"(c) The Commissioners are authorized and empowered to extend for cause shown the time for filing a return for a period not exceeding thirty days.

"SEC. 5. (a) For the privilege of engaging in business in the District during any fiscal year after June 30, 1938, each person so engaged shall pay to the Collector of Taxes a tax measured upon gross receipts in excess of $2,000 derived from such business for the calendar year immediately preceding, as follows:

6

"1. That with respect to dealers in goods, wares, and merchandise, where the spread or difference between the cost of goods sold and the sale price does not exceed 3 per centum of the cost of the goods sold, one-tenth of 1 per centum of such dealers' gross receipts; where such spread or difference exceeds 3 but does not exceed 6 per centum, two-tenths of 1 per centum of such dealers' gross receipts; and where such spread or difference exceeds per centum but does not exceed 9 per centum, three-tenths of 1 per centum of such dealers' gross receipts; and where such spread or difference exceeds 9 per centum, four-tenths of 1 per centum of such dealers' gross receipts. The cost of such goods, wares, and merchandise sold shall be determined after considering the inventories both at the beginning and at the end of the period covered by the return and purchases made during such period, and such inventories shall be valued at cost or market, whichever is lower, and shall be in agreement with the inventories as reflected by the books of such dealers. The cost of goods, wares, and merchandise shall be the actual purchase price, including the prevailing freight rate to the dealer's place of business in the District. The burden of proving under which classification the taxpayer shall be taxed shall be upon the taxpayer, and, unless the taxpayer shall by proof satisfactory to the assessor show to the contrary, the spread or difference between the cost of goods, wares, and merchandise sold by the taxpayer and the selling price of such goods, wares, and merchandise shall be presumed to be in excess of 9 per centum of the cost of the goods, wares, and merchandise sold, and the taxpayer shall be taxed accordingly.

"2. All persons, other than those mentioned in subparagraph (1) of this paragraph shall pay a tax equal to four-tenths of 1 per centum of the gross receipts derived by such persons from such business.

"(b) If a taxpayer shall not have been engaged in business during the entire calendar year upon the gross receipts of which the tax imposed by this title is measured, he shall pay the tax imposed by this title measured by his gross receipts during the period of one year from the date when he became so engaged; and if such taxpayer shall not have been so engaged for an entire year prior to the beginning of the fiscal year for which the tax is imposed then the tax imposed shall be measured by his gross receipts during the period in which he was so engaged multiplied by a fraction, the numerator of which shall be 365 and the denominator of which shall be the number of days in which he was so engaged.

"(c) If a person liable for the tax during any year or portion of a year for which the tax is computed acquires the assets or franchises of or merges or consolidates his business with the business of any other person or persons, such person liable for the tax shall report, as his gross receipts by which the tax is to be measured, the gross receipts for such year of such other person or persons together with his own gross receipts during such

year.

"SEC. 6. National banks and all other incorporated banks and trust companies, street railroad, gas, electric lighting, and telephone companies,

companies incorporated or otherwise, who guarantee the fidelity of any individual or individuals, such as bonding companies, companies who furnish abstracts of title, savings banks, and building and loan associations which pay taxes under existing laws of the District upon gross receipts or gross earnings, and insurance companies which pay a tax upon premiums shall be exempt from the provisions of this title.

"SEC. 7. (a) The taxes imposed hereby shall be due on the 1st day of July of the fiscal year for which such taxes are assessed and may be paid, without penalty, to the collector of taxes of the District in equal semiannual installments in the months of October and April following. If either of said installments shall not be paid within the month when the same is due, said installment shall thereupon be in arrears and delinquent and there shall be added and collected to said tax a penalty of 1 per centum per month upon the amount thereof for the period of such delinquency, and said installment with the penalties thereon shall constitute a delinquent

tax.

"(b) Any tax on tangible personal property levied against, and paid by, the taxpayer to the District, within the time prescribed by law for the payment of such tax by the taxpayer, shall be allowed as a credit against the tax imposed by this title for the taxable year in which such tax on tangible personal property is paid.

"SEC. 8. If a return required by this title is not filed, or if a return when filed is incorrect or insufficient and the maker fails to file a corrected or sufficient return within twenty days after the same is required by notice from the assessor, the assessor shall determine the amount of tax due from such information as he may be able to obtain, and, if necessary, may estimate the tax on the basis of external indices such as number of employees of the person concerned, rentals paid by him, stock on hand, and other factors. The assessor shall give notice of such determination to the person liable for the tax. Such determination shall fix the tax, subject however to appeal as provided in sections 3 and 4 of title IX of this Act.

"SEC. 9. Any person failing to file a return or corrected return within the time required by this title shall be subject to a penalty of 10 per centum of the tax due for the first month of delay plus 5 per centum of such tax for each additional month of delay or fraction thereof.

"SEC. 10. Any notice authorized or required under the provisions of this title may be given by mailing the same to the person for whom it is intended by mail addressed to such person at the address given in the return filed by him pursuant to the provisions of this title, or if no return has been filed then to his last-known address. The mailing of such notice shall be presumptive evidence of the receipt of the same by the person to whom addressed. Any period of time which must be determined under the provisions of this title by the giving of notice shall commence to run from the date of mailing such notice.

"SEC. 11. The taxes levied hereunder and penalties may be assessed by the assessor and collected by the collector of taxes of the District in the manner provided by law for the assessment and collection of taxes due the District on personal property in force at the time of such assessment and collection.

"SEC. 12. Any person engaging in or carrying on business without having a license so to do, or failing or refusing to file a sworn report as required herein, or to comply with any rule or regulation of the Commissioners for the administration and enforcement of the provisions of this

title shall, upon conviction thereof, be fined not more than $300 for each and every failure, refusal, or violation, and each and every day that such failure, refusal, or violation continues shall constitute a separate and distinct offense. All prosecutions under this title shall be brought in the police court of the District on information by the corporation counsel or his assistant in the name of the District.

"SEC. 13. The Bureau of Internal Revenue of the Treasury Department of the United States is authorized and required to supply such information as may be requested by the Commissioners relative to any person subject to the taxes imposed under this title.

"SEC. 14. Except in accordance with proper judicial order or as otherwise provided by law, it shall be unlawful for the Commissioners or any person having an administrative duty under this title to divulge or make known in any manner the receipts or any other information relating to the business of a taxpayer contained in any return required under this title. The persons charged with the custody of such returns shall not be required to produce any of them or evidence of anything contained in them in any action or proceeding in any court, except on behalf of the United States or the District, or on behalf of any party to any action or proceeding under the provisions of this title, when the returns or facts shown thereby are directly involved in such action or proceeding, in either of which events the court may require the production of, and may admit in evidence, so much of such returns or of the facts shown thereby, as are pertinent to the action or proceeding and no more. Nothing herein shall be construed to prohibit the delivery to a taxpayer, or his duly authorized representative, of a certified copy of any return filed in connection with his tax, nor to prohibit the publication of statistics so classified as to prevent the identification of particular returns and the items thereof, or the inspection by the corporation counsel of the District, or any of his assistants, of the return of any taxpayer who shall bring action to set aside or review the tax based thereon, or against whom an action or proceeding has been instituted for the collection of a tax or penalty. Returns shall be preserved for three years and thereafter until the Commissioners order them to be destroyed. Any violation of the provisions of this section shall be subject to the punishment provided by section 12 of this title.

"SEC. 15. This title shall not be deemed to repeal or in any way affect any existing Act or regulation under which taxes are now levied, or any license or license fees are now required.

"SEC. 16. Sections 2 and 3 of this title shall be effective upon the approval of this Act. The remaining sections of this title shall be effective July 1, 1938. This title shall expire June 30, 1939.

"SEC. 17. Appropriations are hereby authorized for such additional personnel and expenses as may be necessary to carry out the provisions of this Act.

"SEC. 18. The proper apportionment and allocation of gross receipts with respect to sources within and without the District may be determined by processes or formulas of general apportionment under rules and regulations prescribed by the Commissioners."

(b) The amendment made by this section shall not affect the taxes imposed and the licenses required by the provisions of title VI of such Act for the fiscal year ending June 30, 1938.

And the Senate agree to the same.

H. Repts., 75-3, vol. 2—62

Amendment numbered 4:

That the House recede from its disagreement to the amendment of the Senate numbered 4, and agree to the same with an amendment, as follows:

In lieu of the matter proposed to be inserted by the Senate amendment insert the following:

"SEC. 6. There is hereby authorized to be appropriated out of the revenues of the District of Columbia the sum of $10,000, for the employment of professional and clerical services in connection with a survey and study of the entire tax structure of the District of Columbia, including taxes paid by public utilities, to be made under the direction of the Joint Committee on Internal Revenue Taxation. Such sum shall be available for necessary expenses, and for personal services without regard to civilservice requirements, the Classification Act of 1923, as amended, or section 3709 of the Revised Statutes. A report of such survey, with recommendations, shall be made to Congress not later than January 15,

1939."

And the Senate agree to the same.

Amendment numbered 6:

That the House recede from its disagreement to the amendment of the Senate numbered 6, and agree to the same with an amendment, as follows:

On page 18 of the Senate engrossed amendments, in line 23, strike out "in the District for at least five years", and in lieu thereof insert for at least ten years; and the Senate agree to the same.

Amendment numbered 36:

That the House recede from its disagreement to the amendment of the Senate numbered 36, and agree to the same with an amendment, as follows:

In lieu of the matter proposed to be inserted by the Senate amendment, insert it; and the Senate agree to the same.

STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE

The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendments of the Senate. to the bill (H. R. 10066) to amend the District of Columbia Revenue Act of 1937, and for other purposes, submit the following statement in explanation of the effect of the action agreed upon by the conferees and recommended in the accompanying conference report:

Amendments Nos. 1, 3, 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 39, 40, 41, and 42: These amendments are of a clerical or clarifying nature. The House recedes on all these amendments with an amendment on No. 36 which makes a further clerical change.

Amendment No. 2: The House bill provided that title VI of the District of Columbia Revenue Act of 1937, imposing a business privilege tax, be continued in effect for the limited purposes of enforcing tax liability and penalties imposed and incurred during the effective period of that title; and to require the filing of returns required by that title. The Senate amendment reenacts title VI of the District of Columbia Revenue Act of 1937 for an indefinite period of time, with clarifying alterations and additions, and with graduated rates of taxation with respect to dealers in merchandise, in lieu of a flat rate as provided in title VI of the Revenue Act of 1937. In addition, the Senate amendment reduced the exemption of gross receipts from $2,000 to $1,000. The conference report adopts the provisions of the Senate amendment with the following changes: The conference report includes a clerical provision for the effective date of section 5 of the act. The exemption of gross receipts from the measurement of tax is increased from $1,000 to $2,000. Sections 2 and 3 of title VI are made effective upon the approval of the act. Title VI shall expire June 30, 1939. To clarify subsection (b), section 4, the Commissioners are authorized to examine the books, papers, etc., of any person bearing upon any matter required to be included in any return.

Amendment No. 4: The Senate amendment provides that title VII of the District of Columbia Revenue Act of 1937 be amended by providing for an appropriation of $10,000 for the employment of professional and clerical services in connection with a survey and study of the tax structure of the District of Columbia to be made under the direction of the Commissioners of the District of Columbia. The conference report adopts the provisions of the Senate amendment with a change providing that the survey and study of the tax structure of the District be made under the direction of the Joint Committee on Internal Revenue Taxation.

Amendment No. 6: The House bill provided for the establishment of a Board of Tax Appeals for the District of Columbia, consisting of three members, two of whom shall be attorneys in active practice of law for at least 5 years next preceding their appointment, one of whom shall be chairman of the Board, and one member a certified