Minutes 04/15/1958 - Laserfiche WebLink

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is $1.08 per $100.00. This rate is the highest rate in Virginia and seems to have as its origin a purely arbitrary birth. It is not surprising that there is a good deal of com- plaint from this group. The great majority of this group are property ovmors, but many of them feel that a tax: which is out of proportion to all other localities in the state and possibly tl1e nation is not justifiable merely because they will pay it rather than move out of the city. They feel that they are being taxed unjustly, and even to those whO' can afford it without being embarrassed financially it is irksome and creates an unsympathetic attitude t01.-vaJ.~d the taxing authorities. In most comnroni ties we have studied in Virginia, manufacturing establishments are not taxed on the privilege of manufacturing, but in most instances they pay a higher tax on their real estate and machinery, and in fact in mast cities in Virginia they pay a great deal more on their machinery and other praperty than they do in Martinsville. However, a goad many manufacturers honestly feel that this tax upon the volume of business as a license tax places them on an unfavorable com9otitivc basis because they compete almost exclusively ""lith manufacturers in other states. The Committee feeL<3, after a great deal of study, that the manufacturers should pay a reasonable license privilege tax, and that the figure of ~p.13 is not unduly burdensomo at this time. It should be borne in mind that in most instances the manufacturer is required to pay 52% of its earnings in Federal incame ta.;:es C'_nd, so long as this situation cO'ntinuos, tho manufacturer actually pays abaut one-half of the local license taxes, possibly less than that after the state income tax is figured, for the local license tax is deductible. ','fe feel, however, that the manufacturer should not be used to callect a license tax: from merely because of its size. The industrial l)lant adds to' the wealth and payrall of the community. It takes raW' materials and converts them into the finished product which is sold allover the country and other parts af the world. Some of its raw materials are purchased lacally, while its income is g2.thered from the faur corners of tho nation and is largely spent locally. Only a feW" years agO' it was customary for localities to make tax: concessions to industry to induce it to settle in our Virginia cO'mmunities. We have not yet outgrO\m our desire or need to invito and keep industrial plants in our community. NO' license ta..,'{ rate should be maintained in an amount to cause industry seriously to consider not locating here, or to seriously debate whether or not it is being fairly treated. On the other hand, the industry which clOCS not y,rant to pay its ovm fair share of the burden in its community is undesir2.b1e. The industrial organ:i..zation which does not desire and wish to pay its share of good local sanitation, good schoals, adequate streets, and efficient police and fire pratection should not raise its voice in discussing a fair distribution O'f the tax burdeno Under the present economic picture, your Committee feels that the license tax rate for industry is fair and equitable. In the follo'.!ing table vre shOt'T the nine classifications subject to the gross receipts license ta:q aL<3o sho'wn are the 1954 gross receipts J the rate and the yield for each. We recommend as the maximum rate in each colunm the figures shmm under the title, "recommerrled ma:x:im~atell. These figures are, in our opinion, more equitable in relation to each other and in relation to the other existing relatoc1 facts. In the last column is sh01m the yield for 1954 if our recommended maximum rates had bean in force for that year. (3 )