Roberts, James W., chairman, Government Relations Committee, National Association of Wholesalers; accompanied by Harold Halfpenny, general counsel, National Association of Wholesalers__ Roland, Robert L., collector of revenue, State of Louisiana__. Saltonstall, Hon. Leverett, U.S. Senator from the State of Massachusetts__ Schreyer, Charles, Manufacturers Association of Connecticut, Inc.---- Snow, John M., executive vice president, National Association of Furniture Sparkman, Hon. John, U.S. Senator from the State of Alabama; accom- Strout, Sewall, vice chairman, Tax and Fiscal Policies Committee, New England Council for Economic Development---- Taylor, Don H., president, New York Employing Printers Association, Taylor, Tyre, general counsel, Southern States Industrial Council.. Weber, Louis M., counsel, Fur Wholesalers Association of America, Inc. White, Richard P., executive vice president, American Association of Wolf, Myron B., president, National Council of Salesmen's Organizations, 4 122 LETTERS AND TELEGRAMS Arnold, Lincoln, chairman, Tax Committee, American Mining Congress, Barber, Arthur B., tax counsel, the State of Wisconsin, to Charles F. Bleser, C. M., treasurer, the American Brass Co., Waterbury, Conn., to Breaden, R. E., president, the Treaty Co., Greenville, Ohio, to chairman.- Brott, J. Olney, general counsel, the American Bankers Association, to 101 229 160 Cox, Millard, counsel, Kentucky Distillers Association, to chairman_- Coyne, Robert W., president, Distilled Spirits Institute, Inc., to chair- David, Douglas, president, North Pacific Lumber Co., to Hon. Richard L. 114 Draper, John H., Jr., president, Draper Bros. Co., Canton, Mass., to 102 Eaton, George S., executive vice president, National Tool & Die Associa- 112 Fleishman, Ken, Wilson River Lumber Co., Portland, Oreg., to Hon. 113 Haden, Harry H., Alabama State Department of Revenue, to Hon. Ar- Halfpenny, Harold, Chicago, Ill., to chairman_ Hanahan, M. L., Jr., the Home Guano Co., Dothan, Ala., to chairman_ Hassett, W. T., vice president, Dixie Lumber Co., Inc., Hagerstown, Md., Helm, John J., president, Cascade Pacific Lumber Co., Portland, Oreg., to 156 to com- 173 Hirsch, Harold S., president, White Slag Manufacturing Co., Portland, Oreg,, to Hon. Richard L. Neuberger... Hirsch, Harold S., president, White Slag Manufacturing Co., Portland, Hudson, H. R., executive vice president, National Wooden Box Association, Hull, D. R., president, Electronic Industries Association, Washington, Kirchner, J. E., director of revenue, State of Kansas, to Hon. Frank Mighdoll, M. J., administrator, National Association of Waste Material Dealers, Inc., New York, N. Y., to chairman_ Morris, D. F., president, the Mead Corp., Dayton, Ohio, to chairman_. Ormsby, Ross R., president, Rubber Manufacturing Industry, New York, Pomper, V. H., vice president, H. H. Scott, Inc., Maynard, Mass., to 161 Powell, Hon. Wesley, Governor of New Hampshire, to chairman_ 264 112 Resh, J. A., secretary, the W. T. Raleigh Co., Freeport, Ill., to chairman__ Rogers, Watson, president, National Food Brokers Association, to chair- man. Rubenstein, Robert M., executive director, National Fruit & Syrup Manu- Ryan, J. T., executive vice president, Southern Furniture Manufacturers' Scallon, Edwin T., Associated Industries of Rhode Island, Inc., Providence, Schoonmaker, T. R., executive secretary, Association of Food Distributors, Page 255 132 172 153 112 102 Seebach, Donald F., Treemount Forest Products Co., Portland, Oreg., to Shearer, Walter V., president, the Plastic Coating Corp., Holyoke, Mass., Shepperd, Howard, president, New York Clearing House, to chairman_ Snoke, Harmon E., executive vice president, the Manufacturers Associa- 175 118 118 Stewart, Charles W., president, Machinery & Allied Products Institute, to 266 Stoffel, Edward L., independent distributors, to Hon. Richard L. 113 Strout, Sewall G., chairman, Tax and Fiscal Policy Committee, New 97 Teague, Charles E., Teague Lumber Co., Eugene, Oreg., to chairman_. Thomson, A. Lindsay, president, the Terry Steam Turbine Co., Hartford, Titus, Warren I., Jr., New York, N.Y., to chairman, and enclosure--- 112 277 160 172 166 Worley, John K., general counsel, Pharmaceutical Manufacturers Associa- 271 Yilk, Francis W., promotional manager, Heinzman Sons, Grand Island, 158 Young, R. B., president, Acushnet Process Co., New Bedford, Mass., to 141 STATE TAXATION OF INTERSTATE COMMERCE TUESDAY, JULY 21, 1959 U.S. SENATE, COMMITTEE ON FINANCE, Washington, D.C. The committee met, pursuant to call, at 10:15 a.m., in room 2221, New Senate Office Building, Senator Harry Flood Byrd (chairman) presiding. Present: Senators Byrd, Kerr, Douglas, Gore, Talmadge, Williams, Carlson, Butler, Cotton, and Curtis. Also present: Elizabeth B. Springer, chief clerk. The CHAIRMAN. The committee will come to order. The bills before the committee are Senate Joint Resolution 113, S. 2213, and S. 2281. All of them relate to the subject of State taxation of interstate commerce. (The bills referred to are as follows:) [S.J. Res. 113, 86th Cong., 1st sess.] JOINT RESOLUTION To bring about greater uniformity in State taxation of business income derived from interstate commerce; to establish a Commission on Taxation of Interstate Commerce; and for other purposes Whereas the Constitution vests in the Congress the power to regulate interstate commerce; and Whereas a free and unimpeded flow of commerce between the several States is vital to the economy and the general well-being of the Nation; and Whereas the practice, presently engaged in by a number of the several States, of imposing a tax upon the income of businesses engaged in interstate commerce which operate or do business in such States has resulted in subjecting such businesses to a multiplicity of income tax laws which are independently imposed, lack uniformity in substance and application, and are often inconsistent in theory and administration; and Whereas such practice has tended to impede, obstruct, restrain, and embarrass the free flow of commerce between the several States; and Whereas in order to insure the free and uninterrupted flow of commerce between the several States, it is imperative that the several States be permitted to impose income taxes upon businesses engaged in interstate commerce only in accordance with reasonable and uniform standards: Now, therefore, be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, TITLE I-TEMPORARY MINIMUM STANDARD SEC. 101. No State or political subdivision thereof shall impose a tax upon the income of any business engaged in interstate commerce for any taxable year unless, during such year, such business has maintained a stock of goods, an office, warehouse, or other place of business in such State or has had an officer, agent, or representative who has maintained an office or other place of business in such State. SEC. 102. The provisions of section 101 shall apply only with respect to taxable years which end after December 31, 1958, and which begin before January 1, 1961. 1 TITLE II-COMMISSION ON STATE TAXATION OF INTERSTATE COMMERCE DECLARATION OF PURPOSE SEC. 201. It is the purpose of this title to provide for the formulation of a concrete proposal for an equitable solution to the problems experienced (1) by businesses (particularly small businesses) engaged in interstate commerce as the result of their being subjected to a multiplicity of income taxes independently imposed by the various States in which they operate or do business, and (2) by the various States in which such businesses operate or do business in assuring that such businesses shall be required to asume a fair share of the tax burden imposed upon the residents of, and businesses located within, such State. ESTABLISHMENT OF COMMISSION SEC. 202. (a) In order to carry out the purposes of this title, there is hereby established a Commission to be known as the "Commission on State Taxation of Interstate Commerce" (hereinafter referred to as the "Commission") which shall be composed of five members to be appointed by the President, by and with the advice and consent of the Senate. The members of the Commission shall be individuals from private life who are familiar with the problems connected with State taxation of income of businesses (particularly small businesses) engaged in interstate commerce and who, by reason of education, training, or experience, are peculiarly qualified to carry out the duties of the Commission. (b) The Commission shall elect a Chairman from among its members. (c) Any vacancy occurring in the Commission shall not affect its powers, but shall be filled in the same manner in which the original appointment was made. (d) Three members of the Commission shall constitute a quorum, except that the Commission may establish a lesser number as a quorum for the purpose of taking sworn testimony. (e) Members of the Commission shall be compensated at the rate of $20,000 per annum and shall be reimbursed for any travel, subsistence, or other necessary expenses incurred by them while engaged in the actual performance of the duties of the Commission. (f) Service of an individual as a member of the Commission or employment of an individual by the Commission as an attorney or employee in any business or professional capacity, on a part-time or full-time basis, with or without compensation, shall not be considered as service or employment of such individual within the provisions of section 281, 283, 284, or 1914 of title 18 of the United States Code, or section 190 of the Revised Statutes (5 U.S.C. 99). STAFF OF THE COMMISSION SEC. 203. (a) The Commission shall have the authority to appoint, without regard to the civil-service laws and the Classification Act of 1949, as amended, such personnel as it deems necessary to enable it to discharge its duties under this title. (b) The Commission may procure, without regard to the civil-service laws and the Classification Act of 1949, as amended, temporary and intermittent services to the same extent as is authorized for the departments by section 15 of the Act of August 2, 1946 (60 Stat. 810), but at rates not to exceed $50 per diem for individuals. DUTIES OF THE COMMISSION SEC. 204. (a) The Commission shall conduct a thorough and complete study and investigation of all matters pertaining to the taxation by States of the income of businesses (particularly small businesses) engaged in interstate commerce for the purpose enabling the Commission to formulate and recommend to the Congress a concrete proposal for legislation providing for the establishment of uniform standards which the States will be required to observe in imposing income taxes upon businesses engaged in interstate commerce. Such standards shall be designed to permit any State to require businesses engaged in interstate commerce which operate or do business in such State to assume a fair share of the tax burden of such State, but shall, at the same time, be designed to protect such businesses (particularly small businesses) from being unduly hampered or embarrassed in their operations by reason of being subjected to a multiplicity of |