Music Trade Review

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THE MUSIC TRADE
DECEMBER 21, 1918
REVIEW
Revenue Bill Probably Will Be Passed by Congress
Indications at Washington Seem to Point to an Early Enactment of the Present
Revenue Bill Into Law—Equitable Basis for Inventories Provided—Other Im-
portant Features of Bill Described by The Review's Washington Correspondent
WASHINGTON, D. C, December 18.—The promp-
titude of the United States Senate in accepting
the recommendations of its Finance Committee
with respect to the proposed revision of the
national tax schedule on musical instruments is
additional evidence that we are likely to have,
after all, a new system of Federal taxes shortly
after the first of the year. It means that para-
graph 3 of Section 900 of the Excise Tax sched-
ule will go to "conference" with the rate cut
from 10 per cent., as the House fixed it, to 5 per
cent, and with the phrases "other than pipe
organs" (following the designation "organs")
and "music boxes" written in by the Senate.
That the Revenue bill is likely to be enacted
into law by the present Congress, and in time
to take effect in 1919, is due to a sudden change
of attitude on the part of the Republican mi-
nority in the Senate. As readers of The Re-
view have been informed, the Republicans have
objected strenuously to the effort of the domi-
nant party to make the pending bill not only
provide revenue for 1919, but likewise commit
Congress in advance to a definite taxation policy
for 1920. So determined was the opposition
that it appeared likely that the whole question
of national taxation might fail of disposition at
this, the final, session of the present Congress,
and be thrown over into the special session of
the new Congress which will presumably be
called immediately after March 3.
New Law Ready in January
By a sudden change of policy, however, Re-
publican Senators decided to confine their ob-
jections to the rearrangement of a tax program
for 1920 and not to obstruct the passage of the
bill, at least in so far as it provides revenue for
1919. In the expectation, then, that the Revenue
bill will be finally approved by both Houses of
Congress early in January, the U. S. Internal
Revenue Bureau has called a halt on its arrange-
ments to collect the 1919 taxes on the basis of
the present tax law—a plan which was in con-
templation when it appeared that the new sched-
ules would not be approved sufficiently early in
the year to permit of use in the coming collec-
tion.
Interesting Decision Anent Inventories
Aside from the reduction in the rate on mu-
sical instruments and the elimination of the in-
traube
iquitous floor tax there are a number of fea-
tures of the revised bill which have received the
approval of the Senate that will afford gratifica-
tion to music trade merchants. For example,
there is the recognition accorded to inventories.
A rumor has been current for several weeks past
in retail music trade circles to the effect that
the Senate would, in its reconstruction of the
bill, introduce a provision to the effect that all
inventories must be made on the basis of actual
cost rather than "at the market" or on the basis
of replacement value. It now develops that
this report is entirely unfounded.
On the contrary, the Senate has broadened the
rules that the House laid down with respect to
the taking of inventories, as a basis for deter-
mining the income of business men, by provid-
ing that such inventories may be taken on what-
ever basis conforms most nearly to the best ac-
counting practice that obtains in the trade or
business involved. Furthermore, the matter of
depletion of inventories which is such a vital
issue with the prospect of receding prices of
commodities and which was totally overlooked
in the House has had recognition in the Senate.
"Net Loss" Clause to Give Relief
The Senate Committee in its final revision of
the bill devoted much attention to the matter
of anticipated losses through shrinkage in value
of inventories from the present high levels. A
provision with respect to "net losses" was there-
fore incorporated in the bill, and it is believed
will give some relief to business men. This is
quite new to our tax scheme inasmuch as here-
tofore no recognition has been given to net
losses—that is, if in any year the losses and ex-
penses of a taxpayer exceed his gross income
the excess (or in other words, the net loss)
cannot be carried over into the next year. As
matters have stood, settlement for purposes of
taxation must be made on the basis of each
year's business by itself. It has dawned upon the
Senate that it does not recognize the exigencies
of business and that it may work injustice at a
time when business is disturbed from any cause
such as war conditions or post-war readjust-
ment. Accordingly, the Senate Committee has
framed the very important amendment which
provides that under certain limitations net losses
sustained in 1917 or 1918 may be deducted in
computing the net income of the taxpayer for
the succeeding taxable year, and also provides
a similar basis for taking care of net losses in
future.
On top of this the rewritten bill contains an-
other feature designed to enable the taking up
of slack due to shrinkage in inventories. In
order to afford prompt relief in case it should
be discovered within a relatively short time after
the close of a taxable year that a loss has been
sustained resulting from a material reduction of
the value of the inventory or other similar
cause, provision is made that the amount of the
loss then discovered may be deducted from the
net income of the preceding taxable year, any
amount of tax thus found to have been overpaid
to be promptly refunded.
An Important Provision
It is suggested that music trade men should
not overlook one provision (Section 1310), which
the Senate has written into the General Admin-
istrative provisions of the new bill and which
reads: "Wherever in this act a tax is required
to be paid by the purchaser to the vender at the
time of sale and such sale is made on credit,
then, under regulations prescribed by the Com-
missioner with the approval of the Secretary,
the tax may, at the option of the vender, be re-
turned and paid by him to the United States
as if paid to him by the purchaser at the time
of sale, and in such case the vender shall have a
right of action in any court of competent juris-
diction against the purchaser for the amount of
the tax so returned and paid to the United
States."
W. E. JANSSEN RETURNS
W. E. Janssen, son of B. H. Janssen, well-
known New York piano maker, has returned
from the Great Lakes Naval Training Station,
and expects to be discharged from service short-
ly. Young Mr. Janssen will resume his activ-
ities in connection with his father's business as
soon as his discharge is received.
The J. C. Lunceford Piano Co., of Mont-
gomery, Ala., has opened a new store in that
city and reports an excellent business in pianos
and players.
" Sings its own praise " and now may help
swell the chorus of praise for the Great
Victory.
Gradually the Government is relaxing
the necessary restrictions of war—soon the
great
traube
plant will be able fully to care for the ever-
growing demand from all parts of the
country.
Straube Upright, Style K
"Sing Their Own Praiae"
Straube Player, Style 15
"Sing Their Own Praise"
STRAUBE PIANO CO.
HAMMOND
INDIANA