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TAX PAYERS' GUIDE:
RULINGS AND DECISIONS
HON. JOSEPH J. LEWIS,
COMMISSIONER OF INTERNAL REVENUE,
UNDER THE ACT OF JUNE 30, 1864.
COMPILED AND ARRANGED BY
C. R. FIELD,
CHIEF CLERK, ASSESSOR'S OFFICE, FIRST DISTRICT, ILL.
CHICAGO, ILL. :
JOHN R. WALSH, PUBLISHER,
CORNER MADISON AND DEARBORN STREETS.
RULINGS, DECISIONS AND CORRESPONDENCE.
MANUFACTURES AND PRODUCTIONS.
DECISION in regard to Manufacturers and the Place of Manufactura
1. Any person, firm or corporation, owning or hiring a factory, tannery, shipyard, workshop, or other place of production, and managing or controlling the business, whether by personal oversight or through an agent, overseer, or foreman, is deemed and held to be the manufacturer; and the place of manufacture is the factory, tannery, ship-yard, workshop, building, or premises where the goods or articles are actually made or produced.
2. The manufacturer, as defined above, is held liable to make returns to the Assessor of the district where his place of manufacture is located, of the amount, quantities, and values of goods, wares, merchandise, and articles manufactured or produced and sold or delivered, whether manufactured or produced for himself or others.
3. When any goods, wares, merchandise, or articles, are sold at the place of manufacture, or removed for consumption or use, or are consigned to auction or commission merchants, or delivered to others than agents of the manufacturer, the duties thereon immediately accrue, and the Assessor within whose district such goods are manufactured, must proceed to make the assessment.
4. When any goods, wares, merchandise, or articles, are delivered to an agent to whom is committed the authority to sell for the manufacturer or producer, at a place of business of such manufacturer or producer, no tax accrues or can be assessed on such goods until the same is sold.
5. When goods, wares, merchandise, or articles, are removed in an unfinished state, from one collection district to another, by the manufacturer or owner, in order to be more completely finished before being sold or removed for consumption or sale, the place where such goods are finished, is the place of manufacture, and the return of such goods should be made to the Assessor of the district where the same are finished.
6. When a person or firm furnishes materials, and employs different parties as mere operatives to build, construct, complete, finish, or repair any goods, wares, merchandise, or articles—the several parties employed each doing a portion of the labor required, while the owner of the materials directs and controls the whole operation through the different stages of production-such owner or owners must be held to be the manufacturers, and liable to pay the tax. The proper place for the assessment and payment of this tax, is in the district where the manufacturers have their place of business.
DECISION in regard to the Liability of Manufacturers to License, and to pay Excise
1. Under the act of July 1, 1862, persons or corporations making articles for their own use or consumption, and not for sale, or for others, were not liable to be assessed for a manufacturer's license; but under the act of June 30, 1864, all such persons or corporations who shall manufacture, by hand, or machinery, any goods, wares or merchandise, exceeding annually the sum of one thousand dollars, are liable to assessment for a license, and cannot lawfully continue to manufacture without being first duly licensed.
2. Under the act of July, 1862, manufacturers were exempt from taxation, whose annual product did not exceed six hundred dollars ; but when it did exceed that sum, they were taxable on the entire amount produced and sold, or removed for consumption. Under the act of June 30, 1864, section 93, manufacturers, whose product does not exceed the rate of six hundred dollars per annum, and is made or produced by the labor of such manufacturers or their families, are exempt from excise duty. When the product exceeds such rate, and does not exceed the rate of one thousand dollars, they are to be assessed only upon the excess above the rate of six hundred dollars per annum. In all other cases, the whole annual product is to be assessed, and the duty paid.
3. “Refined petroleum, refined coal oil, gold and silver, spirituous and malt liquors, manufactured tobacco, and snuff and cigars, are not entitled to any exemption ; but, in all cases, the entire product of such manufactures is subject to assessment and payment of duty.
DECISION with reference to Deductions under the 86th Section.
Under the provision of the 86th section, of the Act of June 30, 1864, the following deductions only can be allowed :
1. When goods, wares and merchandise, are sold by the manufacturer or producer, or his agent, having the charge of the business, at the place of manufacture or production, there may be deducted from the sale price, the cost of packing for delivery, and the freight or cartage from the place of the contract of sale to the place of delivery to the purchaser, or according to his order ; also, the cost of inspection, where goods are required to be inspected before they can be sold in a particular market. In case the goods are sold on time, the usual discount for cash for such goods in the market where they are sold, may be deducted. No deduc. tions can be allowed for guarantee, insurance, or for labor expended on goods or wares necessary to put them into a complete marketable condition, nor for barrels, boxes, cases, bottles, packages, or wrappers, used in putting up goods for sale, these being regarded as items in the cost of production, and therefore not properly a part of the expenses of sale.
2. When goods are sold by the manufacturer or his agent, at places other than the place of manufacture or production, in addition to the deductions already mentioned, there may be allowed a commission not exceeding three per centum. Store rent, clerk hire, fuel, lights, and advertising, are expenses incident to the agency, and cannot be reasonably charged against the proceeds of sales. They are covered by the commissions expressly allowed to the agent. Freight, from the place of manufacture to the place of deposit or sale, is not a deduction authorized by law, and cannot be allowed.
3. Where goods, wares and merchandise, are consigned to auction or commission merchants for sale, or placed on shipboard, to be removed from the United States, or when consigned to other than agents having special charge of the business of such manufacturer or producer, or when used or consumed by the manfacturer or producer, or his agent, no deduction can be made on the market valuo at the place of manufacture or production.
4. The word agent, as used in the above section, is understood to mean a person to whom is committed the authority to sell for the manufacturer or producer, at a place of business of such manufacturer or producer, and not a person doing business as a commission merchant, and as such employed in selling goods consigned to him for the purpose.
CIRCULAR 'No. 24.
REGULATIONS concerning Goods and Articles Manufactured for the United States
from Materials furnished by the Government.
By the last clause of the 83rd section, of the Act of June 30, 1864, it is provided, that in all cases of goods manufactured or produced, in whole, or in part, on commission, or where the material is furnished by one party and manufactured by another, if the manufacturer shall be required to pay under this act, the tax hereby imposed, such person or persons so paying the same shall be entitled to collect the amount thereof of the owner or owners, and shall have a lien for the amount thus paid, upon the produced or manufactured goods."
Whenever any person, firm or corporation, shall manufacture or produce, under contract with the Government, and from materials furnished by the United States, any goods, wares, merchandise, or article made taxable by the Act of June 30, aforesaid, such person, firm or corporation, may be released from the payment of any excise tax thereon, by furnishing to the Assessor of the district where such goods are made or produced, a certificate from the officer by whom the contract was executed on the part of the United States, stating that the materials for the manufacture or production of the same were furnished by the Government, and that the goods were made or produced for the United States.
The contractor or manufacturer, must also furnish to the Assessor, a certificate of the officer to wliom such goods, or the articles so manufactured or produced, are delivered, stating the quantity and description of the same received during the month specified, and that the same were accepted by the Government.
When parties allege, that their manufactures or productions, as aforesaid, are made for the Government, the Assessor will await a reasonable period of time before making any assessment, to allow the procuring of the proper certificates ; and on the receipt of the same, duly authenticated, he will omit to make any assessment of goods or articles made or produced for the Government under circumstances as set forth above.
REGULATIONS for the Release of Contractors with the United States from the increased
Duties imposed by the Act of June 30, 1864.
Section 97, of the Act of June 30, 1864, provides that where the United States is the purchaser of articles on which a duty is imposed, or the duty increased, by the act, under a contract made prior to the passage of the act, the certificate of the proper officer of the Department by which the contract was made, showing, according to regulations to be prescribed by the Secretary of the Treasury, the articles so purchased, and liable to such subsequent duty, shall be taken and received in discharge of such subsequent duties on articles so contracted to be delivered and actually delivered according to such contract. The following regulations are therefore prescribed:
Where any contractor desires to avail himself of this provision, it will be his duty to procure and present to the officers of internal revenue, the certificates prescribed.
The contractor must procure the certificate of the officer to whom such articles are delivered, setting forth that he has actually received such articles during the month specified, with the quantity and description of the same, and that the articles were delivered under a contract duly executed prior to the 1st of July, 1864. The certificate should also give the date of the contract, and the name of the officers by whom the contract was executed on the part of the United States. To this certificate, should be appended the certificate of the head of the Department in behalf of which said contract was made, or his assistant, that the officer making such contract was duly authorized so to do, and that the officer to whom such articles were delivered, was duly authorized to receive the same on behalf of the United States.
These certificates will be presented to the Assessor of the district in which such contractor has been assessed, who will certify thereon the amount of the duties so subsequently imposed on such articles, over and above the rate existing prior to July 1, 1864. Such certificates should be executed in duplicate, and as the duties on said articles must be regularly assessed in each month, at the rates