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Retail dealers in oleomargarine, special tax, $18.

pay the special tax of a wholesale dealer in oleomargarine on account of such sales. Retail dealers in oleomargarine shall pay forty-eight

dollars. Every person who sells oleomargarine in less quantities than ten pounds at one

time shall be regarded as a retail dealer in oleomargarine. And sections thirty-two hundred and thirty-two, thirty-two hundred and thirty-three, thirtytwo hundred and thirty-four, thirty-two hundred and thirty-five, thirty-two hundred and thirty-six, thirty-two hundred and thirty-seven, thirty-two hundred and thirtyeight, thirty-two hundred and thirty-nine, thirty-two hundred and forty, thirty-two hundred and forty-one, and thirty-two hundred and forty-three of the Revised Statutes of the United States are, so far as applicable, made to extend to and include and apply to the special taxes imposed by this section, and to the persons upon whom they are imposed.

The proviso to this section was repealed by Sec. 53, act October 1, 1890.

A manufacturer of oleomargarine, after having discontinued business, directed one wholesale dealer in oleomargarine who held some of his goods to consign the same to another wholesale dealer in oleomargarine, who sold the same on the late manufacturer's account on commission. It is held that these transactions do not make the late manufacturer a wholesale dealer, as the special-tax stamp of the wholesale dealer who sold the goods covered the sale at his place of business of the packages belonging to the late manufacturer, which the dealer received as such manufacturer's property, and sold on commission for him and on his account as his agent. Internal Revenue Regulations, Series 7, No. 9, Revised, p. 41.

A person, even if he is a retail dealer in oleomargarine, may solicit orders for oleomargarine in wholesale quantities,


and send these orders to the wholesale dealer or to the manufacturer, and receive therefor an allowance as brokerage, without subjecting himself to a special tax as a wholesale dealer, provided the wholesale dealers (or the manufacturers, if the orders are sent to them) ship the original stamped packages to the persons ordering direct and unconditionally, without any intervention on the part of the broker in the delivery. The receipt of commission or brokerage, under these circumstances, for the orders obtained, is immaterial so far as the special-tax question is concerned. 32 Internal Revenue Record, p. 337.

A retail dealer in oleomargarine is permitted by Sec. 6 of the act of August 2, 1886, to sell as much as ten pounds of oleomargarine at one sale ; but as the same section requires him to sell it from the original stamped package, and Sec. 3 of the act precludes his selling the original stamped package without payment of special tax by him as a wholesale dealer, the only course for him to pursue under these circumstances is to sell this quantity directly from the original stamped package, and deliver it in another package, properly marked and branded, to the purchaser. Int. Rev. Reg., Series 7, No. 9, Revised, p. 49.

See decisions published in 32 Internal Revenue Record,

p. 318.


Sec. 3245. The special tax paid by distillers prior to August one, eighteen hundred and seventy- Balance of distwo, which has not been exhausted by the tillers especial quantity of spirits distilled as provided by law, shall be refunded, upon proper application, out of any money arising from internal taxes not otherwise appropriated.

This section is regarded by the Office of Internal Revenue as practically obsolete. It seems quite improbable that any claims of the nature indicated remain unacted upon.

SEC. 3246, as amended by Sec. 5, act March 1, 1879.

to apply to vintners nor apothecaries in certain cases.

Nothing in this chapter shall be construed to impose Special tax not a special tax upon vintners who sell wine

of their own growth, or manufacturers who

sell wine produced from grapes grown by others, at the place where the same is made or at the general business office of such vintner or manufacturer : Provided, That no vintner or manufacturer shall have more than one office for the sale of such wine that shall be exempt from special tax under this act; nor shall any special tax be imposed upon apothecaries as to wines or spirituous liquors which they use exclusively in the preparation or making-up of medicines.

Under the clauses of Sec. 3246 exempting vintners from special tax it is held that the manufacturer or vintner may sell at two places at the same time, viz., the place where he made the wine and his general business office, without paying special tax. Internal Revenue Manual, pp. 140, 141.

The special tax of a liquor dealer is not imposed upon apothecaries as to wines or spirituous liquors which they use exclusively in the preparation or making-up of medicines. Sec. 3246 R. S. But this section is construed to mean medicines which cannot be used as beverages. 19 Internal Revenue Record, p. 145.

By the provisions of Sec. 3246 R. S., a druggist is permitted to keep spirits and wines, and use them, in combination with drugs, in the preparation of medicines that are not beverages, and to sell such medicines without paying special tax as a liquor dealer under the internal revenue laws of the United States. But under the uniform rulings of this office and the decisions of the United States courts, he cannot, without subjecting himself to this special tax, sell spirits or wines that are not combined with drugs or materials of any kind taking these liquors out of the class of beverages, even when he sells the liquors on a physician's prescription and for medicinal use only. Internal Revenue Regulations, Series 7, No. 1, Revised, p. 34.

Besides the medicinal compounds which a druggist is authorized to sell without paying special tax as a liquor dealer, although they contain alcoholic liquors, there are other compounds containing spirits, which, while they are not medicines, are non-potable articles that do not come under the head of " distilled spirits, wines, or malt liquors," in contemplation of the internal revenue laws, and which, therefore, he is entitled to sell without paying special tax, e. g. toilet articles, such as cologne and bay rum ; ether with alcohol, for use in photography ; benzine or ether with alcohol, for cleaning purposes; castor oil and alcohol, for toilet use; Florida water, violet water, etc.; toilet articles made from alcohol; camphor and alcohol; alcohol and ammonia and whiting, a cleaning preparation ; alcohol and shellac, for painters, etc.

Wyeth's Malt Extract, which is held out as a medicine, has been represented, under oath, by the druggist who manufactures it, as containing the chemical principles diastase, dextrine, maltose, in such strength as would produce nausea if it should be used as a beverage. This, and other like extracts of malt, held out as medicines and not as beverages, are to be regarded as medicines until the facts brought before this office show that they belong in the class of malt liquors [beverages] referred to in Sec. 3339 R. S. Meanwhile, druggists who sell them in good faith as medicines only are not to be called upon to pay special taxes as dealers in malt liquors on account of such sales. Internal Revenue Regulations, Series 7, No. 1, Revised, p. 34.

As to the compounds called “bitters,” “tonics,” and the like, the rule is, if they are composed of spirits in combination with drugs, herbs, roots, etc., and are held out as remedies for diseases stated in labels on the bottles, they are to be regarded as medicines until the facts ascertained as to the purposes for which they are usually sold or used show them to be beverages; and, until such facts are obtained, druggists and merchants who sell these compounds in good faith as medicines only are not to be called on to pay special tax as liquor dealers on account of such sales. Every person who sells them as beverages, either by the bottle or by the drink, or sells them knowingly to those who buy them for use as beverages, involves himself in liability to criminal prosecution under the internal revenue laws of the United States, unless he holds a special tax stamp as a liquor dealer covering such sales. Internal Revenue Regulations, Series 7, No. 1, Revised, p. 34.

Liquors put up and exposed for sale bearing labels such as “ Medicated Bourbon Whiskey,” “ Port Wine, Medicated,” “Peach-Brandy Bitters," with nothing else upon the label except the dose prescribed, are not so taken from the category of beverages and liquors and placed in the category of medicinal articles as to relieve the vendor from the liability to pay special tax as a liquor dealer, or the person who prepares them from special tax as a rectifier. See 24 Internal Revenue Record, pp. 130, 281, and 305.

The exemption from special tax accorded to apothecaries applies also to any and all mechanical appliances and processes which they may find to be necessary or useful in the preparation or making-up of medicines, and an apothecary, therefore, notwithstanding the fact of his holding a specialtax stamp as a liquor dealer, is not subject to special tax as a rectifier on account of his keeping a still or distilling apparatus for use exclusively in treating liquors, etc., employed in the making-up of medicines. Decision No. 179, dated April 21, 1879.

The fact that a compound may be used as a medicine, and may be so intended by the person making it, does not relieve the seller from the liability of a retail liquor dealer, if the compound is intoxicating, and is not sold as a medicine. The true test in all such cases is: Was the compound sold in good faith for medicinal purposes only, or was it sold as a beverage, or sold knowingly to persons who bought it for use as a beverage ? Internal Revenue Regulations, Series 7, No. 1, Revised, p. 35.

Held that if the article sold (Reed's Gilt Edge Tonic) was a medicine, and contained spirits simply to preserve its medicinal qualities, and was sold and taken as a medicine in

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