Evening star., 1950-12-18
Urged
To Lift Sales Tax
On Utility Bills
Survey Commission
Observes Customers
Now Pay Dual Levies
BY the Assoeiated Press

BALTIMORE, Dec. 18.-The
Maryland Tax Survey Commission
today recommended that the
State sales tax be taken off gas
and electric bills.
AS it is now, the commissions
report said, these customers are
taxed twice; part of their bills
support the State gross receipts
tax, and they must pay the sales
tax on the total. This means
taxation.
I'm most cases other than the
sale of gas or electricity" the re-
port said, "the Retail Sales Tax
Act exempts from the tax any
transaction or sale where a spe-
cial State tax has previously been
imposed. Why, then, should gas
and electricity consumers be
marked for such special tax
treatment?"
Revenue Near SIS Million.
The controllers Office informed
the commission that to cut out
the retail sales tax on these bills
would mean a revenue loss Of
slightly less than SIS million.
The commission said this would
be made up in part by an increase
in the gross receipts tax of about
100000, so the actual loss would
be only about 100000, and the
benefactors would be the utility
customers.
Today's report by the group
commonly called the Case Com
mission-concerned the gross re-
ceipts tax Last week the COM
released reports Of prop
erty and State income taxes.
The commission was appointed
last year by Gov. Lane at the
request of the 1949 General AS
sembly to make recommendations
on overhauling the States tax
program.
Rates the Same Since 1906.
The report said the commits
sion's first implus. after digging
into the gross receipts tax ques-
ton, was to recommend repeal
of the levy and substitute some
other form of taxations.
1t decided, however, that the
most logical course would be to
the rate structure and
modernize its concept to bring it
into step with the times. The
tax rates have not been altered
since 1906.
Several classes of taxpayers
which SO years ago had the high
est record of earnings and con-
sequently we're subjected to the
highest tax rates now earn very
modest returns on investment and
occasionally incur deficits" the
report said. TAX relief clearly
is required for taxpayers of this
category"
Sliding Scale Urged.
For this reason the commits
sion said, and since smaller utili-
ties virtually without exception
have displayed less ability to pay
a substantial tax than have larger
it recommended a slid
ing scale rate of gross receipts tax
that was less for the smaller in
come groups and greater for the
larger companies.
For example, in 1947 the East
ern Shore Electric Power Co.,
with gross earnings of $134 ,494.22.
paid 11a per cent tax of
Under the commission's
proposed plan, Eastern Shore
would pay only $844.94.
On the other hand, Consolidated
Gas Electric Co. in Baltimore,
which paid a gross receipts tax
of $243,135.91 on it's gross income
of $16,209,0 9,060.64 for the same
year would have to pay a tax of
$321,681.21. It's tax per cent would
jump from 112 to 2.
Reduction Asked for Railroads.
The commission recommended
that railroads be given a reduc-
ton of tax rates and an exemp-
tion increase from 81 900 to SIS. 900
gross receipts in the two lower
brackets.
That railroads are paying a
disproportionately high rate Is
obvious" 1t said.
The commission said it couldn't
understand why telegraph COM
panies are being taxed at the rate
of 212 per cent while telephone
company rates are set at 2 per
cent. unless it was to encourage
the then infant telephone industry
when the present law was written.
Now the shoe is on the other
foot. Western Union. said the
commission, is going through a
period of marked difficulty" and
deserves some relief.
2 Per Cent Rate Suggested.
Since each is in competition
with the other, the commission
recommended that the tax rate
for both be placed at 2 per cent.
The report also recommended
that:
l. The tax measured by the
gross receipts of safe deposit and
trust companies should be re-
pealed.
2. Railroad revenues derived
from express or parlor cars or
sleeping car companies should be
excluded from the operating reve-
nues of railroad for purposes
of the gross receipts tax.