REPORT OF THE COMPTROLLER OF THE TREASURY 11

any other tax statute in the State of Maryland. The laws as origi-
nally passed provided for a tax on certain retail sales, to be collected
at the rate of one cent on each sale of nine cents to fifty cents, and
an additional cent for each multiple of fifty cents thereafter. The
Legislature, at the Special Session of November, 1947, increased
the minimum taxable sale from nine cents to fourteen cents. It is
estimated that this change in the bracket from nine cents to fourteen
cents resulted in the collection of a sum considerably less than would
have been collected at the old rate.

During the period between the passage and the effective date of
the Acts, it was necessary to establish offices, recruit personnel.and
write the Rules and Regulations without which it would have been
impossible to administer the law. The Sales and Use Tax laws affect
every citizen of Maryland and every business within the State, and
many beyond its borders. Before the Rules and Regulations could
be written it was necessary for the staff to acquaint themselves with
the problems that the new laws would create in the course of different
businesses. It was therefore necessary to meet with representatives
of all of the major businesses and industries which would be affected
by the new laws. These conferences continued for several months
and their ultimate value has been proved by the results obtained.
No Rule or Regulation has been successfully attacked and upset
by Court proceedings and very little litigation has resulted from
the Sales and Use Tax Laws.

Prior to and for a period after the effective date of the Sales and
Use Tax laws, it was necessary to conduct an extensive educational
campaign to inform the people of Maryland of the provisions of the
new laws and the effect they would have upon their particular
businesses. This was accomplished by a series of radio broadcasts,
articles in the press, and meetings held throughout the State and
in the District of Columbia. In addition, some thirty-five investi-
gators spent the first three months that the law was in effect in visit-
ing the persons who were required to collect the tax and explaining
the operation of the law to them. After this educational campaign
an enforcement campaign was started which has resulted in the
collection of $160,656.00 that would not have otherwise accrued to
the State. The greater portion of this amount was not tax which
had been collected by merchants who had failed to remit the same,
but represented taxes which for one reason or another had not been
collected at the time the sale was made. Several criminal cases were
instituted for willful violation of the law, and in some instances jail
sentences resulted. A number of formal protests, against tax assess-
ments have been filed, and as a result formal hearings were held to
determine the validity of the assessments and the Rules and Regula-
tions upon which they were based. To date we have not had an ad-
verse Court ruling as a result of these formal hearings.

Of the $23,635,242.97 collected only $149.40 representing returned
unpaid checks was outstanding as of June 30, 1948.