Hon. Senator CARL HAYDEN, Washington, D. C. CHARLES G. BOICE. Nogales, Ariz., July 31, 1941. DEAR MR. HAYDEN: We have been informed by the Arizona Automobile Dealers Association that the new excise tax is soon to be placed before the Finance Committee for debate. Since we are located along the Mexican border, you can readily see how we will be affected should this tax not apply for export business. As you already know, all cars built for export carry a 10-percent export discount, which alone puts us to an extreme disadvantage. Should the Mexican dealers get exemption on the new excise tax it would be impossible for us to do business competitively, as they would have an additional 7-percent advantage. Our export business in the last 12 months runs a little over $60,000, and if we are deprived of this volume due to the present tax question, it will be impossible for us to continue operating in this district. Every car dealer along the Mexican border is confronted with the same problem and we are all vitally interested in the ultimate outcome. We know you will represent us to the very best of your ability, and feel sure that by properly explaining the border situation, that we will receive the neces sary protection from the standpoint of an American merchant doing business in. the good old United States of America. Yours very truly, Hon. CARL HAYDEN, United States Senate, Washington, D. C. CHAS. G. BOICE, J. H. BARBEE, Manager: CHESHIRE MOTOR CO., Nogales, Ariz., August 1, 1941. MY DEAR SENATOR: Due to the writer's absence from the city, I was unable to get the information to you about our sales south of the border that Mr. Henri Behoteguy, of the Arizona Automobile Association, requested that I send you. I have gone back over our records for the calendar years of 1937, 1938, 1939, and 1940, and find that we delivered in old Mexico from Nogales, Ariz., 184 new cars and trucks during those 4 calendar years. The total volume for our establishment was $185,000. We, of course, feel that this business would be lost to us if the excise tax is not included on cars manufactured and shipped to Mexico. Trusting that this is the information you desire and assuring you of our deep appreciation for what you are attempting to do for car dealers along the border, and with sincere personal regards, we are, Yours very truly, CHESHIRE MOTOR CO., Senator BROWN. Does not the Mexican Government collect a tax? Senator HAYDEN. Yes. That is paid anyhow. Mexico has a reguiar import duty which a man buying the automobile in the United States must pay if he takes it into Mexico, but if our domestic excise tax is higher than the export excise tax plus the Mexican tariff rate, the Mexican living along the border will simply not buy his car in the United States. TAX ON TOILET PREPARATIONS Another item that I want to bring to your attention is that section 553 of the revenue bill, as passed by the House of Representatives, imposes a 10 percent tax on the retail sales of toilet preparations and requires that beauty parlors and barber shops shall make monthly returns of toilet preparations used in the treatment of patrons and consider the total quantity used during any such month as though it had been sold at retail. It would appear to me that this latter provision would be difficult, if not impossible, to administer and I believe that the attached protest of Miss Marjory Ricks, of the Tucson Hair Dressers Association, Local 106 of the National Hair Dressers Association, is entirely justified. I am sure the committee will be glad to give sympathetic consideration to the statement of Miss Ricks. (The telegram referred to is as follows:) Senator HAYDEN, United States Senate, Washington, D. C.: TUCSON, ARIZ., August 10, 1941. Calling your attention to House bill 5417. The adoption of section 2404 (b) would inflict a serious hardship on our industry since the use of cosmetic items is merely an incident to our work, revenue being derived almost entirely from the services rendered. A 10-percent tax on the retail price of goods consumed, therefore, would be entirely disproportionate. We wish to call your attention to a previous bill passed in 1929, still in effect, taxing the manufacturer 10 percent. TUCSON HAIR DRESSERS ASSOCIATION, LOCAL 106 OF NATIONAL HAIR DRESSERS. Senator HAYDEN. Paragraph (b) of this section, to which attention is drawn in the telegram as being wholly unworkable, provides: (b) Beauty parlors, and so forth.-For the purposes of subsection (a), if any person operating a barber shop, beauty parlor, or similar establishment, uses any article described in subsection (a) in the treatment of any customer or patron, the total amount so used during any month shall be considered as sold at retail by such person during such month, and the fair retail price of such amount, as determined by the Commissioner, shall be considered to be the price at which so sold. There is now a 10-percent tax on the preparation itself when manufactured, and you could, without difficulty, add a 10-percent tax on the retail sale of the preparation if sold by the bottle, but how can you enforce a provision requiring the barber or the lady who keeps the beauty parlor to look at the bottle at the end of the month and to tell the revenue agent how much was used during the month and how much tax should be paid? I think you ought to turn this matter over to the experts and see if you are not causing some confusion. Senator TAFT. If the barber charged 35 cents for the haircut and 10 cents for putting something on, that is 10 cents, no matter how much the bottle cost. Senator HAYDEN. It says, "The total amount so used during the month." If a barber uses some of Ed Pinaud's hair tonic on my hairyou notice my absence of hair-and I happen to be the only customer upon whose hair that product is used during the month, the barber must calculate the exact amount I used. Maybe he can allow a little for evaporation in the bottle; I don't know. Senator BROWN. I am afraid he would consume the whole bottle. TAX ON OUTDOOR ADVERTISING Senator HAYDEN. With reference to section 557 of the proposed Revenue Act of 1941, I am in receipt of various protests against the imposition of tax upon outdoor advertising, and I am attaching hereto for the information and attention of the committee certain telegrams from organizations in Phoenix, Ariz., which I ask be incorporated into the record. I am sure the Senate Committee on Finance has no desire. to discriminate against any legitimate industry, and I therefore direct your particular attention to the telegrams I attach hereto. (The telegrams referred to are as follows:) Senator CARL HAYDEN, PHOENIX, ARIZ., August 5, 1941. Care United States Senate, Washington, D. C.: The House general tax bill includes special tax on outdoor advertising signs which is an unfair attack on our livelihood and would no doubt curtail work for us. We will appreciate your influence toward eliminating this special tax from the bill before final passage. SIGN & PICTOKIAL PAINTERS LOCAL UNION, Senator CARL HAYDEN, PHOENIX, ARIZ., August 5, 1941. Care United States Senate, Washington, D. C.: The House general tax bill now before the Senate proposes a special tax on outdoor signs which we feel will place a serious curtailment on outdoor advertising causing serious reduction in labor. It seems unfair to single out one advertising medium for special tax and we earnestly solicit your support to eliminate this unjust tax from the general tax bill. LOCAL 120, INTERNATIONAL BILL POSTERS AND BILLERS, Senator CARL HAYDEN, PHOENIX, ARIZ., August 6, 1941. Care United States Senate, Washington, D. C.: Special tax on billboards in general tax bill will curtail labor in that industry and we will appreciate sincerely your efforts to remove this unfair tax from the bill. A. E. WILLIAMS, President, Phoenix Building Trades Council, M. C. LEDBETTER. President, Central Labor Council, Editor and Business Manager, Phoenix Labor Press, JACK PRICE, Secretary-Treasurer, District Council of Carpenters, Business Agent, Painters and Decorators Local 86, Business Agent, Roofers Local Union 135. PHOENIX, ARIZ., August 5, 1941. Senator CARL HAYDEN, Care United States Senate, Washington, D. C.: We are definitely behind our national-defense program and appreciate that the cost must be met by taxation, yet we feel that the proposed billboard tax as now set up by the House Ways and Means Committee in the general tax bill is unfair to our industry and is further unfair in that it proposes to tax only one or two advertising media instead of including all advertising media. Our national association advise they feel the ultimate revenue to be derived from this tax would not be over $2,000,000 instead of the $7,000,000 originally estimated, and the cost of collection, field checking, and so forth, would consume the major portion of the gross income. We also feel that outdoor advertising as a recognized national sales facility should not be penalized by a special tax over and above the regular income-tax corporation taxes, etc., which we will be called upon to pay. If this confiscatory and discriminatory proposal is enacted into law, it will not only affect the owners and operators of outdoor advertising plants but through curtailment will materially reduce property owners' income for sign rental and will also seriously handicap highly skilled labor, which makes it very doubtful that this proposed special tax will be of any assistance whatever to our national program. Kind regards. OUTDOOR ADVERTISING ASSOCIATION OF ARIZONA, TAX ON JEWELRY Senator HAYDEN. Section 553 of the Revenue Act of 1941, as passed by the House of Representatives, imposes a tax of 10 percent of the retail sales' price of jewelry, including clocks, watches, flatware, and hollowware, made of gold or silver, or plated. The jewelers of Arizona do not ask that this tax be eliminated, because they realize that all persons and all industries must bear an increased burden of taxation, but the attached telegrams, which I ask be made a part of the record, point out that jewelry already bears a 2-percent tax in the State of Arizona, and urge that a Federal rate of 5 percent be adopted. Inasmuch as a 5-percent rate was imposed by the Federal Government during the World War, it would appear that this protest is justified and reasonable, and I shall appreciate your giving it your very careful consideration. (The telegrams referred to are as follows:) Senator CARL HAYDEN, PHOENIX, ARIZ., August 12, 1941. Senate Office Building, Washington, D. C.: Could you use influence to modify proposed jewelry tax? Ten percent exorbitant; already have 2-percent State sales tax. Many jewelry commodities are essential, therefore why discriminate against jewelry industry? percent tax appears ample and fair. Thank you for your attention. Five FUNK JEWELRY CO. BISBEE, ARIZ., August 11, 1941. Hon. CARL HAYDEN, United States Senate, Washington, D. C.: We are opposed to a 10-percent tax on jewelry if jewelry is to be taxed. We recommend a levy on 5 percent or less; 10 is too much and will hurt our business. Will appreciate your effort in behalf of a levy of 5 or less. L. L. GILMAN JEWELRY. United States Senator CARL HAYDEN, BISBEE, ARIZ., August 11, 1941. Washington, D. C.: If it is decided to retain a tax on jewelry sales, we are earnestly soliciting your support in securing a rate not to exceed 5 percent. We feel that 10 percent would greatly reduce sales and injure our business. Anything you can do will be greatly appreciated. Senator CARL HAYDEN, L. R. BREHM. PHOENIX, ARIZ., August 12, 1941. Senate Office Building, Washington, D. C.: Appreciate your influence to modify proposed jewelry tax. Heavy 10 percent bad for us because already have 2 percent State sales tax; 80 percent our business watches, clocks, definite necessities. Diamonds practical necessity in marriages; silverware necessity, so why penalize jewelry stores and let dime stores sell inferior substitutes? Fountain pens and many other items just as much necessity as many clothes and household items. Prohibitive tax will cause evasions; income taxes will reduce purchases of our best customers if our business suffers because double taxing then possible tax revenue falls; higher priced clothing, electrical products, furniture can be classified as luxuries, so why single out jewelry? We think general sales tax on all business is fair, otherwise certainly jewelry tax should not be more than 5 percent to avoid wrecking a business that is vital in national welfare. Can you help bring about this fair arrangement? FRANK SEIGLEY. TAX ON RADIO BROADCASTING Senator HAYDEN. The committee has, I know, heard considerable testimony respecting the proposed tax on net time sales of radio. broadcasting stations and networks as contained in section 601 of the Revenue Act. As expressed in the attached telegram from the Gila Broadcasting Co., of Safford, Ariz., this tax would appear to be discriminatory, since it is not applied equally to other advertising media. I hope the committee will give very careful attention to the statement of the Gila Broadcasting Co., which I ask to be made a part of the record. (The telegram referred to is as follows:) Hon. CARL HAYDEN, United States Senator from Arizona, Washington, D. C.: SAFFORD, ARIZ., July 27, 1941. With other members of the National Association of Broadcasters this company feels that the defense-tax bill in its present form taxing radio and billboard and excluding other advertising media is discriminatory. While taxable amount of net sales in bill excludes this company we feel that singling out radio and billboard advertising for defense tax is wrong in principle and solicit your valuable aid in formulating tax bill placing burden equally on all forms of advertising. With sincere regards. TAX ON REFRIGERATORS GILA BROADCASTING CO., Senator HAYDEN. Section 546 of the revenue bill, as passed by the House of Representatives, amends section 3405 of the Internal Revenue Code, to increase to 10 percent the tax now imposed upon the manufacture of household type mechanical refrigerators and makes a new tax applicable to commercial types of refrigerators, including ice-cream cabinets, food and beverage display cases, water coolers, and milkcooler cabinets. I attach a letter from Mr. F. E. Samuels, of Phoenix, Ariz., protesting against this tax imposition, and I hope that the committee will give most careful consideration to his statements. (The letter referred to is as follows:) Hon. CARL HAYDEN, FRANK SAMUELS DISTRIBUTING CO., United States Senate, Washington, D. C. DEAR SENATOR: My attention has just been called to the proposal for instituting a 10-percent excise tax on commercial refrigerators, refrigeration, milk coolers, etc., and I wish to add my protest to the including of such items in the new tax bill which is pending in Congress. |