New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-06-06
POST EXCHANGES NOT TAXABLE.
A DECISION OF THE LONG-vEXED QUESTION MADE
by THE TREASURY DEPARTMENT.

A DECISION OF THE LONG-vEXED QUESTION MADE
by THE TREASURY DEPARTMENT
Washington June 5 (SpeciaD-A warm argument
has been carried on between Treasury officials and
Army officers TO the right OF the Commissioners
OF Customs make post exchanges at military sta
lions pay taxes exacted from private persons who
sell certain articles. 1t discovered some time
ago by the revenue officers that Lieutenant Heiner
4th Artillery the post exchange officer at Wash
ington Barracks. selling oleomargarine with
out paying the special revenue tax therefor tax
vas then assessed for future sales and penalty
was levied for sales In the past and the post ex-
change officer was instructed to come up and settle
or take the consequences. II was about the time
the dealers In this city were being prosecuted in
the criminal courts for selling the same article In
violation OF law. Lieutenant Heiner reported his
unpleasant predicament to the War Department
and TO Major J. n. Morrison. OF the Judge Advo-
cate Generals Corps. was assigned the task OF
bringing him safely out OF 1t.
Major Morrison asked the Treasury Department
TO abate the tax on the ground that the post ex-
change Is agency or instrument OF the United
States and therefore not taxable under the inter-
nal or other revenue laws or Ivy the individual
States After a thorough discussion by oral argu-
ments made on several OCCASIONS and subsequent
written arguments and briefs. the Treasury De-
partment adopted Major Morrsons view OF the
matter and ordered the assessment for the sale OF
oleomargarine abated As the conclusion affects all
Army posts. It is of Importance to the military SER
vice.
The Treasury Department had held in a decision
dated December g. 1888 that the caHteen then In ex-
is,snce being IAN organization In the nature OF a
private arrangement for the personal comfort and
benefit OF ndicidual soldiers" was subject TO tax
for furnishing manufactured tobacco, cigars. Gig
arettes and malt liquors to enlisted men Major
Morrsons contention was that the canteen had
been superseded by the post exchanges introduced
by the War Department on February L. 1879.
through Army regulations duly Promuisated. he
oh haf
IAN institution established and maintained for
and I'm the Interest Of the Government service. and
the business OF which is conducted and carried on
by officers OF the United States In the performance
az their duties as such officers. and under and pur-
suant 10 regulations duly adopted and promul-
gated must necessarily be a Government agency
or instrumentaty and therefore not taxable under
the laws OF the United States or by the States.
The Treasury Department has adopted this view
and ordered the assessment for oeomargarine
abated. -. l., - 49,, -. al
taxation OF post exchanges 50 long as they are
maintained as they are. He also says that II
the most exchanges that have been paying internal
revenue taxes since February 1880 on the sale OF
we'll as oleomargarne. desire TO have their money
refunded. they have only 10 make the proper appI'
cation 10 the Treasury Department