Baltimore daily commercial. [volume] (Baltimore, Md.) 1865-1867, 1865-11-13
Tnporaassg FntqrnnI RcScEue :seciEion.

The Commissioner Of internal Revenue has rem
dcred the following decision relative to the mode of
determining increased values" under sections 9l
and %, and the persons liable for the tax to he as
seSsed thereon
The 95th section Of the act of June 80 1865, pro-
vdeS that whenever manufactured article on
which an excise or mpost duty has been paid is in
creased in value more complotcly fitted for or
sale hV belng polished, painted. vanished waxed,
oiled, glided eectrotyped, galvanized plated .Ec.,
the tax is to he levied collected, and paid upon the
amount of such increased value
The conditions stated in the section authorizing
this mode of assessing the tax are-) the article
must be manufactured article; % an mpost
clse duty must have been previously paid thereon:
@) the article must be not specially provided for
under any other section Of Tie law: and "a the orig
nal character purpose for which the article was
intended to be used must not be changed. When all
these conditions concur the tax is properly assessed
On the increased value # one or moro of these con
dions are wanting; if the article is not manufac-
ured article or fno tax has been paid uron it, if
it is specially provided otherwise or the original
character or purpose for which il intended to be
used Is changed 1t cannot properly he taxed under
section % on increased value;
The law itself points out the mode of ascertaining
the increased value for all purposes Of this section
1t declares that the amount of such increased value
is to be ascertained by deductng from the value of
the finished article when sold removed for sale
delivery or consumption, the cost value Of the
original article to the person firm or company liable
to the yimpoSed the increased value thereof
Take an example: A buvs unfinished article
for which he pays So more completely finishes and
fits it for use sale by any of the processes enumer
ated in section 95, at cost of $3.50 adds profit of
twenty-fve per cent. S.3S and sells the article for
Now, with the rule given above the problem is one
very easy of solution. Deducting from the price of
the finished article when sold S6SS the cost II the
original article, So we have S3.SS, the increased
value which tax of per cent is to be assessed
and paid.
But suppose like article is sent by some dealer or
other person to B, to be finished &c, and returned,
and receives $3.50 for the material and labor he
expends upon the article in finishing it, &c but does
not know the cost of the original article or the price
for which the finished article is to be sold, sale
yet having been made. What is the increased value
in this case? How is it to be determined, and who is
liable for the tax?
am aware that it is strongly contended that the
increased value in this case is merely the $50 which
receives for finishing, &c.; that this sum should
return, and pay the tax thereon of l2@ cents. Not
So 1t does not satisfy the requirements of the law
it taxes 4 on S,SS than his neghbOr, with
whom he comes in competition, pays upon, and it is
by the same amount a short return to the Govern
ment.
The law makes provision for such cases as this II
regards the fnishcr, &c. as the employee furnished
with materials part thereof paid for manufactu.
ring, making finishing the goods, and returning
them when made or finished to the owner. In
such cases the law regards the owner as the manuiac
finished article when sold or removed for sale deliv
cry consumption. His sales constitute the basis
for the assessments; the value from which the cost of
the original article to be deducted to ascertain the
increased value.
The tinisher, &C. has only to return the amount of
his work for each month, and name in his returns the
party or parties for whom the labor OF finishing is
performed These returns are to be sent to the as
SCISSOR OF the district wltnin when the parties reside
have their place of business for whom the finish
ing, &c, is performed, that he may forthwith pro
| ceed to ascertain the amount of increased value
| according to one of the modes l have pointed out
that the tax due thereon may he paid by the party
parties liable for the tax. Sections SS and 90 clearly
auth horize this mode of assessment and provide for
| such cases
| If however, it is convenient for the parties
interested that the tax shall be assessed upon and
paid by the fnisher, to be collected afterwards by
him of the owners authorized by the SD section
| then the increased value may be determined by de-
ducting from the fair market value of the finished
article the market value of the original article
| These values presume at all times be ascertain
ed with sufficient accuracy to satisfy the Government
and will do no injustice 10 the tax who is dis
posed accept the easiest mode of asceraining his
liabilities and is ready to rather than multi
ply obstacles in the way of assessing the Government
| tax.
Repairs Of engines cars carriages. or other articles
liable to tax increased value under section "a,
to be assessed the cost of such repairs There
being sale of the article in such cases, the
of repapairng is the only practical measure of in
| creased value.
The mode Of ascertainino the increased value and
assessing the tax articles taxed increased value
under section a. is the that under section 95
but the rate of tax is six per cent instead of five per
| cent. L. A. ROLLINS,
| Commissioner.