Evening star., 1956-12-27
Virginia Group
Asks High Fees
For Businesses
Move Would Bypuss
Stute Sales Tax Ban,
Aid Nearby Counties
BY PAUL HOPE


taxes high enough to seep down
to the consumer level.
This form Of sales tax substi-
|tute was a major recommends
ton of the Northern Virginia
Planning Commissions fiscal af-
fairs committee which said there
is little prospect of the States
giving localities authority to tap
new sources of revenue.
In its 18th and final report
on the areas financial problems,
the committee said. 1T is quite
clear that the State is engaged
in using State financial aid as
a lever in forcing localities into
compliance with the official
State position on school segre-
CATION"
Under these circumstances, i'll
would be unrealistic to assume
that the legislature is eager toI
enact legislation which would
contribute to the financial in
dependence Of the counties" the
report said.
The committee previously rec
commended that if a sales tax is
adopted by the State, it be kept
low and localities be allowed to-
add a sales tax of their own.
Refer to Segregation Bills
Today's report said, however.
that the prospects of additional
State legislation permitting new
local tax authority must be
weighed in view of the overall
State political situation"
The committees reference was
to the recent State legislation
which permits the Governor to
withhold State funds from local
tiles integrating their schools.
Despite strong historical
position against Capitalization of
government, the Capitalization
of financial powers in the State
government has proceeded fur
ther on the average than in
other States" the report said.
The committee said that for
all practical purposes" Northern
Virginia local governments.
which now rely mainly on prop
erty taxes, are restricted to
consumption taxes in their
search for new revenue sources.
They have two avenues open
to them" the committee said.
lone, the sales tax, depends on
future legislation relating to the
States own use Of the tax. The
other is a broader use of the
business privilege license tax to
achieve either general or selec-
tive consumption taxation"
The committee notes that the
business license tax is now used
"at low rates" in Arlington,
Alexandria and Falls Church
md is under consideration in
Fairfax County.
Effects Explained
IF this tax were imposed at
substantially higher rates on
retail trade and services, it would
probably be passed on to con.
sumers. much like a general
sales tax"
The report said q per cent
tax on gross business receipts
would produce nearly 50 million
a year additional revenues in the
four Northern Virginia jurisdic-
tions.
There appears to be no legal
bar to the rate employed so long
as 1t is not prohibitive." the re-
port said.
A / per cent business privilege
tax would be difficult for the
businesses to absorb and there
fore most of it would be passed
along to the consumer. creating.
in effect. a general sales tax, the
report said.
Use Of the authority to i'm
pose business privilege taxes also
could be used to tax consumers
on a selective basis, the COM
mittee said. The authority to
tax consumers directly is limited.
especially in the counties. but
Through high business levies
which would be passed on to the
consumers, the Jurisdictions
could tax theater admissions,
transient rentals. cigarettes and
tobacco. telephone services and
new construction. the committee
said.
Some of these items are taxed
presently by Alexandra and
Falls Church. which as cities
have broader taxing powers.
Permisslve Laws Needed
A tax on public utility services.
other than telephones, would fit
well into the county tax struc-
lures. but would require per-
missive legislation. the report
said. Alexandria and Falls
Cnurcn already have utility
taxes.
Tie committee said Alexan-
dria. Arlington and Falls Church
could consider a low-rate gaso-
line tax to help finance street
improvements. This. however,
would have no Justification in
Fairfax, where roads are main
tatned by the State. it said.
Taxes on income. payroIls and
alcoholic beverages are mem
toned as possible sources by the
committee. but use Of these
would require changes in State
law that are highly unlikely, /"
the report says.
"One aspect Of the problem Of
finding new non-property taxes
l.. elal s.a~A o.. -