SUBJECT: MANUFACTURERS UHF AND VHF WITNESS: VINCENT T. WASILEWSKI, EXECUTIVE VICE SUMMARY OF STATEMENT Our position is that the manufacturers' excise tax on all radio and television receiving sets and components imposes an unnecessary burden upon the public. The day is long gone when radios-or even television receivers were novelties in the homes of the privileged few. Today, even the member of the lowest income group rightfully claims that radio and television sets are essential to his daily life. The tax on television receivers militates against the development of the ultrabigh frequency spectrum which the Congress has sought to foster. More than 1,500 UHF channels have been assigned to various communities by the FCC. Despite this number of assignments, only 120 UHF stations-both educational and commercialwere on the air on July 1, 1964. Recognizing the need for multiple channels of communication throughout the country, in 1962 Congress passed the all-channel television receiver law, Public Law 87-529. The National Association of Broadcasters strongly supported this legislation. As a concomitant measure we recommended removal of the excise tax on all-channel receivers to implement the national policy. These taxes represent a departure from the basic American philosophy of keeping the channels of information open and available to all people regardless of economic condition. We recognize that revision of the basic excise tax structure will require extended study and review by your committee. In the meantime, however, we urge the removal of the excise tax on all-channel television receivers as necessary to the further development of television in the United States. Full implementation of the all-channel receiver policy requires action now-at this session of Congress. SUBJECT: MANUFACTURERS UHF AND VHF WITNESS: MORT FARR, DIRECTOR, NATIONAL APPLIANCE & RADIO-TV DEALERS ASSOCIATION. SUMMARY OF STATEMENT Our association represents the thousands of TV dealers and retail stores from every State in the Union. We wish to lend support to the industry's plea for immediate relief from manufacturers excise tax on all-channel TV sets and for eventual elimination of the tax on radio and phonographs. UHF This tax relief is a logical second step to the all-channel law. has had a bleak history. Since UHF broadcasting began in 1952, 108 stations have gone dark and only 120 stations, out of the FCC's proposed allocation of 1,975, are now on the air. Today, 28 States and 156 cities with over 100,000 population have no commercial UHF stations. We as retailers fear a decline in TV set sales once the present VHF stocks are depleted in the next few months. Although the consumer will pay $10 to $30 more for an all-channel set, we are attempting to conceal this fact now by advertising VHF-only models as "price leaders." The portable television "revolution" is now a reality. The bulk of television sales are in the $125 to $175 retail price category today. With excise tax relief, this category would be brought down to the $90 to $150 price range. Annual sales could increase, thereby, from 8 million in 1963 to 9 or 10 million receivers and consequently offset the loss of revenue to Treasury. The retailer cannot absorb this price rise. Our average gross markup in TV in 1963 was 21 percent, with a net operating profit of only 1.4 percent. Besides the burden of the extra cost, the consumer must spend $20 to $40 for an outside UHF antenna in 75 percent of the homes. Even within UHF broadcast areas, master antenna systems convert the UHF signal to VHF, thus eliminating the need for all-channel sets in most schools, apartment buildings, hotels, motels, and hospitals. The historic competitive aspect of this industry will assure the passing on of any excise tax relief directly to the consumer. SUBJECT: MANUFACTURERS UHF AND VHF WITNESS: ROBERT D. L'HEUREUX, GENERAL COUNSEL, NATIONAL COMMUNITY TELEVISION ASSOCIATION. SUMMARY OF STATEMENT The American public has been forced to incur millions of dollars in added expense for all-channel television receivers. This has been done in order to benefit the economy and to make more channels available to encourage competition in the television broadcast business. In turn, the Government should repeal or drastically reduce the wartime excise taxes on all-channel receiver sets. The loss to the Treasury will be negligible, and there may be no loss at all because of the increase in set sales which can be expected to follow with the resultant added revenue through income tax collections. The National Community Television Association has encouraged its members to receive the signals of UHF television stations whenever this is technically and financially feasible. Besides, it has pointed out to its members the public benefits which can follow from the establishment of UHF television stations. In many communities which have been considered too small to support a UHF station, a CATV operator may well be able to establish or maintain such a station, by making use of his tower, office, studio, etc. A few CATV operators have already applied for UHF translator or station licenses and it is hoped that many new UHF stations will spring from these efforts. A re duction in the excise tax on all-channel receiver sets will encourage the American public to turn their VHF set in for an all-channel receiver and encourage the rapid development of the UHF medium. SUBJECT: MANUFACTURERS—UHF AND VHF WITNESS: LESTER W. LINDOW, EXECUTIVE DIRECTOR, ASSOCIATION OF MAXIMUM SERVICE TELECASTERS, INC. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) The Association of Maximum Service Telecasters, Inc., urges Congress at this time to take steps to reduce the 10-percent excise tax on television receivers. The reduction of this tax rests on unusually compelling public interest considerations. Such reduction will further the public policy of creating an aware and knowledgeable citizenry and will be a second needed step toward implementing the national television policy embodied in the all-channel receiver legislation. SUBJECT: MANUFACTURERS TELEVISION COMPONENTS PARTS WITNESS: STANDARD KOLLSMAN INDUSTRIES, INC. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) The provisions of H.R. 4988, and companion bill S. 1151, should not be enacted because it would produce an inequity in favor of those taxpayers who did not pay the required taxes. These bills would provide retroactive tax relief in the case of certain sales of vacuum tubes used in the production of component parts of television receiving sets prior to September 1, 1955. SUBJECT: MANUFACTURERS PETROLEUM PRODUCTS AND FUELS, DIESEL, ETC.-FUEL USED IN FIELD EQUIPMENT WITNESSES: D. L. McDONALD AND J. F. MCADAMS, IN BEHALF OF ASSOCIATION OF OILWELL SERVICING CONTRACTORS. SUMMARY OF STATEMENT Mr. McDonald and Mr. McAdams urged that specialized mobile oilfield equipment be exempted from the excise tax on diesel and special fuels while operating in a stationary capacity at the wellhead. They pointed out that an allocation between highway and off-highway use can readily be made by means of a sealed hubometer which is accepted by most States for State tax purposes. The present practice of the Internal Revenue Service is to tax these vehicles on fuel consumed while servicing a well unless a separate motor is used to operate the draw works mounted on the vehicles. SUBJECT: MANUFACTURERS PETROLEUM PRODUCTS AND WITNESS: RUDOLPH CUBICCIOTTI, IN BEHALF OF AMERICAN PETROLEUM INSTITUTE, NATIONAL PETROLEUM REFINERS ASSOCIATION, AND PENNSYLVANIA GRADE CRUDE OIL ASSOCIATION. SUMMARY OF STATEMENT To summarize our position, we believe that the excise tax on all lubricating oils should be repealed for the following reasons: 1. It was imposed to raise revenue during a financial crisis in 1932, an emergency which has long passed. 2. In effect, this is not a tax on a commodity per se, but rather an unjustifiable selective tax on certain of the uses made of that commodity. What makes the tax even more inequitable is the fact that this particular use of oil that has been singled out for taxation-that of lubrication is one which is so vital to the Nation's industry. 3. The tax has a direct impact on business costs since lubricating oil is indispensable in every industry, including farming. 4. The tax is an added burden on the Nation's motorists. Starting with the 10-percent excise tax that is included in the cost of his new car, there is hardly anything he can buy to put in or put on his car that doesn't have an excise tax included in the cost. 5. The tax presents costly and time-consuming administrative problems for both oil manufacturers and the Internal Revenue Service. The problems stem from required use of exemption certificates which manufacturers must process and keep on file by the millions. SUBJECT: MANUFACTURERS PETROLEUM PRODUCTS AND FUELS EXEMPTION FOR FOREIGN AND GOVERNMENT USERS FROM REGISTRATION REQUIREMENTS, REPEAL OF BONDING PROVISION, MODERNIZATION OF DEFINITION OF GASOLINE, USE IN MANUFACTURE OF ANOTHER ARTICLE WITNESS: W. NEEDHAM LAMBERT, IN BEHALF OF AMERI CAN PETROLEUM INSTITUTE. SUMMARY OF STATEMENT It is the position of the American Petroleum Institute with respect to excise tax administration that improvement could be effected in four areas of the petroleum industry's concern. These recommendations are: (1) Amendment of the Internal Revenue Code to exempt vessels and planes engaged in foreign commerce and State and local governments from onerous registration and certification requirements in connection with tax-free purchases of gasoline and lubricating oil as supplies; (2) Repeal of the unrealistic provision of the Internal Revenue Code that producers of gasoline and manufacturers of lubricating oil be bonded; (3) Clarification of the Internal Revenue Code section which permits tax-free sales of gasoline for nonfuel purposes as a material in the manufacture of another article; and (4) Modernization of the definition of gasoline. Again, I wish to express my thanks and that of the petroleum industry for your respectful attention. SUBJECT: MANUFACTURERS-PETROLEUM PRODUCTS AND WITNESS: DEAN M. BLOYD, CHAIRMAN, EXCISE TAX COMMITTEE, MID-CONTINENT OIL & GAS ASSOCIATION. SUMMARY OF STATEMENT I. THE PROBLEM The inclusion of "natural and casinghead gasoline" in the definition of "gasoline" under section 4082 creates burdensome administrative problems which are unwarranted in the protection of revenue. II. THE HISTORY OF THE PROVISION Introduced into the definition of "gasoline" in 1934 when certain natural and casinghead gasolines could be used as a motor fuel in the low compression engines of that era. |