TITLE IX-EXCISE TAXES.

Section 900 (3). Tax on tires, inner tubes, automobile parts and _accessories.

This subdivision provides a tax on tires, inner tubes and automobile parts and accessories sold or leased by manufacturers, producers or importers.

It has been suggested that manufacturers of automobiles should be declared by law to be manufacturers of tires, inner tubes, parts and accessories which are purchased and resold by them, because it is impracticable to keep separate records of the parts and accessories which are actually manufactured and which are purchased from other manufacturers.

It has been suggested that this change could be accomplished by an amendment in substantially the following form:

Strike out subdivision (3) of section 900 and insert:

(3) Tires, inner tubes, parts, or accessories, for any of the articles enumerated in subdivision (1) or (2), for automobile trucks, automobile wagons, other automobiles, or motor cycles, sold to any person other than a manufacturer or producer of any of the articles enumerated in subdivision (1) or (2), automobile trucks, automobile wagons, other automobiles, or motor cycles, 5 per centum. In the case of all sales of tires, inner tubes, parts or accessories by a manufacturer or producer of automobile trucks, automobile wagons, other automobiles, motor cycles, tires, inner tubes, parts or accessories (other than to another manufacturer or producer) such manufacturer or producer shall be deemed the manufacturer or producer thereof;

Section 900 (7). Cameras and lenses.

This paragraph imposes an excise tax of 10 per cent on the price for which cameras weighing not more than 100 pounds are sold or leased by manufacturers, producers, or importers.

It has been suggested that this tax should be extended to lenses sold separately; and that this change could be accomplished by an amendment in substantially the following form:

Strike out subdivision (7) of section 900 and insert:

Cameras, weighing not more than 100 pounds, and lenses, 10 per centum;

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Section 900 (9). Tax on candy.

This subdivision imposes a tax on candy sold by the manufacturer, producer, or importer.

It has been suggested that the term "candy" should be defined. The following definition of the term "candy" is suggested: Strike out subdivision (9) and insert:

Candy, 5 per centum. Candy within the meaning of this subdivision

(a) Includes chocolate creams, bonbons, gum drops, jelly drops. jelly beans, imperials, caramels, stick candy, lozenges, taffies, candy kisses, wafers, fudges or Italian creams, nougats, peanut brittle, sugared almonds, chocolate covered fruits and nuts, glacé or candied fruits and nuts not specified in paragraph (b) of this subdivision, pop corn and other cereals or cereal products not specified in paragraph (b) of this subdivision, mixed with or covered with molasses, sugar or other sweetening agent, hard candies, plain and chocolate covered marshmallows, sweetened licorice not taxed as cough drops under section 907, sweet chocolate and sweet milk chocolate whether plain or mixed with fruit or nuts; and all similar articles however designated; but

(b) Does not include cereal breakfast foods, cake, and pastries, bitter chocolate which needs the addition of sugar before it becomes pleasing to the taste, nor glacé or candied fruits purchased for and used in the manufacture of food products, such as ice cream, cakes, and pastries;

Section 900 (19). Tax on articles made of fur.

This subdivision imposes a tax on articles made of fur on the hide or pelt.

It has been suggested that the interpretation of the Treasury Department contained in article 31, of regulations 47, should be confirmed by legislation. This article reads as follows:

"Raw, dressed, and dyed skins are not subject to the tax when sold to a manufacturer for use in the manufacture of fur articles. Such skins, however, are subject to the tax when sold to a consumer. * * * The 'component material of chief value' of any article is that component material which is not exceeded in value by any other single component material."

It has been suggested that this change could be accomplished by an amendment in substantially the following form:

Strike out subdivision (19) of section 900 and insert:

(19) Articles made of fur on the hide or pelt, or of which any such fur is the component material of chief value, 10 per centum. Raw, dressed, and dyed skins shall not be subject to the tax when sold to a manufacturer for use in the manufacture of fur articles, out such skins shall be subject to the tax when sold to any other

person.

The "component material of chief value" of any article means that component material which is not exceeded in value by any other single component material;

Section 900. Manufacturer who customarily sells both at wholesale and retail.

The paragraph next to the last paragraph of this section provides:

If any manufacturer, producer, or importer of any of the articles enumerated in this section customarily sells such articles both at wholesale and at retail, the tax in the case of any article sold by him at retail shall be computed on the price for which like articles are sold by him at wholesale.

It has been suggested that this paragraph works a hardship on small manufacturers who are able only to engage in retail business. and that an injustice is done to a greater number of taxpayers through the operation of this provision than would be the case if every taxpayer under this section were required to pay tax on the basis of the selling price in the case of every transaction, and that, therefore, this paragraph should be repealed.

This change could be accomplished by an amendment in substantially the following form:

Strike out the next to the last paragraph of section 900 which reads as follows:

If any manufacturer, producer, or importer of any of the articles enumerated in this section-customarily-sells such articles both at wholesale-and-at-retail, the-tax-in-the-ease-of any article sold by him-at-retail shall be computed on the price for which like articles are sold by him at wholesale.

Section 902. Sculpture, paintings, statuary, art porcelains, and bronzes.

Articles on which tax is imposed by this section have been defined by the Treasury Department and it has been suggested that these definitions should be reviewed by Congress and incorporated, with whatever revision may be deemed necessary, in the law.

It has been suggested that these articles should be taxed only in the case of sales for consumption or use and that the exemption provided in this section for the benefit of educational institutions should be extended to all corporations organized and operated exclusively for religious, charitable, scientific, or educational purposes, provided no part of the net income of such corporations inures to the benefit of any private stockholder or individual.

It has been suggested that these changes could be accomplished by an amendment in substantially the following form:

Strike out section 902 and insert:

SEC. 902. That there shall be levied, assessed, collected, and paid upon sculpture, paintings, statuary, art porcelains, and bronzes, sold by any person other than the artist for consumption

or use, a tax equivalent to 10 per centum of the price for which so sold. This section shall not apply to the sale of any such article to an educational institution or a public art museum or a corporation organized and operated exclusively for religious, charitable, scientific, or educational purposes, no part of the net earnings of which inures to the benefit of any private stockholder or individual.

The term "sculpture" as used in this section means any production, such as statues, statuettes, figures, figurines, groups, busts, haut or bas reliefs, plaques, pedestals, vases, flower bowls or holders, umbrella stands, jardinieres, brackets, fountains, sundials, book ends, paper weights, cabinet pieces or curios, and the numerous articles included within the term bric-a-brac (whether antique or modern, and whether original, replica, copy, or reproduction) which is cut or carved by hand from marble, stone, alabaster, agate, crystal, jade, lapis lazuli, or other semiprecious stone, terra cotta, ivory, bone, wood, clay, wax, metal, or any other substance, and which is of such a character that the use to which under general custom or ordinary usage it should be put (irrespective of the use to which the purchaser intends to put it), is entirely or principally an ornamental or decorative one as distinguished from a useful or utilitarian one.

The term "sculpture" does not include (a) such articles as are in the nature of material, work, or labor furnished in connection with the erection or construction of a building and which form an integral part thereof, or (b) cut glassware or engravings on metal, wood, shell, stone, or other substance, or (c) furniture, altars, candlesticks, chandeliers, railings, gates, doors, or other articles designed primarily for a useful purpose.

The term "paintings" as used in this section means any pictures, images, likenesses, scenes, designs, or sketches, wholly or in part in oil, mineral, water, or other colors on canvas or other textile, wood, paper, metal, plaster, or other material, (a) whether antique or modern, (b) whether originals, replicas, copies, or reproductions, and (c) whether or not intended for reproduction by printing or other processes.

The term "paintings" does not include (1) such as are in the nature of work or labor furnished in connection with the erection or construction of a building and which form an integral part thereof; (2) furniture, windows, tableware, toilet articles, glove, handkerchief, candy, or other fancy boxes, menu, place, greeting, and similar cards, stationery, candlesticks, signs, placards, desk fittings, and other articles of utility when the same are ornamented or decorated with oil, mineral, water, or other colors; (3) such as are produced wholly or in part by stenciling, printing, or other mechanical process; and (4) pastels or drawings. The term "drawings" as

used in this paragraph means only pictures, images, likenesses, scenes, designs, or sketches produced by means of lines.

The term "statuary," as used in this section, means any production (whether antique or modern and whether original, replica, copy, or reproduction) cut, carved, or otherwise wrought by hand from marble, stone, alabaster, agate, crystal, jade, lapis lazuli, or other semiprecious stone, terra cotta, ivory, bone, wood, clay, wax, metal, or other substance, when such production is a representation in the round of the human or animal form (irrespective of size), whether real, mythical, fabulous, or allegorical.

The term "statuary" does not include (a) such productions as are in the nature of material, work, or labor furnished in connection with the erection or construction of a building and which form an integral part thereof, (b) dolls or toys, or (c) such productions as are designed for a primarily useful purpose.

The term "art porcelains," as used in this section, means that class of articles, such as statues, statuettes, figures, figurines, groups, busts, haut or bas reliefs, plaques, pedestals, vases, flower bowls or holders, jardinieres, brackets, fountains, sundials, cabinet pieces or curios, and the numerous articles included within the term bric-abrac, by whatever process made, when such articles are made wholly or in chief value (a) of any ceramic production of translucent ware, of hard or soft paste, whether vitrified or semivitrified, by whatever name known; or (b) of that which is commonly or commercially known as porcelain, in either case, whether or not decorated, colored, or ornamented, whether modern or antique, and whether originals, replicas, copies, or reproductions, which are of such a character that the use to which under general custom or ordinary usage they should be put (irrespective of the use to which the purchaser intends to put them) is entirely or principally an ornamental or decorative one as distinguished from a useful or utilitarian one.

The term "art porcelains" does not include (a) such articles as are in the nature of material, work, or labor furnished in connection with the erection or construction of a building and which form an integral part thereof, (b) tableware or other articles designed for a primarily useful purpose, or (c) such articles as are duplicated by the manufacturer in commercial quantity wholly or chiefly by the ordinary mechanical process of manufacture. Articles shall not be deemed to be duplicated in commercial quantity unless they are ordinarily sold by the manufacturer in quantities of not less than a dozen.

The term "bronzes," as used in this section, means that class of articles such as statues, statuettes, figures, figurines, groups, busts, haut or bas reliefs, plaques, pedestals, vases, flower bowls or holders, umbrella stands, jardinieres, brackets, fountains, sundials, book ends, paper weights, cabinet pieces or curios, and the numerous