"Are street vendors exempt from the provisions of the D.C. sales tax law?" a reader asks. "I have never been charged tax at a sidewalk stand."
I put the question to James Andy, who is in charge of registration and compliance in tax matters here.
"Every vendor must pay the tax and reimburse himself by passing it along to the buyer," he said. "And no vendor is permitted to tell customers that he absorbs the tax."
"Do we keep an eye on vendors to make sure they're collecting - and turning in - the sales tax?" I aksed.
"Yes," Andy said, "but that's in Ray Maltagliati's bailiwick. He's chief of the tax audit and liability division. We require vendors to post a bond or prepay some taxes before we give them a license; but after they're licensed they become Ray's problem."
Maltagliati turned out to be a man who is interested in people as well as tax collections. There may be about 3,000 licenses outstanding for street vendors here, he told me, but the number who are working on any given day would be closer to 2,000 - some of them probably unlicensed.
"Some are small independents, some work for a big company," Ray told me. "Some make a decent day's wages, some make so little that they become discouraged and drop out. In many cases, people work as street vendors only when they can't find anything else to do. The minute they find something better, they quit."
"You said some of them work for big companies?" I probed.
"Yes," Ray said, "about a half dozen companies have 50 or more vendors working for them, and we have audited every one of those big ones. The little independent isn't as likely to be audited, but we do try to make sure the District gets it due from every vendor."
"Has it been called to your attention that some vendors might not be charging the sales tax?" I asked.
"Yes," he said, "but in some cases we have found that although the vendor doesn't charge the tax, he pays it to us. In other words, what is a dollar sale to the customer is a 95-cent sale to the vendor plus 5 cents for tax."
"But they're not supposed to do it that way."
"Yeah, I know," Maltagliati said resignedly.
"How can the public tell whether a street vendor is licensed?" I asked.
"They're supposed to display evidence of licensing on their person or display table," he said. "Enforcement is a police matter."
"One last question. Do you have a breakout on how much the District collected in sales taxes from street vendors in 1976?"
"Yes. We collected $102,845 from them."
I hung up the phone and got out my trusty abacus. It 2,000 vendors turned in $102,845, the average vendor paid a fraction of a cent more than $51.42 last year - and $51.42 is the tax that would be due on $1,028.45 worth of sales. So the indication is that the average street vendor did only $1,028.45 worth of gross business last year.
One is left to wonder how much of that $1,028.45 could have been the vendor's profit or salary for the year. If profits run as high as 25 per cent of the selling price and a vendor sells $1,000 worth of goods a week, his takehome would be $250 a week. But the figures indicate these people are selling $1,000 worth of merchandise a year, not a week. How did they live on $250 a year? Something doesn't seem to add up.