1878 VETOES

chinery which is represented by the trade-in allowance
on used machinery, will cause a loss well in excess of $100, -
000. 00 in State revenue. Officials of the Sales Tax Division
have publicly stated that this measure will make for ad-
ministrative difficulty since there is wide variance among
tax experts, as well as among dealers and farmers, as to
what constitutes machinery.

In connection with the vetoing of Senate Bill No. 376
today, I pointed out that prevention of discrimination is a
fundamental prerequisite in declaring an exemption such as
this to be either desirable from a policy standpoint or
feasible from a revenue standpoint. An exemption from
sales tax which grants a special privilege to some, while
denying it to others, presents possible constitutional diffi-
culties aside from the policy questions involved. If an ex-
emption of the trade-in value is allowed in connection with
farm machinery, why should it not be extended to farm
equipment? Automobile dealers, appliance sellers, type-
writer distributors and every other seller of personal prop-
erty can rightly ask why similar trade-in exemptions are
not extended to their business. While I obviously favor all
possible reductions, not only in the sales tax, but in other
fields of taxation utilized by the State, such reductions of
or exemptions from the sales tax should operate equally
and uniformly for the benefit of all rather than for any
select class. Broad general unqualified exemptions present
a minimum of administrative difficulty, avoid possible con-
stitutional objections of discrimination, and operate freely
for the benefit of the general public at large. Examples of
broad general application of reductions or exemptions in
taxation are to be found in the 15% income tax cut and in
the large scale sales tax reductions at the special session of
the General Assembly in 1950. Any further reductions or
exemptions which may, and I hope will be possible in these
or any other taxes should be so framed as to operate in
similar fashion.

For the aforegoing reasons, which I have also expressed
in connection with Senate Bill No. 376, I am returning this
bill, without my approval.

Respectfully,

(s) THEODORE R. MCKELDIN,

Governor
TRMcK/A