Tennessee-Continued Davis Cabinet Co., Nashville. Southern Colonial Furniture Manufacturing Co., Nashville. Texas: Woodward Manufacturing Co., Austin. Virginia : The Lane Co., Inc., Altavista. Bassett Furniture Co., Bassett. Bassett Furniture Industries, Bassett. J. D. Bassett Manufacturing Co., Bassett. Bassett Table Co., Bassett. Moore of Bedford, Inc., Bedford. Clore & Hawkins, Brightwood. Universal Moulded Products Corp., Bristol. Vaughan-Bassett Furniture Co., Galax. Flowers Equipment Co., Lawrenceville. Coleman Furniture Corp., Pulaski. Pulaski Veneer & Furniture Corp., Pulaski. Biggs, Richmond. David M. Lea & Co., Richmond. Gravely Furniture Co., Ridgeway Division, Ridgeway. Johnson-Carper Furniture Co., Roanoke. The Lane Co., Inc., Rocky Mount. Rowe Furniture Corp., Salem. Stanley Furniture Co., Stanleytown. The Basic-Witz Furniture Industries, Inc., Staunton. Wytheville Chair Co., Wytheville. West Virginia : Georgetown Galleries, Inc., Huntington. APPENDIX II Distribution of household furniture manufacturing plants, by States, 1954 Source: U.S. Bureau of the Census, "U.S. Census of Manufactures, 1954." 43695-59-10 APPENDIX III 1954 census, household furniture NUMBER OF PLANTS, NUMBER OF EMPLOYEES, AND VALUE OF SHIPMENTS NUMBER OF ESTABLISHMENTS WITH 20 OR MORE EMPLOYEES AND LESS THAN 20 Source: U.S. Bureau of the Census, "U.S. Census of Manufactures, 1954." STATEMENT OF JOHN MARSHALL, EXECUTIVE VICE PRESIDENT OF THE BEVERAGE MACHINERY MANUFACTURERS ASSOCIATION, REGARDING STATE TAXATION OF INTERSTATE BUSINESS This statement is made on behalf of the Beverage Machinery Manufacturers Association, of 1012 14th Street, NW., Washington 5, D.C., whose 16 members manufacture more than 90 percent of the machinery and equipment used in plants processing, packaging, handling, and conveying all types of alcoholic and nonalcoholic beverages. Beverage processing plants are located in all of the States of the Union and one or more plants processing carbonated beverages are found in the cities, towns, and other centers of the consuming population. Most of the beverage equipment companies maintain their general offices, including sales departments, at the manufacturing plant location. In a few cases manufacturers maintain branch sales offices in other States. Sales of beverage equipment are primarily made through salesmen employed by the manufacturing company; however, in a few cases sales are made through jobbers. A majority of the companies engaged in manufacturing beverage equipment are moderate sized companies. By far the greatest percentage of beverage machinery sales are made by the sales personnel of the manufacturer in territory in which the manufacturing company is not qualified to do business as a foreign corporation. As in the Stockham Valve case, the majority of transactions result from orders received by mail at the home office from salesmen of the manufacturing company. In some instances the order is received directly from the beverage company-customer at the home office. Member companies of the Beverage Machinery Manufacturers Association have been experiencing a steady and unfavorable shift in the ratio of employees engaged in production in the direction toward those engaged in paperwork. A further trend in this regard, if a growing number of States begin taxing income from interstate sales, is frightening. We share the apprehension which Mr. Justice Frankfurter expressed in regard to the burden to small and moderate-sized companies being subjected to separate income tax in each of the States with the attendant keeping of books, making returns, storing records, and engaging legal counsel to meet the diverse and variegated tax laws of the 49 States. Unquestionably, the States would have different times for filing returns, different tax structures, different modes for determining net income, and different and often conflicting formulas of apportionment. Only the Congress can effectively meet and solve the situation. The Beverage Machinery Manufacturers Association urgently request this committee to initiate the relief which is so sorely needed by American business in view of the Court decisions. We would favor early enactment of legislation which would prevent State taxation of income derived exclusively from interstate commerce when no office nor goods is maintained within the taxing State. Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, Washington, D.C. ACUSHNET PROCESS CO., New Bedford, Mass., July 17, 1959. DEAR SENATOR BYRD: Recent Supreme Court decisions on the Northwestern States Portland Cement Co. and Stockham Valves & Fittings, Inc., cases make it clear that the States have the power to tax income derived from interstate commerce. Under these decisions the State might tax the income of the corporation even though the only activities of that corporation were limited to having a salesman within the State. For ourselves or any other corporation which distributes its products nationally, the prospect of such taxation is frightening. The burden of preparing tax returns for all of the States is substantial even though the taxes paid might be small. Furthermore, several of the States which have income tax laws already enacted do not have statutes of limitations which limit the application of such taxes. It is, therefore, possible to go back 10 or 20 years with a substantial unforeseen liability resulting. It is our hope that your committee will report legislation which will confine the corporation's income tax liability to States in which it maintains an office or a warehouse or other place of business. Either bill S. 2213 or S. 2281 would accomplish this purpose. Certainly such legislation would remove what is almost an intolerable burden from interstate commerce. It seems important to us that corporations be permitted to send their salesmen throughout the United States without incurring income tax liability as a result of the mere presence of such a salesman in a State. Very truly yours, R. B. YOUNG, President. NATIONAL ASSOCIATION OF TAX ADMINISTRATORS, Hon. HARRY FLOOD BYRD, DEAR SENATOR BYRD: I enclose herewith a resolution which was unanimously adopted at the annual meeting of the National Association of Tax Administrators held in Buffalo, N.Y., July 8-11, 1959. The resolution reflects the views of the tax and revenue officials of the several States with respect to the several proposals presently pending before the Committee on Finance which would have the effect of immediately imposing some restriction on the taxation of income derived from business operations in interstate commerce. The policy strongly recommended by the State tax and revenue officials is that the study proposed by the Select Committee on Small Business precede rather than follow any legislative action. Sincerely, CHARLES F. CONLON, Executive Secretary. RESOLUTION UNANIMOUSLY ADOPTED AT THE ANNUAL MEETING OF THE NATIONAL ASSOCIATION OF TAX ADMINISTRATORS, BUFFALO, N.Y., JULY 8-11, 1959 Whereas various States are confronted with problems of taxation of net income of corporations engaged in interstate commerce: Now, therefore, be it Resolved, That the National Association of Tax Administrators urges the appropriate committee of the Congress of the United States to recommend deferral of congressional legislative attention in the matter of State taxation of net income of corporations engaged in interstate commerce until a study commission set up by the Congress and including appropriate State officials has had opportunity to examine the impact of the recent Supreme Court decisions1 with regard to State income taxation of interstate commerce. STATEMENT OF MR. GEORGE A. KELLY II, PRESIDENT FARM EQUIPMENT INSTITUTE,. CHICAGO, ILL., IN REGARD to State TaxATION OF INTERSTATE COMMERCE My name is George A. Kelly II. I am president of G. A. Kelly Plow Co., of Longview, Tex., which is the oldest established manufacturer west of theMississippi River. I wish to submit this statement, however, in my capacity as president of the Farm Equipment Institute, the great association representing manufacturers of every kind of farm production machinery and of structures and materials handling equipment used on farms. The Farm Equipment Institute has 337 members producing approximately 90 percent of all of the farm machines sold in the United States and Canada. Our nationwide organization is deeply concerned with the problem of Statetaxation of interstate commerce for the following reasons. 1. Most of the institute member companies are relatively small businesses that manufacture specialized types of farm machines that are used in many or all of the States. The companies do not maintain sales offices or warehouses or any other kind of business office in many of the States where their products are sold. If the business of furnishing machines and parts in the 50 States of the Union is taxable in each separate State, I am sure the members of this committee can visualize the burden of accounting and recordkeeping that will be forced upon the manufacturers for sales in States where no office is maintained. This burden would, in time, be carried to the farmer who is our friend and customer. It would constitute an added and excessive drag upon our wholeagricultural economy. As Justice Frankfurter said in his dissenting opinion in the T. V. Williams v. Stockham Valves and Fittings, Inc. decision: "I am assuming, of course, that today's decision will stimulate, if indeed it does not compel, every State of the Union, which has not already done so, to devise a formula of apportionment to tax the income of enterprises carrying on exclusively interstate commerce. As a result, interstate commerce will beburdened not hypothetically but practically, and we have been admonished again and again that taxation is a practical matter." "First. It will not, I believe, be gainsaid that there are thousands of relatively small or moderate size corporations doing exclusively interstate business spread over several States. To subject these corporations to a separate income tax in each of these States means that they will have to keep books, make returns, store. records, and engage legal counsel, all to meet the divers and variegated tax laws. of 49 States, with their different times for filing returns, different tax structures, different modes for determining net income, and, different, often conflicting, formulas of apportionment. This will involve large increases in bookkeeping, accounting, and legal paraphernalia to meet these new demands. The cost of such a farflung scheme for complying with the taxing requirements of the different States may well exceed the burden of the taxes themselves, especially in the case of small companies doing a small volume of business in several States." 2. The Farm Equipment Institute is proud of the fact that its members have always supported the principle of the free movement of goods and services. We are proud of the traditions of our great Union of States which has permitted 1 Northern States Portland Cement Co. v. State of Minnesota, Williams v. Stockham Valves and Fittings, Inc., decided Feb. 24, 1959. |