The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1901-08-20
VIOLATING
-.- THE Law
Tobacco Is Being
Sold Which Pays
No Tax.
WHOLESALE attempt to defraud

a WHOLESALE attempt to defraud
IA the Government of the special tax
IA 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
ternal Revenue Collector Chamberlain
will proceed to act. Deputy Collector
Cousins called attention yesterday to
the repeated violation of the law re-
surfing 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
ticular statute of the internal revenue
laws. but they have now become 50 Sc
nous as to require a stringent enforce
ment OF the law. ..
A short time ago some of the many
smell tobacco dealers about the city
were arrested for selling tobacco with
cut 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 50
as dealers. Other dealers were also
warned of the requirements Of the law.
and In every case this annual tax vas
paid. r..
1t 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
10 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 70 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
1t 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
it 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 also be regarded as
a manufacturer of tobacco whose bust
ness II Is to sell leaf tobacco In Quanti-
ties less than a hogshead, case or bale:
or who sells directly 70 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
6uch persons shall be regarded as manu-
featured tobacco. and such manufactured
tobacco shall be put up and prepared
~ such manufactures in such packages
emily 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
swn growth and raising shall not be re-
sarded 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. II these dealers who evil
IDENTIFY 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.
register, 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 it. 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 tobacco
from the grower, but when this first
buyer attempts to sell 1t again he must
have the permission Of Uncle Sam.
and comply with his regulations. These
dealers think they have the right to
buy the tobacco in the fields and sell it
from their stores because they have
paid the one tax Of Sc a year. This lille
gal practice the internal revenue au-
thOrities now intend to break up, and
any one wishing to sell leaf tobacco,
who Is not a grower Of said tobacco.
must comply with all the conditions of
the law as a registered manufacturer.
BY this means only can the collector
keep track OF the tobacco raised In his
district, and prevent fraud and evasion
of the law. While perhaps the amount
of tax involved Is not very large, it is
important. as otherwise no account of
the tobacco grown can be kept. Unless
the law is enforced 1t would be possible
for the tobacco to be sold to these Chi
nese and Japs, who can further evade
the law by packing cigars in boxes
upon which a stamp has already been
placed and used. but not cancelled.
Now that a public warning has been
given, the internal revenue authorities
intend to prosecute any person or per-
SONS found violating the law