Evening star., 1941-10-05
BY I. A. EOX.

- VA
Whether Federal employees on duty
here are liable for the District in
come tax when they claim perma-
nent home elsewhere. and the right
of employees of the District Govern
ment to be exempt from garnish-
ment proceedings are included in
important local issues to be decided
by the Supreme Court in the term
starting tomorrow. A challenge of
the now-abandoned business priv
ilege tax as applied TO the income
from property administered by the
receiver OF an insolvent bank. and an
attack on the constitutionality of
the Alley Dwelling Authority Act are
among other cases on the docket.
The income tax case came before
the court near the end of the last
term, when the petition of the Dis
trict Government for review was
granted. 1t is scheduled to be
argued in the week beginning
November 10. and under ordinary
circumstances. a decision may be
looked for around the first of the
year. All other District cases have
been filed since June. and the court
is expected to announce sometime
this month-on one of the remaining
Mondays after tomorrow-if they
will be reviewed. Denial of review
leaves the decision of the lower
court in effect
Approximately 10000 Capital res
ldents will be affected by the out
come of the income tax case which
is on appeal from the District Court
Of Appeals. The lower court held
that inasmuch as Government serv-
ice requires residential presence
here. Federal employees may main
tain their domicile in the State from
which they come unless they give
clear evidence" of intent to forego
State allegiance.
The tax act was tested by Paul M.
De Hart. employe of the War De-
partment, and Henry c. Murphy,
Treasury Department economist.
who claim residence in Harrisburg.
Pa. and Detroit respectively. Mr.
- t1oA EhANl lAllICl plOIcSI ID tHA
OF sl6.36 for 1889, and Mr.. Murphy
paid s25.55 the same way.
Bank Receiver Sues.
The business privilege tax suit
was brought by Justus S. Warden.
as receiver for the closed District
National Bank. when he was called
on to pay approximately $500 in
taxes for rents received in 1886
and 1887 from apartment houses and
an office building which were part
of the bank assets. Disputing the
claim for the tax filed by the Dis
trlct Government. Mr.. Wardell con-
tended that the tax did not apply to
him as the receiver for an insolvent
bank, and that to pay it would
diminish the assets of the inStitu-
ton. District Court upheld this
contention but was reversed by the
Court of Appeals, which said that
National banks in receivership are
exempt from Federal taxation onlv.
The question involved is viewed with
Importance both here and elsewhere.
because of the possibility that it will
establish a precedent in taxing in
solvent banks all over the country.
The intangible personal property
tax, which likewise has passed out
of existence, and the business privi-
lege tax are being challenged by the
Maryland and Virginia Milk Pro-
ducers' Association, which is fight
ing levies totaling nearly $4,000
for 1936-7-8 and would face a claim
for approximately $l65OO more for
1899 in event of defeat. The District
won in the Court of Appeals. The
association contended that it was a
cooperative marketing corporation.
incorporated elsewhere. with non
resident members, and therefore not
liable for the tax on intangibles.
and claimed exemption from the
business tax on the ground that it
served simply as agent for the
l,200 milk producers in MARYLAND
and Virginia whose output it sells
to distributors. The National CO.
operative Milk Producers Associa-
ton, OF which the Maryland-Vir-
glnia group is member, has Joined
in the petition for review. telling the
Supreme Court that the Court of
Appeals decision "casts into doubt
the legal status of agricultural CO.
operative associations.
Some 10000 District government
employees will be affected by the
garnishment case. In this Miss Mary
E. Chewing instituted garnish-
ment proceedings against the Dis
trict government to levy on the
salary of Miss Mary E. Butler. a
Gallineer Hospital nurse. against
whom she had won a Municipal Court
judgment for S201 for an alleged
debt. The District government con-
tended that as municipal corpora
ton it could not be made the OBJ
ject of such suit, and the Court
of Appeals upheld this argument.
Alley Dwelling Act Challenged.
The Alley Dwelling Authority Act
is being challenged in the Supreme
Court by Miss Minnie Keyes. of
TIA Seventh street S.W. She sought
unsuccessfully in the lower courts to
block condemnation proceedings
started BY the Federal Government