An array of higher taxes will go into effect in the District of Columbia tomorrow amid confusion over how some of them will be applied and continued opposition to the new sales tax on gasoline.
The confusion is perhaps the greatest over one tax -- being imposed for the first time at an 8 percent rate on the sales of candies, confections and soft drinks -- because city officials have not generally distributed lists of what will be taxed and what won't.
The tax that will be most widely felt is an increase in the general sales tax, imposed on most merchandise other than food and beverages. The rate will rise from 5 to 6 percent.
But the tax that will be the most visible, as well as the most controversial, is a new 6 percent levy on the pump price of gasoline.It will add 7.5 cents to the price of a gallon that now costs $1.25. A 20-gallon fill-up that costs $25 today will rise tommorrow to $26.50.
Victor Rasheed, executive director of the Greater Washington-Maryland Service Station Association, said his D.C. members are bitter because they expect to lose up to 40 percent of their business to the Maryland suburbs, the only area of lower-cost gasoline in the Washington region.
Organizations of taxicab operators, caught between rising gasoline costs and stable fares, said they will urge their members to buy gasoline in Maryland whenever possible. One group called a midday protest rally for tomorrow in front of the District Building.
Although the new taxes were enacted by the City Council on July 1, detailed regulations for their imposition will not be officially published until tomorrow -- the day they go into effect -- when they will appear in the D.C. Register, a city-published compendium of legal notices that goes by mail to 1,000 subscribers.
The regulations may ease the confusion, but they will produce some complications for retailers who sell candies, confections and soft drinks.
For example, raisins and salted nuts will remain untaxed because they are considered food, but if they are covered with chocolate or sugar coating, they will be taxed as candy at the 8 percent rate. Breath mints will be taxed, but cough drops will not. Candy bars will be taxed, but bakery goods such as cookies will not.
"I'll be damned. They have to complicate it, don't they?" exclaimed Joseph Shuman, owner of the Trover Shop which sells candies and books on Capitol Hill. "It will take a Philadelphia lawyer instead of a clerk to know what to charge."
All carbonated soft drinks, including Perrier water and other club sodas, will be taxed, and so will uncarbonated drinks with artificial flavoring. But if drinks contain more than 50 percent natural fruit juice, they are exempt.
Edward Tauber eyed a display of three types of identically packaged Tropicana fruit drinks in the glassfronted refrigerator at Continental Liquors, which he operates at Vermont Avenue and L Street NW. Told of the tax, he quickly realized that fruit punch with 20 percent natural juice, and orange drink, with 15 percent, will be taxed, adding 3 cents to the current 40-cent price. But the same size container of apple juice, which is totally juice, will not be taxed.
Leonard Kolodny, retail bureau manager for the Greater Washington Board of Trade, said his organization distributed about 3,000 sales tax cards and notices to its members. "The average retailer would not have known about it if it weren't for us," Kolodny said, since many did not receive or overlooked the original city notice.
Carolyn L. Smith, the city finance director, said gasoline retailers have the option of setting the meters on their pumps so it reflects the new 6 percent sales tax rate, or they may use a tax card to add the sales tax to the pump rate. The sales tax will be collected in addition to the current federal gasoline tax of 4 cents and District tax of 10 cents a gallon.
Several taxicab drivers interviewed yesterday said the new tax will require them to work longer hours and earn less money.
"I definitely am going to buy my gas in Maryland," said Winston Willis, who drives a Yellow Cab. "Already I spend $12 to $14 a day for gasoline. The new tax in the city will increase my gasoline costs by $2 or so if I buy it here."
Joseph Nickens, president of the Fraternal Order of Taxi Drivers and Owners, said his group -- composed mostly of Yellow Cab drivers -- will hold a protest rally from 10:30 a.m. to about 1 p.m. tomorrow in front of the District Building.
Two rival taxi groups have declined to participate.
Other tax increases that go into effect tomorrow are an increase in the hotel occupancy tax from 8 to 10 percent of the cost of a room and a doubling of the one percent tax on real estate normally to be paid by the seller rather than the buyer.