Evening star., 1947-02-26
District Tuxes
Continued From First Page

HISVtCI UHSS
Continued From First Page.)
come, half of which Is earned ir
the District.
The Maryland l per cent tax or
$4,000 would be $40. The District
per cent tax on the $4,000 earned
here would be $40. But in this case
the resident would receive a credit
against the District tax of so pei
cent of his Maryland tax, Or $40
Thus. he would pay no District tax
In the case of a resident of Mary
land or Virginia, who earns his en-
tire net income in the District and
is taxed upon it in his State, no Dis
trict tax would be paid.
The District, however, would eX-
tend these credits to other States
only If they do the same for their
residents who earn income here.
Corporation Rate Continued.
The Commissioners propose to
continue the present per cent levy
on income of corporations earned
in the District. The bill authorizes
them to set up rules for the alloca-
ton and apportionment of CORPORA
ton income that may be fairly at
tributable" to trade or business here.
The 5 per cent levy is also ex-
tended to unincorporated businesses
except that such businesses are al
lowed a $4,000 exemption against
net income before the tax is ap-
piled. This exemption, it was in
dicated, was to prevent the very
small businessman from paying a
5 per cent levy on his net income
from an unincorporated business
while a salaried employe receiving
the same amount was being taxed
at the lower personal income rates
Lawyers, doctors and members OF
other professions where more than
80 per cent of the gross income
comes from personal service and
where capital is not a material in
come producing factor, are exempt
Existing Law Called Bad.
The Commissioners said they were
asking an entirely new income tax
law because the existing statute has
already been amended several times
and is thoroughly unsatisfactory.
Pointing the official finger at the
"domicile" basis for present income
taxation, they said it is "manifestly
inequitable and should be corrected
Immediately"
Core of the new tax program is
the controversial retail sales tax.
which is expected to yield $4,000, ,000
in full year of operation.
AS disclosed yesterday at Boarc
of Trade tax meeting by Corpora.
ton Counsel Vernon West, the meas.
ure is modelled after tax now ir
effect in New York City.
This calls for the establishment
of price brackets within which the
cash tax is levied and does not re-
quire the use of stamps or coupons
In New York, for example, the tax
payer pays cent on purchases from
16 cents 10 66 cents. From 66 cents
to- $115 the tax is 2 cents.
50-Cent Exemption Set.
The local sales tax bill would give
the Commissioners authority to set
up such brackets to avoid tax pay
ments of fraction of a cent. The
measure also would allow the city
heads to exempt purchases up to
so cents.
Exemptions from the sales levy in
clude food for consumption aoff
premises, other than candy and soft
drinks; drugs, medicines and eye
glasses, meals in restaurants where
the bill is less than $150 per person,
items otherwise taxed such as gaSo-
line and liquor, building materials
going into permanent construction
purchases by the Federal or District
governments or semipublic agencies
use" Tax Is Buffer.
The companion use tax applies
to the use here of any personal prop
erty purchased at retail. 1t is in
tended to protect local busines!
against purchase of items in untaxee
areas.
Exemptions from the "use" levy
would include property bought be.
fore the tax is enacted; property
stored in transit but not used; prop
erty bought out of town amounting
to less than $25 in any month; prop
erty to be merged into any other
commodity; purchases by newcomers
to the District made more than q
year ago.
The amusement tax is drafted
along lines similar to the Federal
levy in an effort to minimize the
burden on proprietors of amusement
establishments. 1t would apply tt
season tickets or subscriptions, as
well as day-to-day ticket purchases
Admission is defined as covering
seats, tables or other similar accom-
moda tons.