Newspaper Page Text
— Griffin Daily News Thursday, September 22,1977
Page 24
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Scene of beauty
Dripping rock, a well known landmark in the area of Camp Thunder, a Boy Scout camp in
Upson County, is shown in this photo by staff photographer William Berry. The spot of
beauty is located on a stream which flows into the Flint River.
‘The Castle of Montgomery’ on display
WILLIAMSBURG, Va. (AP)
— The Abby Aldrich Rockefel
ler Folk Art Collection has put
on display a 19th-century fire
board with a landscape called
“The Castle of Montgomery.”
Fireboards were used until
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the inid-19th century to cover
hearth openings when the fire
place was not in use, but well
docuinented Southern examples
such as this one are rare. The
subject of the landscape is be
lieved to have been derived
from a print or book illustra
tion.
The painting was given to the
museum in 1974 by Mr. and
Mrs. Thomas A. Moore of Spar
tanburg, S.C.
Corporate tax avoidance
Commission keeps eye on corporations
By JONATHAN WOLMAN
AP Urban Affairs Writer
BOULDER, Colo. (AP) - The
Multi-State Tax Commission,
the product of a littleknown tax
agreement among 20 states, is
stepping up its aggressive
auditing campaign against
corporate tax avoidance.
State tax officials say out-of
state firms sometimes use gim
micks — legal or otherwise — to
avoid tax payments. They say it
is difficult to determine tax
liability for companies that
operate across state lines.
On request of its members,
the tax commission audits these
multistate firms. Over the past
three years, the commission
has recommended additional
assessments averaging $lB for
each $1 it spent for auditing.
“We’re auditing one oil com
pany right now that has 360
subsidiaries,” says executive
director Eugene Corrigan. “It’s
a job that would cost a fortune
for any single state.”
The commission is under at
tack in the courts. U.S. Steel
and a dozen other firms have
charged it is an unconstitutional
joining of states and a threat to
the confidentiality of tax
returns.
State courts in Washington
and New York have disagreed,
and the U.S. Supreme Court will
hear the case in its next term.
If the authority of the com
mission is confirmed, the group
— comprised mostly of Western
states right now — could see
considerable growth. Corrigan
says nonmember states are al-
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ready beginning to adopt many
of the tax provisions shared by
compact states.
The reason for the corporate
opposition is simple: the tax
commission is costing some of
these companies a lot of money.
In 1975-76, the commission,
acting on the basis of its audits,
recommended that member
states assess an additional $2.5
million in taxes. One year later,
following audits on some larger
companies along with an in
crease in the number of audits,
recommended additional
assessments rose to $lO million.
The commission spent $320,-
000 to conduct last year’s audits
and has increased its audit staff
from six to nine this year.
“The Tax Commission has
helped us a lot,” says Colora
do’s corporate tax chief, Ted
Middle. “We’ve nailed a couple
of companies that were simply
telling one state one story and
another story to us.”
About $8 billion in state and
local corporate income tax will
be collected this year. Officials
estimate that between 10 per
cent and 30 per cent is going
unpaid.
“If we’re missing 10 per cent,
and that’s a low guess, then it’s
pretty nearly $1 billion a year,”
says Corrigan.
Economist Stan Schwartz at
the Colorado Department of
Revenue says corporations of
ten have an advantage over
traditionally overworked state
tax auditing divisions because
“too many companies hire far
too many accountants to figure
out how to pay far too little
taxes.”
The tax commission is the
auditing arm of the Multi-State
Tax Compact, the formal
agreement that binds the 20
states. It was created by state
tax officials seeking uniform
tax laws after they found that
corporations were playing
states off against each other in
what Corrigan calls “a massive
game called tax avoidance.”
The most common way of il
legally avoiding state taxes is
for a corporation to juggle its
books to make it appear that
more income was earned in
states with low tax burdens.
“Sometimes they just lie,”
Corrigan says. “They tell one
state that they’ve paid taxes to
another state when they haven’t
paid at all. Unless we do a joint
audit, there’s little chance of
finding the truth.”
Byron Dorgan, the nation’s
only elected state tax commis
sioner, says, “It’s scandalous.
How can I expect the people of
North Dakota to pay their taxes
while these corporations are
dodging theirs?”
While U.S. Steel and other
corporate giants challenge the
commission in the courts, offi
cials at General Motors said
they considered such a move
but rejected it.
Beside joining in the Tax
Compact, an increasing number
of states are acting alone to in
crease the number and frequen
cy of corporate audits.
The Tax Commission auditors
have a reputation among state
tax officials as being more ag
gressive than the state auditors
themselves, sometimes taxing
such income as dividends and
interest that the states histori
cally have ignored.
The commission has embar
ked on a campaign to achieve
uniform adoption of a taxing
approach known as the “unitary
formula,” a practice now
adopted in California and Ore
gon.
Under the unitary approach,
states will tax companies ac
cording to the state’s per
centage of their worldwide
business. Currently, most states
tax companies according to the
percentage of U.S. operations.
But tax officials complain
that companies can shift in
come to foreign subsidiaries in
order to avoid U.S. taxes.
Corporate officials say the
unitary approach is often unfair
because foreign operations are
sometimes more profitable than
U.S. operations and should not
be folded into the formula for
computing state taxes.
Donald Rohn, assistant direc
tor of GM’s tax section, says
California’s system is unfair,
not so much because of the the
ory involved, but because it is
“selectively” enforced.
Corrigan says the unitary ap
proach is a sound one, and the
commission has adopted a reso-
lution urging other states to
adopt it.
“Our people are beginning to
understand that you can’t sit
back and get picked off one by
one,” said Corrigan.
States that are members of
the Multi-State Tax Commis
sion are Alaska, Arkansas, Cal
ifornia, Colorado, Hawaii, Ida
ho, Kansas, Michigan, Mis
souri, Montana, Nebraska, Ne
vada, New Mexico, Oregon,
South Dakota, North Dakota,
Texas, Utah, Washington,
Wyoming.
Associate members are Ala
bama, Arizona, Georgia, Loui
siana, Maryland, Massachu
setts, Minnesota, New Jersey,
Ohio, Oklahoma, Pennsylvania,
Tennessee and West Virginia.
Griffinites
get teaching
assignments
Two Griffinites, who are
education majors at Tift
College, have been assigned to
schools for student teaching.
Sherry Juanita Hightower,
will student teach at Hubbard
Elementary in Forsyth and
Mary Elizabeth Hargrove will
student teach at Spalding
Junior High in Griffin.