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Liability of agents or brokers receiving and transmitting orders for oleomargarine to manufacturers. Unless sales are fully completed at the factory to the persons ordering, special tax is required to be paid at the place of delivery. (Vol. 1, Treas. Dec. (1898), No. 18978, p. 267.)

Parties selling oleomargarine are liable to special tax, although they are ignorant that the substance is oleomargarine. (Charge of Judge Jackson in the case of Hubbard & Paul r. Collector Gilkeson, U.S. circuit court, district of West Virginia. Vol. 1, Treas. Dec. (1898), No. 19246; Eagle v. Nowlin, Collector. Derision of Judge Baker (1899), 94 Fed. Rep., 6-16. (Vol. 1, Treas.

Dec., No. 21228.) SEC, 3245. Obsolete.

SEC. 3246, as amended by section 5, act of March 1, 1879 ( 20 Stat., 327). Special tax not Nothing in this chapter shall be construed to impose a

to apply to vint.

ners nor apothe. special tax upon vintners wlio sell wine of their own growth, caries in certain 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.

Limitation of a druggist's right to sell liquors without paying special tax. (34 Int. Rev. Rec., 157.)

Circular No. 340, 36 lut. Rov. Rec., 29, gives the ruling in full with reference to the exemption from special tax granted to druggists by the provisions of this section.

Ad apothecary, who bona fide uses spirituous liquors in the preparation of a medicine to be used as such and not as a beverage, does not violate section 3242, Revised Statutes, by not paying the special tax required of a retail liquor dealer. (United States r'. Calhoun, 39 Fed. Rep., 604).

Under the exempting provision of section 3246 a manufacturer of wine may sell the wine at two places wivhout paying special tax as a liquor dealer, viz, the place of manufacture and one “ general business office” elsewhere. (Vol. 1, Treas. Dec. (1898), No. 19223.)

Where wine is useil for making a “casing fluid for leaf tobacco,” unless the material added to the wine changes its character so that it is neither a potable liquid nor a liquid coming under the head of distilled spirits, wine, or malt liquor, special tax is required to be paid for its manufacture and sale, even though it be sold only to cigar manufacturers for use in leaf tobacco. (Vol. 1, Treas. Dec. (1898), No. 19333.)

A manufacturer of medicinal compounds, by the use of taxpaid spirits in combination with drugs, is entitled to the exemption from special tax granted to apothecaries by section 3240, Revised Statutes, when he sells such compounds only under labels specifying the diseases for which they are held out as remedies, and his use of a pharmaceutical still in the preparation of these medicines does not involve him in liabılity under the internal-revenue laws. (Vol.1, Treas. Dec. (1898), No. 19347.)

Where grapes are presserl at one place and the juice is then carried to another place and there fermented, the latter is the place of manufactnre of the wine, and the manufacturer is there permitted by the provisions of section 3216, Revised Statutes, to sell it without paying special tax. (Vol. 1, Treas. Dec. (1898), No. 19410.)

The fact that a person is an authorized liquor dealer under the internal-revenue laws does not prevent hini from engaging also in the compounding of medicines; and if he does so, using spirits in combination with roots, herbs, or drugs, and sells the compound only under a label specifying the diseases for which it is

held out as a remedy, he is an apothecary within the exempting provision of section 3246, Revised Statutes. (Vol. 1, Treas. Dec. (1898), No. 19412.)

A compound of medicinal roots and distilled spirits, if held out not merely as a remedy for disease, but also as “bitters for mixed drinks," is not to be regarded as made in good faith for medicinal use only, and therefore the manufacturer who sells it under such a label is not entitled to the exemption provided by section 3246, Revised Statutes, and is required to pay special tax as a rectifier and liquor dealer. (Vol.1, Treas. Dec. (1898), No. 19442.)

A person who sells blackberry wine (a fermented liquor inade from blackberry juice) is required to pay special tax as a liquor dealer for selling the wine, unless he is the manufacturer of it and has made it from berries grown by himself or gathered wild by himself or by persons in his employ, and the wine is sold by him only at the place of manufacture or at his one "general business office.” When he bottles the wine for sale he must pay stamp tax and affix the requisite stamp on each bottle. (Vol. 2, Treas. Dec. (1898), No. 20366.

A person who buys elder berries and makes wine therefrom is not within the exempting provision of section 3246, and is required to pay special tax for selling such wine, even when he sells it at the place of manufacture. (Vol. 1, Treas. Dec. (1899),

No. 20541.) Manufacturers SEC. 3. Act of June 6, 1896 (29 Stat., 253). of filled cheese.

Manufacturers of filled cheese shall pay four hundred dollars for each and every factory per annum. Every per

son, firin, or corporation who manufactures filled cheese Wholesale

for sale shall be deemed a manufacturer of filled cheese. dealers in tilled Wholesale dealers in filled cheese shall pay two hundred cheese.

and fifty dollars per annum. Every person, firm, or corporation who sells or offers for sale filled cheese in the original manufacturer's packages for resale, or to retail dealers as hereinafter defined, shall be deemed a wholesale dealer in filled cheese. But any manufacturer of filled cheese who has given the required bond and paid the required special tax, and who sells only filled cheese of his own production, at the place of manufacture, in the original packages, to which the tax-paid stamps are aflised, shall not be required to pay the special tax of a wholesale dealer in filled cheese on account of such sales.

Retail dealers in filler cheese shall pay twelve dollars per annum. Every person who sells filled cheese at retail, not for resale, and for actual consumption, shall be regarded as a retail dealer in filled cheese, and sections thirty-two hundred and thirty-two, thirty-two hundred and thirty-three, thirty-two hundred and thirty-four, thirty-two hundred and thirty-five, thirty-two hundred and thirty-six, thirty-two hundred and thirty-seven, tbirty-two hundred and thirty-eight, thirty-two hundred and thirty-nine, thirtytwo hundred and forty, thirty-two hundred and forty-one, thirty-two hundred and forty-three of the Revised Statutes of the United States are, so far as applicable, made to ex: tend to and include and apply to the special taxes imposed

by this section and to the persons, firms, or corporations when upon whom they are imposed: Provided, That all special

taxes under this Act shall become due on the first day of July in every year, or on commencing any manufacture, trade, or business on which said tax is imposed. In thio latter case the tax shall be reckoned proportionately from

Retail dealers.

Taxes due.

Penalties.

the first day of the month in which the liability to the special tax commences to the first day of July following.

SEC. 4. That every person, firm, or corporation who carries on the business of a manufacturer of filled cheese without having paid the special tax therefor, as required by law, shall, besides being liable to the payment of the tax, be fined not less than four hundred dollars and not inore than three thousand dollars; and every person, firm, or corporation wlio carries on the business of a wholesale dealer in filled cheese without having paid the special tax therefor, as required by law, shall, besides being liable to the payment of the tax, be fined not less than two bundred and fifty dollars por more than one thousand dollars; and every person, firm, or corporation who carries on the business of a retail dealer in filled cheese without having paid the special tax therefor, as required by law, shall, besides being liable for the payment of the tax, be fined not less than forty nor more than five hundred dollars for each and every offense.

ADDITIONAL SPECIAL TAXES IMPOSED BY THE ACT OF

JUNE 13, 1898. (30 Stat., 448).

Bankers.

Detinition.

SEC. 2. Act of June 13, 1898. That from and after July first, eighteen hundred and ninety-eight, special taxes shall be, and hereby are, imposed annually as follows, that is to say:

One. Bankers using or employing a capital not exceed. ing the sum of twenty five thousand dollars shall pay fifty dollars; when using or employing a capital exceeding twenty-five thousand dollars, for every additional thousand dollars in excess of twenty-five thousand dollars, two dollars, and in estimating capital surplus shall be included. The amount of such annual tax shall in all cases be computed on the basis of the capital and surplus for the preceding fiscal year. Every person, firm, or company, and every incorporated or other bank, having a place of busi. ness where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order, or where money is advanced or loaned on stocks, bonds, bullion, bills of exchange, or promissory notes, or where stocks, bonds, bullion, bills of exchange or promissory notes are received for discount or sale, sball be a banker under this Act: Provided, That any

Savings banks savings bank having no capital stock, and whose business tain cases. is confined to receiving deposits and loaning or investing the same for the benefit of its depositors, and which does no other business of banking, shall not be subject to this tax.

See under banks, pp. 333-337.

The decision of the Suprème Court in the case of Selden 1.
Equitable Trust Company (94 U. S., 419) construes section 3407,
Revised Statntes, the language of which in defining bankers is
ilentical with section 2.

The test question as to the liability of a company or firm as
bankers, as laid down in that case is whether or not, having av
place of business, a firm or person is embraced in any one of the
three following classes :

First. Do they have a place of business “ where credits are

exempt

in

cer

opened (to the general public) by the deposit or collection of money or currency, subject to be paid or remitted upon drast, check, or order?

Second. Do they have a place of business where money is advanced or loaned on collaterals (stocks, bonds, etc.)?

Third. Do they have a place of business where stocks, bonds, bullion, bills of exchange, or promissory notes are received from another person,

or sale, or bills of exchange or promissory notes are received for discout, belonging to that other person ? (Vol. 2, Treas. Dec. (1898), No. 20349.)

Bankers, as well as all other special-tax payers, must be included in Record No. 10, kept by collectors for public inspection under section 3240, Revised Statutes; but nothing is required to be stated in the record but the name of the special-tax payer, his business, the place of business, and the time of payment of the special tax. (Vol.2, Treas. Dec. (1898), No. 19969.)

Loaning money on the personal notes of the borrowers, with. ont collateral security, is not the business of banking contemplated by the statute. (Vol. 2, Treas. Dec. (1898), No. 20264.)

When the charter of a savings bank (or other corporate bank) is surrendered, and the same persons who are officers and stockholders thereof carry on a private banking business, a new special tax is required. (Vol. 2, Treas. Dec. (1898), No. 20336.)

Certain merchants receiving deposits from grain buyers and not from the general public do not thereby become bankers within the meaning of the statute. (Vol. 2, Treas. Dec. (1898), No. 20341.)

City merchants who receive on deposit money from country merchants who are their customers, for the convenience of the latter, but not opening such accounts with the public generally, are not regarded as subject to special tax as bankers. (Vol. 2, Treas. Dec. (1898), No. 20312.)

The receiving of employees' deposits on interest does not involve a company or firm in special-tax liability as bankers. (Vol. 2, Treas. Dec. (1898), No. 20313.)

Merchants do not bring themselves within the detinition of bankers by reason of selling their own drafts to their customers; they are not, on this account, required to pay special tax as bankers. (Vol.2, Treas. Dec (1898), No. 20365.)

In the case of a bank with branches, a special tax is required of each branch, the special tax being due as to each place where the business of banking is carried on. ( 3235 Rev. Stat., 1st clause; Vol. 2, Treas Dec. (1898), No. 20397.)

If two or more bankers, each of whom has paid a special tax, consolidate their business, the consolidated bikiny firm must pay a zew special tax from the date of the consolidation. But in neither case are the capital anıl surplus of the old (defunct) firin to be considered in reckoning the special tax of the new firm. (Vol. 2, Treas. Dec. (1898), No. 20119.)

Bank's special tax-Change of name.-Where a banking firm (not a corporation) changes its name, without any change in its membership, special tax is not required to be paid again on account of such change. (l'ol. 2, Treas. Dec. (1899), No. 20786.)

Opinion of Attorney-General on individed profits. (l'ol. 1, Treas. Dec. (1899), No. 20681.)

Undivided profits, when they are set apart by formal action of the board of directors of a bank, or by any officer of the bank authorized thereunto, and used in the business of banking, must be included with the capital and surplus in the return on which the amount of special tax to be paid is to be estimated. (Vol. 1, Treas. Dec. (1899), No. 21291.)

Explanation of revised Form No. 157. with reference to the clause relating to individed profits. (Vol. 1, Treas. Dec. (1899), No. 21284.)

(a) Private banks having no capital stock are subject to tax as bankers.

(b) In computing special tax of banks whose capital exceeds $25,000, it excess is less than $1,000, it is not to be considered.

(c) In estimating the amount of special tax baseil upon capital and surplus, the amount invested in United States boniis is not to be deducted.

6

(d) The amount invested in a bank building is not to be deducted.

(e) A bank in liquidation, doing no business except collecting and dividing assets in closing, is not required to pay special tax.

(f) A bank engaged in business in the month of July must pay special tax for the entire year, beginning July 1.

(9) A trust company is liable as a banker if it comes within any one of the three clauses of detinition in above section.

(h) Borrowed capital must be taken into account when estimating amount of special tax.

(i) It is not the subscribed capital, but the capital actually employed during the preceding fiscal year, that is to be taken as the basis for estimating the special tax.

(From Circular No. 508, August 8, 1898; Vol. 2, Treas. Dec.,

Vo. 19843.) Two, Brokers shall pay fifty dollars. Every person, firm, Brokers. or company, whose business it is to negotiate purchases or sales of stocks, bonds, exchange, bullion, coined money, bank notes, promissory notes, or other securities, for them selves or others, shall be regarded as a broker: Provided, Bankers not to That any person having paid the special tax as a banker pay tax as brok. shall not be required to pay the special tax as a broker.

(a) The loaning of money for oneself or for others, on commission, does not subject the lender to special tax as a broker; but if a person makes it a business to negotiate purchases or sales of stocks, bonds, exchange, bullion, coined money, bank notes, promissory notes, or other securities, for himself or others, he is required to pay the tax. “It is only when making sales and purchases is his business, his trade, his profession, his means of getting his living, or making his fortune, that he becomes a broker within the meaning of the statute.” (Warren et al. r. Shook, 91 U, S., 704.)

(b) Persons or firms acting as agents for parties loaning money upon promissory notes, secured by mortgages, are not brokers.

(c) A lawyer can make investments for clients without being liable, unless he does it to such an extent that it can be called a “business."

(d) Loan and mortgage companies not liable for loaning money on notes or bonds secured by mortgage or trust deed on real estate. If they purchase notes, bonds, or other securities, they become liable as brokers.

(e) A person engaged in the business of placing loans secured by notes and mortgages upon real estate, acting simply as agent, receiving a commission for his services in obtaining the application for the loan and attending to the execution of the papers, is not a broker.

(1) A person engaged in the business of selling real estate, acting as the agent of the owner in finding purchasers and receiving a commission for his services, is not a broker.

(9) When persons negotiate purchases or sales of promissory
notes, if these are only occasional acts and do not constitute
their regular business, they are not brokers within the meaning
of the act.

(1) Bucket-shop proprietors giving memorandum of transac-
tions are required to pay special tax as brokers.

(i) The principal's special-tax stamp for his place of business
in another city covers the transactions only at that place of
business, and can not cover the business con elsewhere at a
branch oftice.

(1) Broker's tax is not required to be paid at branch offices
where a clerk is employed, whose sole duty is to receive orders
and transmit them by wire to the head of the office. The mere
receipt and transmission by clerks of orilers is not regarded as
carrying on the business of a broker.

(From Circular No. 508, Aug. 8, 1898; Vol. 2, Treas. Dec., No.
19813.)

Special tax must be paid for every branch office where the
employee in charge not only receives and transmits orders with

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