The Times News

The Times-News Bureau
Sir Walter Hotel
RALEIGH, May 1.—The provision written into the revenue bill by the senate exempting certain basic foodstuffs from the 3 per cent general sales tax is regarded here as the most workable plan of taking some of the sting out of the sales tax than has yet been advanced, and it is meeting with almost unanimous approval among even those members of the legislature who are opposed to even the principle of a sales tax. The senate plan represents a compromise between two different methods of relieving simple foods from the sales tax, and a number of leading members of the house were consulted by the senate members in effecting the compromise plan, and it met with not only the approval of the senate members, but also those members of house who were called in. Thus there is little doubt in the minds of observers here that the senate plan of exempting basic commodities will meet with wide approval in the house, and that the lower body of the general assembly will not attempt to work out a better plan of exempting the poor man's food.

That the senate is thoroughly "sold" on the plan was indicated when that body passed the "compromise" amendment by a unanimous vote, 46 to 0. Quite a few senators who had previously voted against amendments exempting foodstuffs voted for the compromise plan, since they were confident that it is both practical and workable, and will in no way endanger the administration of the general sales tax.

This view was shared by Senator Bailey of Washington, "I did not vote for the earlier amendments exempting foodstuffs," he said, "not because I was opposed to exempting these foods, but because I felt that they were unworkable and would have the effect of tearing down the administration of the sales tax. But the compromise plan that has been worked out is to my mind altogether workable, and I shall gladly support it."

The food exemption amendment now contained in the revenue bill supplants two similar amendments that were previously adopted in the senate. One of these, introduced by Senator Blackstock of Buncombe, and Francis of Haywood, exempted flour, meal, milk and lard. The other, introduced by Senator Hill of Durham, exempted all sales of "necessary foods" up to $1200 and exempted 10 per cent of the tax above that figure. It would have left it up to the commissioner of revenue to determine what foods were "necessary foods."

The commissioner of revenue estimated that either of these amendments would have sliced $1,000,000 from the yield of a sales tax, and that since they overlapped, both would take off about $1,500,000. However, the senate found after studying the two amendments, that neither of them were specific enough, and proponents of the two amendments, together with Senator Rankin, chairman of the finance committee, and interested members of both houses got together and worked out the plan that was finally adopted by the senate.

This plan exempts flour, meal, meat, milk, salt, sugar, coffee and molasses. It goes much further than either of the other two amendments in defining these commodities. For instance flour is exempted, but not cereals; fresh meat is exempted, but not canned meat; lard, but not butter and similar products; milk, but not canned milk; sugar, but not sugar products; molasses, but not cane or maple syrup. It further provides that merchants will have to keep an accurate record of their sales of these products which is acceptable to the department of revenue, and unless they do this, they will be taxed on their entire gross receipts and will not get the benefit of the exemptions.