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(19707.)

Stamp tax-Bonds of brewers, etc.

Instructions in regard to stamping bonds of brewers, manufacturers of tobacco, manufacturers of cigars, distillers, etc.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., July 18, 1898.

SIR: Your letter of the 7th instant, inquiring whether bonds of brewers, manufacturers of tobacco, manufacturers of cigars, distiller's annual, distiller's warehousing, transportation and export bonds are required to be stamped under the provisions of the act of June 13, 1898, has been received. In reply, you are informed that they are required to be stamped with a 50-cent stamp under Schedule A when individuals are surety. When a guaranty company is surety, the bond should be stamped in addition with a stamp denoting one-half of 1 cent on each dollar or fractional part thereof paid by the principal obligor on the bond as premium. Where these bonds are required by law or regulation of this office to be made in duplicate or triplicate, each must be stamped.

Copies of distiller's bonds forwarded to this office for office use need not be stamped.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. CHARLES E. SAPP, Collector Fifth District, Louisville, Ky.

(19738.)

Stamp tax-Bonds given by guaranty companies.

Bonds issued by guaranty companies in Canada guarantying the fidelity of employees, individuals, or corporations in the United States.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., July 20, 1898.

SIR: Your letter of the 8th instant in regard to what amount of internal-revenue stamps it is necessary to affix to bonds issued by guaranty companies guarantying the fidelity of employees has been received. The stamp necessary on such a bond is 50 cents, also one-half of 1 cent on each dollar of premium charged or fractional part thereof.

As to whether the revenue law applies to bonds issued by guaranty companies in Canada guarantying the fidelity of employees of individuals or corporations in the United States, you are informed that if the bond is executed and delivered in Canada, the United States laws will not apply, but if it is not a valid policy until countersigned or delivered

by the agent of the company in the United States it should be stamped in accordance with the provisions of the act of June 13, 1898.

Respectfully, yours,

Mr. GEO. G. STREET,

N. B. SCOTT, Commissioner.

General Manager Great Central Route Blue Line, Rochester, N. Y.

(19845.)

Stamp tax-Renewal of bonds.

Tax on renewal of bonds of fidelity companies taking effect on or after July 1, 1898. TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., August 9, 1898.

SIR: Mr. Howard N. Baker, postmaster at Buffalo, N. Y., incloses to this office a renewal of a bond of one of the employees of his office, together with a letter from the agent of the American Surety Company, and asks to be informed whether such renewals are subject to the stamp tax.

It appears that the bonds of a number of the employees of the Buffalo post-office expired on or after July 1, 1898, and the American Surety Company, the guarantying company, under date of June 17, 1898, issued renewals thereof, and caused them to be delivered at the post-office prior to July 1, 1898. As the renewals did not go into effect until July 1, 1898, I am of the opinion that they require stamps as bonds, notwithstanding the fact that they were dated and delivered prior to that date. The stamp necessary on such a bond is 50 cents, also one-half of 1 per cent on each dollar of premium charged or fractional part thereof. N. B. SCOTT, Commissioner.

Respectfully, yours,

Mr. V. FLECKENSTEIN,

Collector Twenty-eighth District, Rochester, N. Y.

(20156.)

Stamp tax-Issue of bonds.

When a bond is said to be issued-Whenever a corporation issues a bond, and there accrues to the corporation a benefit or consideration for issuing the same, the bond is subject to taxation.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., October 6, 1898.

SIR: This office is in receipt of a letter, under date of September 16, 1898, from Winslow, Lanier & Co., bankers, New York City. Their letter is written with reference to two letters from this office, one under date of September 13 and the other under date of August 5, the former written to these gentlemen and the latter written to Mr. Robert W.

De Forest, general counsel for the Central Railroad of New Jersey. The question under discussion in these letters was the issue of bonds under Schedule A, act of June 13, 1898.

The decision reached by this office on the questions presented is this: The law does not provide for the transfer or assignment of bonds (the kind of bonds referred to being bonds evidencing the corporation's indebtedness); it only provides for the issuing of these instruments, and on each issue there is a taxation imposed of 5 cents on each $100 of face value or fraction thereof.

The question to be determined is, What is an issue under the law which would subject the bond to this taxation?

This office holds that whenever a corporation issues a bond, and there accrues to the corporation a benefit or consideration for issuing the same, the bond is subject to taxation. This rule will, therefore, exempt from taxation a registered bond sent in by A for cancellation, with directions to issue in its stead a bond to B and register it in B's name. This ruling would also exempt from taxation the issuing of a registered bond in lieu of a coupon bond, both being issued by the same corporation. After the corporation has placed upon the market all its bonds, and buys in, say, ten thousand dollars' worth of them, it has again acquired title to the bonds. Should they issue these bonds again, this office would consider that they receive a consideration or benefit by issuing them, and rules that on their issuance there would be imposed a tax of 5 cents on each $100 of face value. So, therefore, when a corporation has passed title to its bond to a person or persons, and this person or persons desires them transferred to another person, this transfer is not to be considered as an issue subjecting the issued bond to taxation. Where the title to the bond issued is in the company issuing it, this office considers that it receives a benefit or consideration on the issuance of the bond, and it is subject to taxation.

Respectfully, yours,

*

N. B. SCOTT, Commissioner.

Mr. CHAS. H. TREAT, Collector Second District, New York, N. Y.

BOWLING ALLEYS.

(See also BILLIARDS, ETC.)
(19610.)

Special tax-Bowling alleys and billiard rooms.

Special-tax stamp to be issued for each bowling alley, pool, or billiard table.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., June 30, 1898.

SIR: In reply to your letter of inquiry of the 22d instant, you are hereby advised that a separate special-tax stamp is to be issued for each

bowling alley, pool or billiard table. One stamp will not be made to answer for several tables, even though they are contained in a single room and operated by one person or firm (as you state).

Respectfully yours,

N. B. SCOTT, Commissioner.

Mr. J. E. HOUTZ, Collector Internal Revenue, Omaha, Nebr.

(19890.)

Special tax-Bowling alley.

No special tax required on bowling alley used only one day in each year at Sunday

school picnic.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., August 13, 1898.

SIR: Your letter of the 8th instant has been received, inclosing a letter from Mr. Aug. Luhrsen, secretary of the German Congregation at Buckley, Ill., inquiring whether a bowling alley used only for one day in each year, upon the occasion of the annual Sunday-school picnic, the proceeds being devoted to church and Sunday-school purposes, is liable to special tax.

In the opinion of this office, the bowling alley thus set up and used is not one that is open to the public within the meaning and intent of paragraph 9 of section 2 of the act of June 13, 1898, and, therefore, this church congregation is not required to pay a special tax thereon. N. B. SCOTT, Commissioner. Mr. RICHARD YATES, Collector Eighth District, Springfield, Ill.

Respectfully, yours,

(20021.)

Special tax-Bowling alleys.

Bowling alleys at a college used exclusively by students, and occasionally some invited friends, are not subject to special tax under section 2, act of June 13, 1898.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., September 7, 1898.

SIR: In reply to your letter of the 1st instant, stating that in the gymnasium building of the Centre College there are three bowling alleys, and that this gymnasium is used exclusively by the students of the college, except that as a mere matter of courtesy some five or six gentlemen of Danville are allowed by the professor of athletics the privilege of bowling, free of charge, one or two nights in the week, at a time when the place is closed to the students, you are hereby advised

that special tax is not required to be paid for these bowling alleys under the ninth paragraph of section 2 of the act of June 13, 1898.

In the opinion of this office, these bowling alleys, used as you state, are not "open to the public" within the meaning of that paragraph. Respectfully, yours, G. W. WILSON, Acting Commissioner. Mr. J. W. YERKES, Collector Eighth District, Danville, Ky.

(20263.)

Special tax-Bowling alleys.

The ninth paragraph of section 2 of the act of June 13, 1898, imposing special tax on proprietors of bowling alleys, requires the special tax to be paid for "each alley;" and it is held that where there are distinct and separate tracks on which separate games of bowling can be played at the same time each of these is a separate alley, for which the special tax of $5 must be paid.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., October 28, 1898.

SIR: In reply to a letter addressed to this office on the 5th instant by Mr. W. P. Brown, of Asheville, * you will please inform him that under the ninth paragraph of section 2 of the act of June 13, 1898, it is not the covered place or room in which "bowls are thrown" for which special tax is required to be paid, but "each alley;" and it is held by this office that where there are two distinct and separate tracks on which two games of bowling can be played at the same time, each of these is a separate bowling alley, and a special tax of $5 must be paid for each of them.

Mr. Brown's contention (in such a case) that it takes two tracks to constitute a complete alley is not accepted here as a correct construction of the statute.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. H. S. HARKINS, Collector Fifth District, Asheville, N. C.

(20313.)

Special tax-Pool table; bowling alley.

A special-tax stamp taken out by a person for a pool table can not, upon his dismantling the pool table, be made to answer for a bowling alley.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., November 10, 1898.

SIR: Your letter of the 5th instant has been received, concerning a retail liquor dealer who has

paid special tax as proprietor of a pool

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