In reply, you are advised that this office has always ruled that certificates of the nature described above, and all papers or instruments relating to the exercise of the elective franchise, are exempt from the stamp tax imposed by Schedule A of the war-revenue act, by section 17 of said act. Respectfully, ROBT. WILLIAMS, Jr., Acting Commissioner. Mr. JAMES H. MILLER, Charleston, W. Va. CHARTER PARTIES. (25.) Stamp tax-Charter party. Where more than one vessel is chartered under one charter party, tax accrues on the basis of the net registered tonnage of each vessel. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 27, 1900. SIR: This office is in receipt of your letter of January 20, 1900, in which you state that Deputy Collector Basch reports that while making an examination of the business of A. F. Churchill, ship broker at Savannah, Ga., he found two unstamped charter parties, which he did not cause to be stamped for the reason that there was a question as to the tax that was due on said instruments. The following are the facts with reference to said charters: One of the charter parties provided that the steamship St. Quentin shall make four voyages from Savannah, Ga., to a port in Europe; that the steamship St. Kilda shall make four voyages, and the steamship St. Ronald shall make two voyages. Under the terms of the charter, it is optional with Mr. Churchill to require the vessels named to make the trips specified therein. The owners of the vessels simply bind themselves to make these trips if required. The St. Quentin has made two voyages, the St. Kilda has made two voyages, and the St. Ronald has made one voyage. The other charter party was made August 31, 1899. It provides that the steamship Winifred and the steamship Crewe shall each make one voyage. The terms of this charter have been fully complied with. of the steamships in question have a net registered capacity of more than 600 tons. All Mr. Basch was of the opinion that the charter party of July 26 should be stamped $50 ($10 for each voyage), and that when other voyages were made an additional stamp of $10 in value should be placed upon the instrument; that the charter of August 31 should be stamped $20 ($10 for each vessel). Mr. Churchill's position is that one stamp of $10 is all that is required on each document, no matter how many vessels are provided for or how many voyages each vessel is to make, or can make, under the terms of the instrument, and you request that this office instruct you in the matter. You are advised that but one tax accrues upon a charter party for a single vessel, no matter how many voyages are therein contracted for said vessel to make. But if more than one vessel is contracted for under the same charter, tax accrues on the registered net tonnage of each vessel, separate and distinct from the other vessels contracted for in the same charter party. Therefore, the tax accruing on the charter party dated July 26 amounts to $30, while in the case of the charter party dated August 31 the tax amounts to $20. Respectfully, G. W. WILSON, Commissioner. Mr. D. A. GATES, Revenue Agent, Atlanta, Ga. (118.) Stamp tax-Charter parties. Exemption of enrolled vessels plying between ports in the United States and those of Porto Rico. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., May 4, 1900. SIR: I have to acknowledge the receipt of your letter of the 28th timo, written in behalf of the New York and Porto Rico Steamship Company, in reference to the tax on charter parties imposed by Schedule A of the act of June 13, 1898. You say that the act of April 12, 1900, provides among other thingsThat the coasting trade between Porto Rico and the United States shall be regulated in accordance with the provisions of law applicable to such trade between any two great coasting districts of the United States. You state that you believe that this will entitle vessels of American registry plying between ports in the United States and those of Porto Rico to enrollment under Title L of the Revised Statutes of the United States, and you ask to be advised whether this Department will require the charters of such vessels to be stamped in accordance with the provisions of the act of 1898. In reply, you are advised that the subject of the enrollment of vessels is not a question within the jurisdiction of this office, but if such vessels be enrolled, the charter parties will be exempt from tax under the principles announced August 3, 1898, in Treasury decision 19823. G. W. WILSON, Commissioner. Respectfully, Mr. JAMES H. HAYDEN, Washington, D. C. CHECKS, ORDERS FOR PAYMENT OF MONEY, NOTES, AND CERTIFICATES OF DEPOSIT. (3.) Stamp tax-Orders for payment of money. Orders for the payment of money are required to be stamped, although intended merely as receipts or vouchers.-The drawer of the order is liable for the stamp, but, besides this, the maker, or party for whose use or benefit the order shall be made, signed, or issued, is liable also. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 30, 1899. To collectors of internal revenue and others: The appended decision of the United States circuit court, district of South Carolina, is published for the information of all concerned. G. W. WILSON, Commissioner. THE UNITED STATES OF AMERICA-DISTRICT OF SOUTH CAROLINA— IN THE CIRCUIT COURT, FOURTH CIRCUIT. Granby Mercantile Company v. E. A. Webster, as collector of internal revenue for the district of South Carolina. The question presented in this case, lying as it does in a very narrow compass, is nevertheless important. The Granby Mercantile Company had an understanding with the Granby Mills, whether put into formal contract or not does not appear. Under this contract or understanding the mercantile company sold goods to the operatives of the mills on credit. When the accounts for such sales were presented to the treasurer of the mills they were paid out of the moneys due to the operatives making them, for wages in the mills, the mercantile company guarantying the mills company the correctness of the several accounts. To protect itself and as vouchers for each transaction, the mercantile company at each sale took from the purchaser an order in this form: COLUMBIA, S. C., GRANBY COTTON MILLS pay to the Granby Mercantile Company cents, for my account. dollars Witness: The Granby Mercantile Company never presented these orders to the mills, but filed them away as vouchers, probably to be presented in case the maker disputed the account. The collector of internal revenue, discovering this mode of dealing, called upon the Granby Mercantile Company to affix the 2-cent revenue stamp upon each of these orders. He insisted upon this demand, and the Commissioner of Internal Revenue, upon an appeal to him, sustained the decision of the collector. The mercantile company paid the demand, 2 cents upon 15,847 orders, in all $316.94, and now brings suit for its repayment. (Section 3226, Revised Statutes of the United States.) The collector proceeded under section 6 of the act of Congress approved June 13, 1898, entitled "An Act to provide ways and means to meet war expenditures, and for other purposes," passed in second session, Fifty-fifth Congress. The section is in these words: "That on and after the first day of July, eighteen hundred and ninetyeight, there shall be levied, collected, and paid, for and in respect of the several bonds, debentures, or certificates of stock and of indebtedness, and other documents, instruments, matters, and things mentioned and described in Schedule A of this Act, or for or in respect of the vellum, parchment, or paper upon which such instruments, matters, or things, or any of them, shall be written or printed by any person or persons, or party who shall make, sign, or issue the same, or for whose use or benefit the same shall be made, signed, or issued, the several taxes or sums of money set down in figures against the same, respectively, or otherwise specified or set forth in the said schedule." Schedule A, referred to in this section, requires a stamp of 2 cents on "Bank check, draft, or certificate of deposit not drawing interest, or order for the payment of any sum of money, drawn upon or issued by any bank, trust company, or any person or persons, companies, or corporations at sight or on demand." The collector requires a stamp upon instruments referred to in the case at bar because they are orders for the payment of money. There can be no doubt that they are orders for the payment of money and nothing else. The language used can have no other interpretation. The plaintiff, however, says that whatever may be their form, they were not intended for presentation, were never in fact presented but were taken, kept, and filed by the mercantile company as vouchers for each sale. The case of United States v. Isham (17 Wall., 496) says: "The liability of an instrument to a stamp, as well as the amount of such duty, is determined by the form and face of the instrument, and can not be affected by proof of facts outside the instrument itself." And this rule commends itself. Were it necessary to inquire into all the circumstances attending the execution of an order for the payment of money, before it can be ascertained whether it be liable to the stamp tax, endless delay would be occasioned. The purpose of the tax-the prompt relief of the Treasury-would be defeated. The important question, however, is this: Who is liable for the stamp? The drawer of the order unquestionably is. He comes within the words of the act, being the person "who makes, signs, or issues" the order. But, beside this, the payment must be made by the maker or by the party "for whose use or benefit the order shall be made, signed, or issued." In the case at bar, "for whose use or benefit" were these orders made or signed or issued? The transaction is this: The operative makes the purchase. He can not, or does not desire to, pay cash. But the mermantile company is unwilling, or at least does not intend, to rely on the personal credit of the operative. It takes from him an order on the mills company payable out of the account of the operative with the mill company. That is the security which the mercantile company takes, and it is taken for its benefit. Whether it be presented then, or is kept for presentation at some time in the future if needed, or whether it be retained simply as a voucher, a verification of the account, it is taken for the use of the mercantile company. So that company comes within the words of the statute. It can not be said that these words "or for whose use or benefit the same shall be made, signed, or issued," apply to the drawer of the order. If this were so, the words quoted would be entirely superfluous, mere surplusage, nor would the disjunctive "or" have been used to connect these words with the words preceding. This seems conclusive of the question. missing the complaint. Let an order be taken dis CHARLES H. SIMONTON, Circuit Judge. (24.) Stamp tax-Orders for payment of money. Receipts for insurance premiums, gas, water, telephone bills, and the like, when paid by banks and charged to depositors' accounts, must have a 2-cent stamp affixed thereto as orders for payment of money. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. O., January 25, 1900. SIR: This office is in receipt of your letter of January 9, 1900, in which you refer to office letter addressed to you under date of December 21, 1899, relative to the exemption from tax of receipts for insurance premiums when presented to and paid by banks and charged to the accounts of depositors, and state that throughout your district insurance companies, gas companies, water companies, and, in fact, all institutions transacting business where dues or bills are collectible monthly, have adopted the plan, where their patrons do not object, of presenting the receipts or bills to the banks in which the patrons keep their accounts, where they are paid and charged to the patrons' accounts, and in view of the widespread use of this method you think that all such receipts or bills, when cashed by banks and charged to depositors' accounts, should be stamped as orders for the payment of money. You are advised that in view of the widespread use of the method above referred to, this office hereby rules that receipts for insurance premiums, monthly gas, water, or telephone bills, and, in fact, all similar receipts or bills, when cashed by a bank and charged to depositors' accounts, must have affixed thereto a 2-cent stamp as orders for the payment of money. This applies not only when such bills or receipts are cashed by a bank at the request of a depositor, but also when cashed by a bank without any expressed authorization from the depositor, but with his implied authority, as shown by his acquiescence. All former rulings contrary to the above are hereby revoked. Respectfully, G. W. WILSON, Commissioner. Mr. JACOB E. HOUTZ, Collector Internal Revenue, Omaha, Nebr. |