District of Columbia Institute of Certified Public Accountants, Harry M. Machen, Hon. Harvey G., Representative in Congress from the State of Metropolitan Washington Board of Trade: Exhibit 1-D.C. Government authorized positions (1961-1969)-Exhibit 2-D.C. Government, Positions percent Increase (1961, 1968, 1969)__ Metropolitan Washington Federation of Business Associations, Inc., Jose- Restaurant Association of Metropolitan Washington: Page 190 192 230 229 197 197 218 157 157 Restaurant meals and sales of alcoholic beverages.. Summary of D.C. Tax Proposals. 136 2, 5, 9, 25, 83 194 139 92 21, 27, 77-80, 132, 138 157, 181, 207 3, 5, 23, 26, 31, 83, 157, 182-185, 195, 207-209 14, 20-21 2, 5, 23, 84, 111, 144, 146, 150, 153, 155, 161, 167, 168, 172, 177, 189, 190-192, 194, 221, 229, 231. REVENUE PROPOSALS THURSDAY, APRIL 25, 1968 HOUSE OF REPRESENTATIVES, COMMITTEE ON THE DISTRICT OF COLUMBIA, Washington, D.C. The Committee met, pursuant to notice, at 11:00 a.m. in Room 1310, Longworth House Office Building, Honorable John L. McMillan (Chairman of the Committee), presiding. Present: Representatives McMillan (presiding), Abernethy, Whitener, Sisk, Fuqua, Fraser, Kyros, Nelsen, Horton, Broyhill, Winn, Gude, and Steiger. Also present: James T. Clark, Clerk; Hayden S. Garber, Counsel; Donald Tubridy, Minority Clerk; Leonard D. Hilder, Investigator. The CHAIRMAN. The Committee will come to order. We welcome the Commissioner and Deputy Commissioner and the Chairman of the Council here with us this morning; also Mr. Back. We are always happy to have you visit our Committee, and as I have previously stated, you have an open invitation to visit with us in executive sessions or any time you care to come to the Committee or to my private office. The CHAIRMAN. At this time I would like to welcome our new member, Mr. Kyros. Certainly he will prove to be a great asset to this Committee. Mr. KYROS. Thank you, sir. I am very pleased to be here with you. The CHAIRMAN. Without objection, the proposed bill, H.R. 16361, will be made a part of the record at this point, together with the letters of the Commissioner of the District of Columbia to the Speaker of the House, dated February 20, 1968 and March 27, 1968, requesting this proposed revenue legislation. Also staff memorandum summarizing the proposed changes in present law. (H.R. 16361, 90th Cong., 2d sess., by Messrs. McMillan, Sisk, Nelsen and Broyhill, on April 1, 1968) A BILL To provide additional revenue for the District of Columbia, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "District of Columbia Revenue Act of 1968." TITLE I-FEDERAL PAYMENT AUTHORIZATION SEC. 101. In recognition of the unique character of the District of Columbia as the Nation's Capital City, regular annual payments are hereby authorized to be appropriated from revenues of the United States to cover the proper Federal share of the expenses of the government of the District, and such annual payments, when appropriated, shall be paid into the general fund of the District. The annual payment authorized shall be an amount equal to 25 per centum of the sum of all tax revenues, including that portion of the motor vehicle registration fees but excluding fees from licenses and other charges, which the Commissioner of the District of Columbia estimates will be credited during each fiscal year to the general fund of the District of Columbia, including, by way of illustration and not as a limitation, revenues estimated to be derived from those categories of taxes (including penalties and interest thereon) of which the following are representative: Property taxes, both real and personal; sales and gross receipts taxes; individual income taxes; corporation and unincorporated business franchise taxes; real estate deed recordation taxes; inheritance and estate taxes; and so much of the motor vehicle registration fees as the District of Columbia Council from time to time determines shall be credited to the general fund, as authorized by section 3(d) of title IV of the Act approved August 17, 1937 (50 Stat. 673, 681), as amended (D.C. Code, sec. 40–103(d)). SEC. 102. The Commissioner of the District of Columbia shall annually compute the amount of the Federal payment authorized to be appropriated under this title, and the amount of such authorization so computed, shall be submitted to the Bureau of the Budget with each regular budget of the District of Columbia, and, as approved by the Director of the Bureau of the Budget, shall be submitted to the Congress. Each such computation shall be determined on the basis of estimates of the tax revenues referred to in section 101 of this title which are expected to be credited to the general fund of the District of Columbia during the fiscal year for which the annual payment is being computed: Provided, That the amount so determined shall be subject to review after such fiscal year, and if the Federal payment appropriated on the basis of the amount so determined differs from the amount determined on the basis of revenues actually received and credited to the general fund, the Federal payment authorization for the second year succeeding such fiscal year shall be adusted to the extent of such difference. SEC. 103. Article VI of the District of Columbia Revenue Act of 1947 (61 Stat. 361), as amended (D.C. Code, secs. 47-2501a and 47-2501b), is repealed. SEC. 104. This title may be cited as the "District of Columbia Federal Payment Authorization Act of 1968". SEC. 105. This title shall take effect with respect to fiscal years beginning on and after July 1, 1968. TITLE II- AMENDMENTS TO THE DISTRICT OF COLUMBIA INCOME AND FRANCHISE TAX ACT OF 1947 SEC. 201. Section 3 of title VI of the District of Columbia Income and Franchise Tax Act of 1947 (D.C. Code, 1967, sec. 47-1567b(a)), is amended to read as follows: "SEC. 3. IMPOSITION AND RATES OF TAX.-There is hereby annually levied and imposed for each taxable year upon the taxable income of every resident a tax at the following rates: "Two per centum of the first $1,000 of taxable income. "Six per centum on the taxable income in excess of $10,000." SEC. 202. Section 1 of title VIII of said Act (D.C. Code, 1967, sec. 47-1574), is amended by striking therefrom the last sentence. SEC. 203. Subsection 7(a) (4) of title XII of said Act (D.C. Code, 1967, sec. 47-1586f (a) (4)) is amended to read as follows: "(4) EMPLOYERS.-Every employer required to deduct and withhold tax under this article shall make a return, and pay to the District the tax required to be withheld under this article for such periods and at such times as the District of Columbia Council may prescribe." SEC. 204. Title XIV of the District of Columbia Income and Franchise Tax Act of 1947, as amended (D.C. Code, 1967, sec. 47-1591 through sec. 47–1591f), is amended to read as follows: "TITLE XIV-FILING FEES "DECTION 1. REQUIREMENT.-Every corporation and unincorporated business required to file a franchise tax return under this article shall annually at the time required for the filing of the return pay a filing fee of $15 which such fee shall be in addition to the amount of tax due." SEC. 205. Any person who, pursuant to the provisions of subsection (b) of section 1 of title XIV of the District of Columbia Income and Franchise Tax Act of 1947, as heretofore amended (D.C. Code, 1967, sec. 47-1591(b)), was issued a trade, business, or professional license for the calendar year 1968, shall, upon filing a claim therefor in the manner provided by subsection (a) of section 11 of title XII of said Act (D.C. Code, 1967, sec. 47-1586j(a)) be entitled to a refund without interest of the amount of the fee paid by him for such license. No such refund shall be allowed after ninety days from the date of enactment of this Act unless before the expiration of such period a claim therefor is filed by the licensee. The remedy provided by this section shall be exclusive of any other remedy authorized or provided by law. SEC. 206. EFFECT OF REPEAL OR AMENDMENT (a) EXISTING RIGHTS AND LIABILITIES. The repeal or amendment of any provision of the District of Columbia Income and Franchise Tax Act of 1947, as heretofore amended, shall not affect any act done or any right accruing or accrued, or any suit or proceeding had or commenced in any civil cause before such repeal or amendment, but all rights and liabilities under such Act shall continue, and may be enforced in the same manner and to the same extent, as if such repeal or amendment had not been made. (b) CRIMES AND PENALTIES.-All offenses committed, and all penalties incurred, under any provision of law hereby repealed or amended, may be prosecuted and punished in the same manner and with the same effect as if this Act had not been enacted. SEC. 207. Wherever in this title any reference is made to the "Council," such reference shall be deemed to be to the District of Columbia Council established under section 201, part II of Reorganization Plan Numbered 3 of 1967. SEC. 208. EFFECTIVE DATES.-The amendments made by sections 201 and 202 of this title shall be applicable to taxable years beginning after December 31, 1967. The amendments made by sections 203, 205, 206, and 207 of this title shall take effect on the date of enactment of this Act. The amendment made by section 204 of this title shall take effect at the time after December 31, 1968, when the returns to which the amendment made by section 204 refers are required to be filed. TITLE III-AMENDMENTS TO THE DISTRICT OF COLUMBIA SALES TAX ACT AND THE DISTRICT OF COLUMBIA USE TAX ACT SEC. 301. Section 107 of the District of Columbia Sales Tax Act (63 Stat. 112, ch. 146, title I), as amended (D.C. Code, 1967, sec. 47-2601, par. 7) is amended by striking after the words "Provided, however," the words "That the word 'food' shall not include spiritous or malt liquors and beer." and by inserting in lieu of thereof the words "That the word 'food' shall not include spiritous or malt liquors, beer, and wines." SEC. 302. Subsection (a) of section 114 of the District of Columbia Sales Tax Act (63 Stat. 112, ch. 146, title I), as amended (D.C. Code 1967, sec. 47-2601, par. 14(a)) is amended by adding to said subsection the following numbered paragraph: "(7) (A) The sale of or charges to subscribers for local telephone service. "(B) The term 'local telephone service' means— "(1) the access to a local telephone system, and the privilege of telephonic quality communication with substantially all persons having telephone or radio telephone stations constituting a part of such local telephone system, and "(2) any facility or service provided in connection with a service described in paragraph (1). The term 'local telephone service' does not include any service which is a 'toll telephone service' or a 'private communication service' as defined in subsections (C) and (D); nor does it include any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to such installation. (C) The term 'toll telephone service' means "(1) a telephonic quality communication for which (A) there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication and (B) the charge is paid within the United States, and "(2) a service which entitles the subscriber, upon payment of a periodic charge (determined as a flat amount or upon the basis of total elapsed transmission time), to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone |