Evening star., 1954-03-17
Court Test Due
On Alexandra
Business Tax
Contractors Refuse
To Pay Thousands
For License Levy

W sbSSstSS @SNy
A controversy over the amount
Of business license taxes Alexan-
dria contractors should pay ap-
parently is headed for court in
the face of a city council decision
to stand firm by existing regu-
lations.
Andrew w. Clarke, attorney
for a group of contractors, an
nounced, after a city council
meeting last night, that his
clients will refuse payment of
thousands of dollars the city
claims is due for the past three
years. Mr.. Clarke said the con-
tractors will test, in court. the
city's right to collect the taxes.
The city says the contractors
must pay tax of 80 cents per
500 gross receipts for all busi-
ness they do in Virginia, except
for any business on which a
business license tax is paid else
where. Since the law was en-
acted five years ago, about half
Of the city contractors have been
paying the business license tax
only on construction within the
city.
Three-Year Limit.
City Attorney v. Floyd Will
liams advised the council the
contractors could be billed for
overdue taxes three years back,
but no further.
The alleged underpayment Of
taxes was brought to light by
the city'S new tax enforcement
division. Tax Inspector James j.
Malone reported that three con-
tractors owe the city $43,201 in
back business license taxes. The
same three contractors paid
only a total of 1882 over the
same three-year period. Mr.. Ma
lone said the records of seven
other contractors show they
have paid the full amount owed
the city. He said there are many
other contractors accounts yet
to be audited.
Could Overcome Deficit.
1--WE have q budget deficit Of
$4,000 right now" said Mayor
Marshall J. Beverley. 1--WE can
more than get rid of this deficit
if we collect these back taxes"
Mr.. Clarke protested that
Alexandria's business license
rate for contractors is higher
than the rates of nearby juris-
dictions He cited the 18-cent
rate in Arlington, and declared
that Alexandria could not COM
pete in bidding with contractors
who enjoy lower rates. He pro-
tested that outside builders could
come into the city and pay lower
fees.
City Attorney v. Floyd Will
liams said outside builders also
must pay business license taxes
in Alexandria if they do more
than $685. 900 worth Of business
in the city. He acknowledged.
however, that the city's business
license law does not apply to
developers.
Cites Two Big Projects.
City Manager Ira Willard re-
ported that subcontractors on
the Bradlee Towers and War;
wick projects paid total of only
about $4,000 in business license
taxes. although both are multi
million dollar projects.
Mayor Beverley said he was
shocked to learn that developers
pay no business license taxes. He
asked Mr.. Williams to prepare
an amendment to the business
license tax ordinance to cover
them.
1--WE can still catch the
Brookeville developers. can't
we?" asked Mayor Beverley.
Mr.. Williams said he could
have the amendment ready in
two weeks.
The council chamber was
packed with contractors. One
walked out and threatened to
move his business from the city.
On motion of Councilman
James M. Duncan, the matter Of
collecting the unpaid taxes was
left up to City Manager Willard.
Mr.. Malone. Commissioners of
Revenue C. A. Callahan and
Citv Attorney Williams.