Evening star., 1941-04-21
Milk Producers
Held Liable for
$4,000 Taxes
Association Acts
In Own Behalf,
Court Rules

The Maryland and Virginia Milk
Producers Association, Inc, which
handles about 81 per cent of all the
milk sold in the city, is liable for ap-
proximately $4,000 in District
taxes, the United States Court OF
Appeals ruled today, holding that
the association acts in its own be-
half, and not merely as the agent for
its LOO members, scattered through
Maryland. Virginia and West Vir-
ginia farms.
The court sent back to the Dis
tricts one-man Board of Tax Ap-
peals, 10 V. Morgan, the entire case
so that he might ascertain whether
the board erred in making no
deduction from the figures because
of tangible property and in adding
to them petty cash" and to eStab-
lish whether "other accounts receiv-
able" may have been wholly or part
ly included in the bookkeeper's
revolving fund" figures, which the
board adopted as the value of bonds,
mortgages, stocks, ETC. and may thus
have been assessed twice
Involved in today'S decision are
assessments on Intangible personal
property for the fiscal years ended
on June 80, 1886, 1887 and 1888 and
business privilege taxes for the year
ended June 80, 1888 The board
upheld, in part. these assessments.
GrOner Dlssents in Part.
Chief Justice D. Lawrence Groner
dissenting in part from the majority
opinion, considered that the items
in dispute were never the property
of the association, but actually be-
longed to the farmer members. less
only the one cent per gallon on milk
which the association could retain
for expenses and the accumulation
of its protective fund.
Hence, Chief Justice Groner con-
sidered that the assessment was
erroneous ana 0eclared.
Il am, therefore, of opinion that
so much of the decision of the Board
of Tax Appeals as found petitioner
tthe association liable for taxes on
account of receivables from dealers
and so much as imposed taxes under
the Business Privilege Tax Act on
the entire gross proceeds of farmer
milk sold by petitioner in the year
1888 is erroneous and should be set
aside and annuled."
Cites BoOkkeeper's Testimony.
The majority opinion, written by
Associate Justice Henry w. Edger-
ton, joined by Associate Justine
Miller, declared that the association
was not engaged 'in the business of
a broker or agent, was not a mere
conduit for the funds of a principal,
and was rightly assessed on the
basis of its gross receipts"
The majority asserted that there
Is no merit in the contention that
the association was not the owner,
but was mere custodian of its
revolving fund.-" pointing out that
the associations bookkeeper testi-
fed that the revolving fund lis the
net worth of the association.
The District Government was
represented by Assistant Corpora
ton Counsel Glenn Simmon, with
whom former Corporation Counsel
Elwood H. Seal and Principal As
sistant Vernon E. West, were on
the brief. Mr.. Simmon explained
today that the business privilege
tax was levied for the fiscal year
ending June 80, 1888, totaling ST.
1852, based on receipts for the
calendar year 1886. Regarding
intangible personal property, Mr.
Simmon declared, a tax of S3,22715
was laid for the fiscal year, 1886;
S4,23l.6l for the fiscal year, 1887, and
S4.968 96 for the fiscal year ending
June 80, 1898.
The District assessor made a tax
levy on the association and the
Board of Tax Appeals made its
own valuation of the tax due. The
District government sought to tax
Intangible personal property, COM
prising cash and securities valued
at between 100000 and 100000
and accounts receivable also were
taxed. officials said today that
under the business privilege tax,
the District government did not
assess taxes outside the District.
The association, said the munich
pality, takes the milk from its
farmer members and sells it to
local dairies, while the association
position was that it does not own
the milk, but this is owned by its