I wish to submit for the record also a tabulation of items exempt from the sales tax in other States, which has been compiled from information on hand in our office.

(The tabulation referred to is as follows:)

Mr. PRESS. I also submit a list and a map showing the States which have a tax on retail sales in effect in those States.

(The documents referred to are as follows:)

(Municipal Finance Officers Association). New York City, with a tax of 1 percent, collected $36,963,989 in 1944 and New Orleans $5,357,000. Although these cities vary widely in population from the District of Columbia, their per capita retail sales is estimated to be much lower; yet, it is interesting to note that the yield of the sales tax per dollar in both cities is very close.

Yield per dollar was figured on the basis of the retail sales per 1944 in relationship to the sales-tax yield for the same year. Based on these two yields and sales management's estimate of retail sales for the District of Columbia, the estimated sales tax for Washington was estimated to be:

Based on New Orlean's tax-
Based on New York's tax___.

$15, 042, 535 14, 157, 680

OTHER METHOD OF COMPUTATION

Based on the population estimate of 869,000 for the District of Columbia and by applying a ratio of per capita retail sales to per capita sales tax for both New York and New Orleans, a lower estimate of yield was obtained, as follows:

Based on New York___.
Based on New Orleans__.

$12, 332, 400 15, 265, 000

It should be borne in mind that although the New York City yield more closely approximates the probable yield in the District of Columbia, it cannot be considered entirely comparable. The New York tax exempts interstate commerce. However, it has been contended by various legal authorities that Congress, by enacting the District of Columbia sales tax, has the rightful power to tax property purchased in interstate commerce. This would, of course, make the yield in the District of Columbia considerably higher than the estimates.

New York City exemptions: (1) Food; (2) eyeg asses; (3) cigarettes, (4) fuel supplies, ships' equipment, ships' stores; (5) newspapers and periodicals; (6) sales to New York City or semiprivate institutions; (7) sales exempt by State or Federal institutions; (8) automobiles to veterans, material used in converting property into emergency shelter.

New Orleans exemptions: (1) Livestock, poultry, and other farm products direct from the producers; (2) used articles taken in trade; (3) utilities; (4) newspapers; (5) fertilizer and farm products.

Mr. PRESS. This estimate of a $12,000,000 to $15,000,000 yield is predicated on the assumption that the sales tax, if enacted in the District of Columbia, will not be overly burdened with exemptions. Experience in other jurisdictions has indicated that evasion and avoidance of the sales tax is made easier as exemptions are multiplied.

The board of trade is in general agreement with the proposal to exempt food for home consumption and medicines. We believe, however, that the proposed exemption of meals in restaurants up to $1.50 is too high, and that if meals are to be exempted, the maximum should be $1, the figure currently being used in New York.

The board of trade believes that public-utility bills should be exempt. It is suggested also that sales exempt from the act be those not over 15 cents. The bill provides that the Commissioners may exempt sales of 50 cents or less. Various District officials have been discussing the exemption of sales of 25 cents or less. We think that figure should be reduced to 15 cents, and suggest that to the committee, if it does specify the brackets for payment of the tax in the bill, start at a figure no higher than that.

I wish to submit for the record also a tabulation of items exempt from the sales tax in other States, which has been compiled from information on hand in our office.

(The tabulation referred to is as follows:)

Mr. PRESS. I also submit a list and a map showing the States which have a tax on retail sales in effect in those States.

(The documents referred to are as follows:)

(Municipal Finance Officers Association). New York City, with a tax of 1 percent, collected $36,963,989 in 1944 and New Orleans $5,357,000. Although these cities vary widely in population from the District of Columbia, their per capita retail sales is estimated to be much lower; yet, it is interesting to note that the yield of the sales tax per dollar in both cities is very close.

Per capita retail sales, 1944:

New York City-

New Orleans____

Sales-tax yield per dollar:

New York City (based on 2 percent).
New Orleans__.

$646 602

0.016

.017

Yield per dollar was figured on the basis of the retail sales per 1944 in relationship to the sales-tax yield for the same year. Based on these two yields and sales management's estimate of retail sales for the District of Columbia, the estimated sales tax for Washington was estimated to be:

Based on New Orlean's tax----
Based on New York's tax.

$15, 042, 535 14, 157, 680

OTHER METHOD OF COMPUTATION

Based on the population estimate of 869,000 for the District of Columbia and by applying a ratio of per capita retail sales to per capita sales tax for both New York and New Orleans, a lower estimate of yield was obtained, as follows:

Based on New York._.
Based on New Orleans__

$12, 332, 400 15, 265, 000

It should be borne in mind that although the New York City yield more closely approximates the probable yield in the District of Columbia, it cannot be considered entirely comparable. The New York tax exempts interstate commerce. However, it has been contended by various legal authorities that Congress, by enacting the District of Columbia sales tax, has the rightful power to tax property purchased in interstate commerce. This would, of course, make the yield in the District of Columbia considerably higher than the estimates.

New York City exemptions: (1) Food; (2) eyeg asses; (3) cigarettes, (4) fuel supplies, ships' equipment, ships' stores; (5) newspapers and periodicals; (6) sales to New York City or semiprivate institutions; (7) sales exempt by State or Federal institutions; (8) automobiles to veterans, material used in converting property into emergency shelter.

New Orleans exemptions: (1) Livestock, poultry, and other farm products direct from the producers; (2) used articles taken in trade; (3) utilities; (4) newspapers; (5) fertilizer and farm products.

Mr. PRESS. This estimate of a $12,000,000 to $15,000,000 yield is predicated on the assumption that the sales tax, if enacted in the District of Columbia, will not be overly burdened with exemptions. Experience in other jurisdictions has indicated that evasion and avoidance of the sales tax is made easier as exemptions are multiplied.

The board of trade is in general agreement with the proposal to exempt food for home consumption and medicines. We believe, however, that the proposed exemption of meals in restaurants up to $1.50 is too high, and that if meals are to be exempted, the maximum should be $1, the figure currently being used in New York.

The board of trade believes that public-utility bills should be exempt. It is suggested also that sales exempt from the act be those not over 15 cents. The bill provides that the Commissioners may exempt sales of 50 cents or less. Various District officials have been discussing the exemption of sales of 25 cents or less. We think that figure should be reduced to 15 cents, and suggest that to the committee, if it does specify the brackets for payment of the tax in the bill, start at a figure no higher than that.

I wish to submit for the record also a tabulation of items exempt from the sales tax in other States, which has been compiled from information on hand in our office.

(The tabulation referred to is as follows:)

Mr. PRESS. I also submit a list and a map showing the States which have a tax on retail sales in effect in those States.

(The documents referred to are as follows:)

STATES WHICH HAVE A TAX ON RETAIL SALES