Shenandoah herald. [volume] (Woodstock, Va.) 1865-1974, 1875-04-15
IM?oE FAINT DECISIONS.
AMP, TAX ON NOTES AND DRAFTS.

~" S,i"oo stS W tBc litUiiiuy w oe"i'P
tax OF notes and drafts made payable
at bank, etc, will be found of interest
to bankers, merchants, and to the busl.
ness community generally, as it settles
several questions concerning whic h
there has been considerable difference
of opinion:
TREASURY DEPARTMENT.
OFFICE OF INTERNAL REVENUE,
WASHINGTON, April 9, 1875.
Lucian Hawley, Esq, Supervisor Internal Revenue
New York. N. 7. ta ,5
SsR-Nume:ous letters have been re-
ceived at this office making inquiry as
to the liability to stamp tax Of notes
and drafts made payable at bank, etc.
1t is not believed to have been the
meaning and intent of Congress to
require stamps upon promissory notes
made in the usual commercial form and
payable at bank, when such notes are
given in good faith, and in the ordinary
course of business. Under a strict in
depreciation of the law, they might
perhaps be held liable as vouchers. :"
1t is well known, however, that the
leading purpose Of the recent enact>
ment, with regard to stamping bank
| checks, vouchers, etc. CSection Is, act
of February 8, 1879, was to cut off
the frequent evasions of the stamp tax
on checks, as, for instance, by the use
of receipts, checks payable nominally
one day after date without grace, ETC.
etc. a@t '-F
Unless the notes referred to are used
simply as substitute for checks as
evasions Of the stamp tax on checks,
this Office will not insist upon their
being stamped. t| ~
The above remarks will also apply
to drafts upon private parties not bank
ers, etc, accepted payable at bank.
A receipt which performs the work of
bank check, as for instance, where a
person who has money on deposit with
bank, draws out portion of it, but
instead Of drawing it out upon check,
gives the bank his receipt therefor,
which is taken by the bank and held
as voucher, is considered liable to
the tax.
If a dividend due a stakeholder has
been credited to his deposit account
upon the looks of bank, it has be
come deposit and receipt given for
any portion Of it, would, in my opinion
be liable to stamp tax.
But while receipt given for
dividend which has not lost its identity
by taking the form of a deposit, might
perhaps under strict construction of
the statue be liable to the stamp tax, ii
would not, in my opinion, fall with its
intent and meaning, and this office will
not insist upon Its being stamped.
Section 6, of the Act Of March 3,
1875, exempts from the tax the re
ceipts in the receipt book of savings
bank or institution tor savings, having
no capital stock and doing 10 other
business than receiving deposits, to be
loaned or invested for the sole benefit
Of the parties making such deposits
without profit or compensation to the
association or company, when money
is paid to depositor on his pass book
The banks referred to in the above
exemption are those which properly
make returns on ssForm 1O6 A." and
collectors should require stamps on the
receipts of depositors in receipt books
kept by any other banks Some banks
whose returns should properly be made
on ''Form t06 B. are in fact erro.
neously making then on Form 1916 A.
This error should lie corrected Re
ceipt books of such banks should, of
course, be stamped.
A certificate Of deposit, which is
such on its face and represents. money
actually deposited in book by person
to whom it is issued, is not considered
liable to stamp tax. The money re-
presented by such certificates should be
returned and taxed as deposits.
Checks drawn on their own bank, by
bank officers or clerks for their sala
ries, should be stamped "Cashiers'
checks" III general, issued or delivered
to outside parties for payments, etc, re
quire it to be stamped.
Checks drawn by bank officers mere
ly for the purpose Of charging an ac~
count with items, as an inside transac-
ton Of bank, but not issued, are held
to be exempt.
Inland bills Of exchange upon bank
etc, and bills drawn in a foreign coun-
try upon bank, banker OF trust com
| pany in the United States, should be
stamped before being accepted, nego-
tiated orpaid.
Drafts or bills drawn in the United
States upon foreign country need not
be stamped, not being vouchers in
the meaning of the law while in this
country. Interest coupons are exempt.
Duplicates OF bills, elders, etc, are liza
bic to the same as originals. Receipts
not relating to bank business, for in.
stance for rent, are exempt.
Checks drawn upon bank upon it
self for the purpose of paying it's own
dividends and the dividends, coupons
or interest of other corporations, and is
sued, should be stamped.
Checks drawn by State, county or
city officers, IN the official capacity, ups
on public funds deposited in a bank, are
exempt if said funds are kept separate
from private accounts.
Section Is of the act of February s,
1875, imposes stamp tax of two cts
npon sbank check, draft, order or
voucher for the payment of any sum OF
money whatsoever, drawn upon any
bank, banker, or trust company This
is the only stamp tax upon written in
struments issued on OF after October l,
1872, now in force.
1t imposes the tax upon checks, or
/ leo,