Evening star., 1947-12-13
Alexandra Tax
On Businesses
lobe Revised
Council to Get Plan
Bosing Levies on
Gross Receipts

"A new Alexandra business tax
program based on gross receipts will
come before the City Council for ac-
ton this month.
This was disclosed yesterday bv
Col. Everett A. Hellmuth, chairman
OF the Councils Finance Committee.
after details of the program were
outlined by an expert of the Uni
versity of Virginia Bureau of Public
Administration which is conducting
tax survey of the city. The recon-
mended business tax program OUT
lined, yesterday grew out of the first
phase of the survey which dealt
with business taxation only.
Archie Dotson, research assistant
of the bureau, explained the results
of his groups survey to officers Of
Alexandra business groups and the
press. Col. Hellmuth said the ordi-
nance needed to put the new tax
plan into effect is expected to be
completed and will be presented to
the City Council with "a recon-
mendation for adoption by his COM
mittee. -
e~ Changes Outlined
Major difference in the proposed
program and the 1947 business tax
ordinance now in effect is that all
business taxes under the new plan
would be based on gross receipts.
The 1947 ordinance contains p fat
tax provisions, AZ business license
provisions on a semigraduated scale,
and 20 volumes of business taxes.
All taxes in the new plan would
be based on volume Of business.
Mr.. Dotson emphasized that the
new plan would do away, with Ger
tain inequities in business taxation
that grew out of the 1947 ordinance.
To explain this, he showed how
some merchants last year had their
license taxes doubled, while the
same tax for merchants doing a
larger volume of business of the
same type enjoyed reduction in
taxes over the year before.
The new tax plan would in most
instances reduce license taxes for
the man doing a small volume of
business and gradually raise the tax
in proportion to larger volumes Of
business. A comparison of tax rates
for 1947 and the proposed plan for
1948 in the professional bracket
shows that a man who paid $50
on $4,000 gross receipts in 1947 would
only pay $3390 on the same amount
of gross receipts under the new
plan. A man who paid $3.50 on
$4,000 in l947 would, however, pay
1899 in 1948
Comparisons Similar.
Comparisons are similar for re-
tail merchants. A merchant who
paid $27.50 last year on $4,000 would
pay only $40 IN 1948, while one
who paid S20190 on 100000 would
pay $500 under the proposed plan.
The plan breaks down all busi-
ness licenses into II categories.
Each category has rate per slO0
gross receipts. 1t was emphasized
that the rates had been worked
out in each category so that a
man earning $4,000 gross profits in
any type of business would pay
approximately the same license tax.
The II categories and suggested tax
rate per 500 gross receipts follows:
Retail merchants, 80 cents; whole
sale merchants, % cents; profess
sional, s1.13: contractors, 43 cents;
repair services, 30 cents; personal
services, 80 cents; business services.
80 cents; amusementS, IS cents;
manufacturers and professors, no
rate fixed; miscellaneous, no rate
fixed, and regulatory taxes, no rate
fixed.
Revenue Boost Expected.
Based on an estimate of $50, ,420,-
684 in business volume for 1948, the
new tax schedule would bring the
city an estimated revenue of $685.
745 next year. as compared with
S137,671 realized from license taxes
in 1916. This years license tax
revenues have not been compiled, 1t
was explained, but it is expected to
be much higher than 1946.
Another important effect OF the
new tax plan, it was explained,
would be the abolition of the "obso-
lete fee sysem which, like other fea-
lures of the tax system. has con-
tinued in effect long after its use
fulneSs ceased"
Mr.. Dotson explained the problem
of tax enforcement will become OF
critical Importance" under the new
plan.