SALES TAX

Wairarapa Times-Age, 27 May 1942, Page 3

SALES TAX

1 WHOLESALER=RETAILER POSITION CLARIFIED. RULING BY PRICE TRIBUNAL. (By Telegraph—Press Association.) WELLINGTON, This Day. To clarify the sales tax position where firms registered as wholesalers also acted as retailers, the Price Tribunal yesterday issued a ruling. It was stated that this class of whole-saler-retailer was generally to be found in the printing, electrical, stationery and oil and colour trades, and, in a few isolated instances, in the hardware trade. The Tribunal stated that the sales tax obligation of such traders was to make payment to the appropriate authorities at the end of each month on the basis of the total retail sales made during the month, calculated at the consumer price value, less an agreed upon percentage deduction. As a.consequence, all goods sold by these traders by way of retail from and including May 1 would necessarily be subject to the higher rate of sales tax, thus providing justification for an increase in the consumer price. On the basis of authentic calculations the Tribunal had found that an increase of the old consumer prices by as much as 10 per cent was not warranted, because on the method of computation adopted for this class of business the percentage which the tax actually paid bore to the retail price worked out at less than 10 per cent. The extent of such increase should not exceed the actual amount of the tax paid, and the Tribunal therefore was making this public intimation to all concerned in order that- consumer price adjustments could be regulated accordingly, and precise information as to how the new consumer prices were framed kept readily available for production to the Tribunal’s investigating officers and inspectors as and when called for. The Tribunal also stated that this intimation did not apply to traders registered for sales tax purposes as “manufacturing retailers.” It would be impracticable to cover the whole of this group of traders by one general price adjustment authority on account of the varying conditions existing, trade by trade. Accordingly, it would be necessary for “manufacturing retailers” to make direct application to the Tribunal for permission to adjust prices on account of the incidence of the higher rate of sales tax, submitting at the same time all necessary data to justify the extent of the movement, general or otherwise, as applied for.