124.

Two Inspectors Required by a Distillery that runs constantly. Assistant Inspectors must be employed at each distillery which runs so constantly that one Inspector cannot be present all the time it is running.

125.

Distillers' Warehouses-Assistant Inspectors.

A distiller can establish as many warehouses, class A, for the storage of his products as he may elect ; but if the number is so great as to withdraw the attention of the Inspector from a strict supervision of the distillery, one or more assistants should be appointed, as provided in section 29 of the act of July 13, 1866, (129 of Compilation.)

126.

Rectifiers not liable to tax on their Productions.

Rectifiers are not required to pay a five per cent. ad valorem tax upon compound or imitation liquors manufactured by them for sale.

127.

Wines and Imitation Wines.

A tax of fifty cents per gallon is imposed upon all liquors known or denominated as wine, not made from grapes, currants, rhubarb, or berries, produced by rectification, or mixed with other spirits, or into which any matter whatever may be infused, to be sold as wine or by any other name, and not otherwise provided for in the Internal Revenue Laws. Such spirits need not be inspected and gauged by an inspector, but all persons engaged in the manufacture of them should make their returns and pay their taxes at the same time, and in the same manner as the manufacturers of other articles.

128.

Cider, Ale, Beer, and Wine, exempt from the Tax on Distilled Spirits.

Cider, ale, beer, and wine contain alcohol, but they are produced by fermentation; and inasmuch as they are not produced by distillation, they are not subject to the tax upon distilled spirits.

129.

Spirits cannot be Refined in Bonded Warehouses of Distillers. Spirits may be refined upon removal in bond, but cannot be refined in the distiller's bonded warehouse.

130.

Apple Distillers may distill Brandy from pure Apple Cider. Brandy distilled from pure apple cider is included in the exemption

made in reference to "distillers of brandy from apples, peaches, or grapes exclusively.

131.

Definition of Capacity of a Still under Section 24, Act July 13, 1866.

The capacity of a still, as the term is used in section 24, of the act of July 13, 1866, (section 122 of Compilation) is not the quantity which the distiller may seem practicable to operate on his still or boiler, but is the full measurement of the vessel.

132.

Bonded Spirits removed from Warehouses for Re-distillation, Rectification, &c., must in all cases whatever be returned to the same Warehouse.

Bonded spirits removed for re-distillation, rectification, or change of package, under the provisions of section 40, of the act of July 13, 1866, must be returned to the same warehouse, and a change in the ownership does not remove the necessity of such return.

133.

The General Inspector must inspect all Spirits produced by Apple Distillers, and re-inspect Bonded Spirits Rectified or Re-distilled.

The duty of inspecting bonded spirits which have been removed for the purpose of being rectified, re-distilled, canned or put into other packages and then returned, and of inspecting spirits manufactured from apples, peaches, or grapes belong to the general inspector.

134.

Apple and Peach Distillers must give Bond.

Distillers of brandy and other spirits from apples, peaches or grapes, are not exempted from the provisions of section 24, of the act of July 13, 1866, (section 122 of Compilation) requiring distillers to give bonds.

135.

Tax on Fresh Beer produced by creating a new fermentation of Flat Ale.

If a brewer purchase his products from another brewer before it has fermented, and mixes it with flat beer for the purpose of creating a new fermentation, the purchaser who thus manufactures a saleable article of beer must pay a tax on the full amount sold by him, or removed for consumption or sale; but such product sold before fermentation need not be included in the monthly account of beer, &c., sold by the person who sells it.

136.

Power of Commissioner in authorizing Collectors or Deputies to make Special Seizures.

Section 48, of the act of June 30, 1864, as amended by the act of July 13, 1866, provides that goods, wares, merchandise, &c., may, under certain circumstances, be seized by the collector or deputy collector of the proper district, or by such other collector or deputy collector as may be specially authorized by the Commissioner of Internal Revenue. This does not make it the duty of the Commissioner to designate any one collector to make general seizures, but confers upon him special authority to designate any collector or deputy collector not "of the proper district," whenever in his opinion the exercise of such authority becomes necessary or expedient.

137.

Re-inspection of Spirits and Liquors-Absence of Inspection Marks on Packages of Spirits, presumptive of Nonpayment of Tax or Fraud.

It is only when spirits are removed from an inspected package for the purpose of rectification, re-distillation or change of proof, that a reinspection is necessary. When removed for other purposes, as when a dealer puts them up in other packages for sale, a second inspection is unnecessary; but if such packages bear no inspection marks or brands, it will be presumed that no tax has been paid upon the spirits therein contained, and the person in whose possession they are found, should be prepared to rebut the presumption.

138.

Liabilities of Druggists or Chemists in Distilling, Recovering or Producing Alcohol-Special Tax.

No special tax is imposed for any still, stills, or other apparatus. used by druggists or chemists for the recovery for phamaceutical and chemical or scientific purposes, of alcohol, which has been used in those processes, but if used for its production, the usual taxes should be assessed and collected.

139.

Marking of Spirits in Bond prior to September 1st, 1866. Spirits manufactured prior to September 1st, 1866, and which are in bonded warehouses, need not be proved, gauged and branded. Provision is made in the law and in the regulations for marking such liquors when withdrawn from the warehouses, and those marks are sufficient.

140.

Inspection of Alcohol made from Tax-paid Whiskey. When whiskey is removed from an inspected package and made into

alcohol, it should be again inspected after its character has thus been changed, and the packages containing it should be properly branded.

141.

Distillery Inspectors must engage in no other Business. A stiller or beer runner cannot at the same time act as inspector of a distillery. An inspector can engage in no other business while employed as inspector, either for the distiller or for any other party.

142.

Medicated Spirits produced by distillery Drugs, Roots, &c., Liable to Tax of $2 per Gallon.

The product of stills though medicated by distilling drugs, roots, &c., is nevertheless liable to a tax of two dollars per gallon.

143.

Distillers of Spirits from Apples, Grapes, and Peaches exclusively, not required to pay per diem Compensation of Inspectors.

Persons employed in the distillation of spirits from apples, grape, and peaches exclusively, are not required to pay per diem compensation to inspectors.

144.

Regulations for Distillers and Refiners of Coal or Mir eral Oils.

(Circular No. 53.)

OFFICE OF INTERNAL REVENUE, Washington, October 17, 1866. By the act of June 30, 1864, as amended by the act of July 13, 1866, a tax is imposed upon illuminating, lubricating, or other mineral oils; and it is further provided "that distillers of illuminating, lubricating, or other mineral oils, naphtha, benzine, benzole, or gasoline, shall be subject to all the provisions of law applicable to distillers of spirits, with regard to special taxes, bonds, returns, assessments, removing to and withdrawing from warehouses, liens, penalties, forfeitures, drawbacks, and all other provisions designed for the purpose of ascertaining the quantity distilled and securing the payment of taxes, so far as the same may, in the judgment of the Commissioner of Internal Revenue, and under regulations prescribed by him, be deemed necessary for that purpose."

Under this authority, the Commissioner of Internal Revenue hereby prescribes that every person who refines, distills, or re-distills petroleum or other bituminous substances, or refines crude oil, produced by a single distillation of coal, shale, asphaltum, peat, or other bituminous substances, shall give a bond. (Form 28.) This bond must be taken by the collector, who will bear in mind that bonds already given under the provisions of former laws will not suffice.

Each distiller or refiner must keep a book, in form and manner sc forth in Form 25, which form is hereby prescribed, showing the quantity and description of the oil produced, the quantity placed in bond, and the quantity not placed in bond, and consequently subject to tax, and the quantity and description of oil sold by him, with the name and place of business or residence of the person to whom sold. If desired. by the distiller, the account of sales may be kept in a separate book.

A return will be made on Form 26, on or before the tenth day of each month, instead of tri-monthly as heretofore, showing the product of the preceding month, the quantity bonded, and the quantity subject to tax; and the tax is to be paid, like other monthly taxes, on or before the last day of the month in which the return is made.

By the act of July 13, 1866, section 10, paraffine oil, and lubricating oil made from petroleum, coal, or shale, not exceeding in specific gravity 36 deg., is exempt from tax, but such oil is made subject to the same inspections as illuminating oil: it therefore, follows that the entire product of the distillery or refinery must be inspected and gauged by an inspector appointed under the provision of section 58, act of June 30, 1864.

The establishment of bonded warehouses, for the storage of mineral oil, and the withdrawal of the same therefrom, will be governed by the regulations of March 1, 1865, issued by the Secretary of the Treasury, until otherwise directed.

Distillers and refiners of mineral oil are, by these regulations, released from the restrictions placed upon distillers of spirits by the present law, so far as relates to establishing bonded warehouses for the storage of their products, employing inspectors for each distillery at a per diem compensation, providing receiving cisterns, &c. They can also remove the oil produced by them directly from the distillery or refinery to a general bonded warehouse, Class A, as in the case of removal of distilled spirits. E. A. ROLLINS, Commissioner.

2

MISCELLANEOUS.

145.

No Deduction for Salary Tax on Compensation of Inspectors

of Distilleries.

No tax on salary is to be withheld from the compensation of inspectors of distilleries, and assessments on the distillers for their services, are to be entered upon the monthly lists (Letter of Commissioner, Oct 18, 1866.)