The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1901-08-20
Tobacco Is Being
Sold Which PAYS
No Tax.
IS DEFRAUDED
Small Dealers, Not Manufacturers.
Buy Leaf From Growers and
Sell it Again.
WHOLESALE attempt to defraud

w HoLESALE attempt to defraud
~ the Government of the special tax
u on tobacco is being made by the
small dealers of the city, chiefly among
Chinese and japanese, in the sale of
leaf tobacco upon which no stamp has
been placed
The penalty for such violation of, the
law is severe and a warning having
now been given to the dealers guilty of
such criminal evasion of the law, In
will proceed to act. Deputy Collector
Cousins called attention yesterday to
the repeated violation of the law re-
quiring the payment of a stamp tax Of
twelve cents upon each pound of leaf
tobacco sold. He said that these are
not the first offenses against this par
laws, but they have now become so Sc
rious as to require a stringent enforce
ment of the law.
A short time ago some of the many
small tobacco dealers about the city
were arrested for selling tobacco with
out having paid the license required. AS
the violation of the law was through
| ignorance, these cases were settled by
the payment of the annual license of $6
as dealers. Other dealers were also
warned of the requirements of the law,
and in every case this annual tax was
paid
It has now come to the ears of Dep
uty Collector Cousins that these dealers,
presuming upon the tax they have paid
as such dealers, are violating the law
| to an even greater extent. Farmers
and growers of tobacco are exempt
| from the tax as manufacturers, and
may sell leaf tobacco of their own rails
| ing to whomsoever they please. But the
law requires that the person who buys
! this tobacco must stamp and pack it in
original packages If he wishes to offer
! it for sale again. This is just what the
small dealers are not doing. They are
buying the leaf tobacco from the farm
ers in and about Honolulu and selling
| 1t again without paying the tax or COM
plying with the law in any particular.
| The particular section of the internal
revenue law applying to this case is as
follows:
Every person shall als3 be regarded as
| a manufacturer of tobacco whose buSf-
ness it is to sell leaf tobacco in quanti-
ties less than a hogshead, case or bale:
or who sells directly to consumers, or to
persons other than duly registered deal
ers in leaf tobacco, or duly registered
manufacturers of tobacco, snuff or cigars.
or to persons who purchase. in packages
for export; and all tobacco SO sold by
such persons shall be regarded as manu-
/ factured tobacco, and such manufactured
tobacco shall be put up and prepared
by such manufacturer in such packages
only as the Commissioner of Internal
Revenue with the approval of the Secre-
tary of the Treasury shall prescribe:
Provided, That farmers and growers of
| tobacco who sell leaf tobacco Of their
own growth and raising shall not be re-
garded as manufacturers of tobacco.
The failure to pay the tax of twelve
, cents per pound Is not the least part OF
the evasion of the law. 1t is made one
of the duties of the Internal Revenue
Collector to account for every pound OF
tobacco grown within his district, and
to see that 1t is properly registered and
stamped. If these dealers, who evi-
identity think the payment of one license
gives them the right to sell leaf tobacco
without paying the remaining tax.
wish to continue selling tobacco they
are compelled to comply with all the
conditions and regulations surrounding
| the manufacturer of tobacco. They
must not only pay the special tax as
manufacturers but must file bond.
lregister, and make returns of every
pound of tobacco sold. The tobacco
must be put up in the regulation size
package designated by the Depart
ment, with the manufacturers name,
the weight of the package, and the
stamp showing that the tax has been
paid upon 1t. They must also keep a
record of all sales of such tobacco, and
| make monthly returns to the collector
| showing the amount of tobacco on hand
| and also the number and value OF
| stamps on hand.
There is.no provision of the law pro
hibit;ng any one from buying tooacct
| from the grower, but when this frs
buyer attempts to sell 1t again he mus
have the permission of Uncle Sam