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AUDITOR OF PUBLIC ACCOUNTS
HOUSE RESOLUTION IN RELATION TO THE AMOUNT OF TAX RE-
COMMONWEALTH OF VIRGINIA,
RICHMOND, VA. December 23, 1878.
Hon. IfENRY C. ALLEN, Speaker of the House of Delegates:
I beg leave to submit the following report of the operations of the “Moffett .Liquor Law” from its commencement down to the first day of November last.
In my report to the last General Assembly I estimated that the assessments under this law would reach the sum of $512,184.27 as against $262,195.25, the total tax assessed against liquor dealers licensed under the act of the preceding year. The result has been as follows, to wit: Specific license tax..........
$190,271 11 Registered sales...............
282,563 0% Total (see annexed table for details)...
$172,834 14 Showing an excess of $210,638.89 over the assessments
of the preceding year, deducting rebates allowed
under the law as follows: From May 1, 1877 to April 30, 1878– Specific.......
$52,741 10 Registers .........
20,763 49 And estimating from May 1 to November 1, 1878— Specific....
$26,370 55 Total rebates............
$99,877 14 We have the following as the result ...........
$372,957 00 Or $110,761.75 still in excess of the results of the old law.
It is proper to remark that the rebates upon the registers can never occur again except in the case of beginners, and I respectfully suggest that this feature of the law be repealed as useless. It served its purpose in a measure when the system was inaugurated, but it is now of no value, and serves only at times to embarrass the dealer and always to encumber the books of both the commissioners of the revenue and treasurers with unnecessary writing. The instruments are the property of the state. The result, as shown by the registered sales, with all the difliculties and embarrassments that inevitably attach to the workings of a new and untried law, must be gratifying to the friends of the measure. This result, shewing that from these sales alone an access of revenue has been realized over the entire assessments of the former year of $110,761.75, as I have stated above.
The enquiry has frequently been made at this oflice by persous residing outside as well as within the limits of the state in regard to the efficiency of the "Moffett law” as an agency for the collection of revenue. From the beginning I have never doubted its power in this respect, and the results, partial though they be, of the workings of the experiment, have strongly contirmed me in my first impressions. The law, however, needs radical changes which I will renture to suggest. Before I proceed to this, however, I beg to say one word in respect to the instrument itseli. Many registers, new and improved, have been presented to me to be substituted for the one now in use. To such propositions I have had but one reply: 1st. That the power of substitution did not rest in me. 2nd. That if it did I could not consent to involve the state in any additional expense in the purchase of the substituted instrument since the Moffett and Deane" invention, when well made, answers, all the purposes of secure and accurate registration. I beg to make the following recommendations touching the matter of changes in the law.
1. Require that the specific license tax be paid in full, at the time the license issues. The present law requires the payment of one-half at that time, and postpones the payment of the residue imtil six months thereafter. This provision is greatly detrimental to the interests of the state. Dealers may move away or fail in business, or refuse to pay, and thus render the collection of the second instalment a matter of doubt, perhaps involving the commonwealth in interminable litigation, which should be avoided. The payment of the entire specific tax as a condition precedent to the prosecution of business would secure the tax to the state and avoid all such litigation. Should the license issue at any period within the year it would be proper to allow the specific tax to be pro-rated according to the length of time the license has to run.
2. Allow no rebate of any kind.
3. I recommend that but one kind of register be used by the dealer, and that the distinction between alcoholic and malt liquor registers be abolished. The reason for this change is obvious. Where two registers are used, one of each class, and alcoholic drinks are sold, the temptation to a dealer, disposed to do wrong, to turn the crank of the malt liquor register is a strong one ; and this could very frequently be done without detection. To avoid the great possibility of such frauds, therefore, I repeat that but one kind of register should be used in the sale of liquors whether alcoholic or malt.
4. I would suggest the two following plans of assessment:
I. I would apply a uniform tax upon each drink of — cents, whether it be alcoholic or not. What the rate should be can best be determined by the General Assembly. Two and one-half cents, the present rate on alcoholic drinks, would certainly be too heavy a tax on malt liquors, while half a cent would be too small a tax upon alcoholic drinks. Some just medium however could be arrived at which would be oppressive to no one. I would make no distinction between the different kinds of drinks. The measure proposed is one for revenue, and no outside question should be allowed to embarrass it. Or,
II. I would impose an advalorem tax upon each drink, whether it be alcoholic or malt-makting the value of the drink, the imit a basis of taxation, thus: Upon all drinks from a value of five cents each up to ten cents, a tax of a half cent; upon a ten cent drink, one cent; upon all drinks of a value over ten cents and up to fifteen cents, a cent and a half &c. Thus much by way of illustration, the proper details of the scheme would, of course, be arranged in the bill.
5. If legislation can accomplish it, I would require the tax collected under the register to be paid in money. It is true the dealer may not be what is technically termed a collector of taxes, and therefore not bound by the general law to pay in kind; yet, practically, he does collect a tax for the State in money which should be paid by him in funds of a like kind.
6. And finally, I think the specitic license tax upon the dealer who sells by wholesale, or by wholesale and retail, should be increased to $250). The old law imposed a tax of $250, specific in such cases and also a tax iipon sales. The present law reduces this specific tax to $150 and abolishes the tax on sales. My recommendation applies only to the former tax. The sales I would not tax, as it might seriously affect the trade of the State and divert it to other points. In regard to the character of the funds which are used in payment of the tax under the Moffett law, it is impossible to ascertain with accuracy the proportion between coupons and currency. From the best estimate however that I can make, I should say that at least three-fourths of the entire tax is paid in coupons.
As this report covers all the points embodied in two resolutions of inquiry addressed to me—the one from the Senate, and the other from the llouse of Delegates—I trust it may be received as a response to both. It will be found to contain full replies to those inquiries, as well as other matters growing out of and intimately connected with the subjects.
I have now given the working of the present law, comparing its results with those of the former and have suggested amendments that I think are judicious.
I respectfully submit the whole matter to the consideration of the General Assembly for such action as may be deemed best for the interests of the commonwealth.
I am very respectfully, .
Auditor Public Accounts.