reading a lot in the
papers lately about a shortage in the
dog tax fund and thought I was
back in Louisiana" he said. IF the
District is going to continue that
(See D. c. TAXES, Page A-I6)