Evening star., 1942-01-15
City HeadsP|an
To Tax Nearby
Loan Profits
Mason, Angry Over
Bills Defeat, Says
D. 6. Will Beur Down

A real crusade" to require small
loan companies of nearby States to
pay taxes on that portion of their
business which they derive from
within the District was planned to-
day by the Commissioners as a direct
result Of the defeat in the House
Monday Of their small loan measure.
While declaring that this punitive
measure would be undertaken and
pursued indefinitely. Commissioner
Guy Mason said he still had not
given up hope that regardless Of
opposition the District might yet
have q new law permitting q legal
rate OF interest, including other
charges, which would enable small
loan firms to operate here at profit
within the law.
At the same time the Commits
sioners disclosed they were consider
ing levying special District taxes
against landlords who collect rents
in advance and against banks and
other lending institutions which
take out interest charges in advance
when loans are made.
Blames Loan Shark LOBBYISTS.
Commissioner Mason said he was
boiling mad" over the House defeat
this week of the measure sponsored
by the city heads to amend the Dis
trict's rather ancient and inopera-
tive loan-shark law to permit 2 per
cent-per-month charge on the un-
paid balance in small loan cases.
In nearby areas the permitted
charges are or 81 per cent.
"The loan-shark LOBBYISTS heat
our bill in the House-for the mo-
ment at least-but they are not 90
ing to beat payment of taxes due
the District under the District in
come tax law" declared Mr.. Mason.
He added that in view of the cur
rent situation the only thing left
for the Commissioners to do was to
invoke ito the fullest" the provisions
OF the District income tax law.
Mr.. Mason said that under this
law all corporations, companies or
partnerships, nonresident as well
as otherwise, doing business in the
District may be taxed on the source
OF their income from within the
District. He said he would insist
not only that such firms report the
source OF their business from the
District, but also that every taxpay-
er In the District be forced to
report to whom they had paid in
terest and other charges to loan
frms from Maryland and Virginia
as an effective means Of learning
the necessary facts.
o.. Evasion Long Practiced.
For years District officials have
been aware that small loan con-
Germs have advertised for business
from District residents, the ofices
OF these concerns being located in
nearby Maryland and Virginia.
tnereby evading the requirements
OF the District law that a charge
OF not more than per cent q month
pay be made here and that licenses
must be obtained from the District
government. In recent years there
nave been no such applications for
licenses, although it is reported
nearby concerns have been taking
annually from 100000 to $1,000 600
In profit from the District.
III they won't let us have the
legitimate law which We seek" said
Mr.. Mason, then the time has come
1or us to use to the fullest the pro-
vision of our District income tax
law. and this We propose to do. un-
equivocauy."
Mr. Mason suggested that land.
lords who collect rents at the be.
ginning OF the month have the Use
OF the payment during the period
before the tenant owes the whole
sum Tor the stated period. He said
this takes money out Of the pocket
OF the tenant, and he could see no
reason why the District could not
place . tax on the use of the
money.
Might Broaden Plan.
Mr. Mason said it appeared fair
also for a similar levy to be made
on lending institutions which take
out the interest and other charges
at the time they advance a loan to
a customer. He said the plan, if
adopted. might be applied also to
other circumstances where bus
iness operators require payment in
advance.
The city heads said they were
considering another move to pro-
vide for the revocation of business
licenses of any business concern
or dealer who is found to have in
dulged in Misrepresentation as to
the quantity or quality of the mer-
chandise he has sold. In this con-
nection they directed George M.
Roberts to consult with Budget Of
f1cer Walter L. Fowler to work out
more comprehensive plan to pro-
tect the consumer.
Possibility of levying a "consid-
erable" license fee for the opera
ton of pinball machines, vending
machines and other such mechan-
ical devices also is under study.
Firms Told to Let