Henderson Daily Dispatch

Sales Tax Fight Will Be Pressed

Anti's Won't Stop Because of Initial Reverses on Floor of the House.

Daily Dispatch Bureau,
In the Sir Walter Hotel,
BY J. C. BASKERVILL,

Raleigh, March 19.--The anti-sales tax forces, under the leadership of Representative Ralph McDonald, of Forsyth county, lost their first round in the House when it started consideration of the revenue bill Monday afternoon, when they tried to postpone consideration of the income and franchise sections until after consideration of the sales tax section, and when they sought to increase the tax on moving picture theatres. This last

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Sales Tax Fight
Will Be Pressed
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proposal, to increase the tax to five
per cent of the gross receipts of mov-
ing picture theaters that take in more
than $1,500 a month was one of the
several plans proposed by McDonald
and Lumpkin to the finance commit-
tecs and rejected by them. McDonald
frankly admitted it was aimed at
what he termed "chain moving pic-
ture theaters." He estimated the ad-
ditional revenue from this tax at from
$250,000 to $300,000 a year.
The House ,with only 72 of its 120
members present, refused to adopt the
increased tax by a vote of 38 to 26.
It also voted down the motion to de-
fer action on the income and fran-
chise tax sections until after the sales
tax section had been considered, with
a roar of "noes" and without a record
vote. This motion had been made by
Representative Eagles, of Edgecombe
county, and supported by McDonald.
Further indication that the House
intends to retain the sales tax is seen
in the fact that it adopted the new
s ction imposing the sales tax on
room and meal charges made by
hotels without any opposition what-
ever-there was not even any opposi-
tion to this section from Dr. McDon-
ald, Representative Lumpkin or any
of the anti-sales tax group. There
was some discussion and considerable
opposition, however, to the section
that would impose the sales tax on
charges made for room and board by
boarding houses and tourist homes.
Representative Bowie, of Ashe coun-
ty, espoused the cause of the board-
ing house operators and favored re-
ducing the taxes on these all the way
through.
The loss of these first skirmishes
by the anti-sales taxers does not mean
that there will not be any more fight-
ing over the sales tax, however. it
was agreed today, although most ob-
servers concede that it is going to
be impossible for the anti-sales taxers
to remove it from the revenue bill en-
tirely. Many members who are per-
sonally opposed to the principle of the
sales tax are already admitting they
are going to be forced to vote for it
because they are convinced the State
cannot get along without the $9,250,-
000 it is expected to yield each year
and because they are convinced no
other form of taxation can be found
to replace it.
"I do not like the general sales tax
and never have and I opposed it both
in 1931 and 1933, when I was a mem-
ber of the House," Senator Harris
Newman, chairman of the Senate Fin-
ance Committee. said today. "But aft-
cr nearly six weeks of effort here and
after six years of studying State tax-
ations problems I do not see how the
State can operate without it-certain-
ly not until business and industry
show a much greater recovery in the
State than they have so far. So I am
going to vote for the sales tax because
I am convinced there is no place else
to get the revenue unless we go back
to a Statewide property tax-and the
people of the State do not want that."
There is going to be a very strong
effort made. however, to reduce the
rate of the tax from three per cent to
two per cent, it is generally agreed.
One of the indications of this move
is the willingness with which the anti-
sales tax group as well as the ad-
ministration forces accepted the pro-
posals to apply the sales tax to char-
ges for meals and rooms in hotels
and restaurants. tourist homes and
probably boarding houses. It is be-
lieved that this effort to extend the
tax to more fields and thus "broaden
the base" of the tax has been done in
anticipation of the move to reduce the
rate of the tax, and thus make the
loss in revenue smaller.