The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1905-10-17
Honolulu, Territory of Hawaii,
0et0her Id JQ0S

! October IA, 1905.
Sir: [ send you herewith, for your
consideration, a copy of Treasury De-
| cisions Nos. 922 and 925, regarding
| alcoholic compounds labeled as medi-
cines, in compliance with the instruc-
| lions in said decisions. Please give
these decisions your attention:
| Ont. Rev. Circular No. 673.)
Treasury Department, Office of Com
missioner of Internal Revenue,
| Washington, D. c., Sept. II, 1905.
Ct. D. 1927
| To Collectors of Internal Revenue:
Among the various alcoholic com
| pounds now on the market, advertised
and sold as medicine under the name
| of whisky, bitters, tonic, cordials,
| etc., there are some that are COM
posed chiefly of distilled spirits, or
mixtures thereof, without the addition
of drugs or medicinal ingredients in
sufficient quantities to change materi-
ally the character of the alcoholic
liquor.
The fact that these compounds dur
ing the existence of the statute i'm
posing tax on proprietary medicines
| We're without the necessity of inyesti-
cation into their medicinal character
| to that tax, because they were held
out to the public as medicines does not
afford ground for relieving the manu-
facturers from special tax as rectifers
and liquor dealers, or dealers therein
from special tax as liquor dealers I'M
der the provisions of section 3244, Re-
| vised Statutes and amendments.
It is held that the statute requires
the exaction of this special tax from
| the manufacturer of every compound
composed of distilled spirits, even
though drugs are declared to have
/ been added thereto, when their pres
ence is not discoverable by chemical
analysis or it is found that the guam
tity of drugs in the preparation is SO
small as to have no appreciate effect
on the alcoholic liquor of which the
compound is mainly or largely COM
posed.
The same ruling applies to every al
coholic compound labeled as a remedy
for diseases and containing, in addi-
tion to distilled spirits, only sub
stances or ingredients which, however
large their quantity, are not of char
acter to impart any medicinal quality
to the compound; but where substances
undoubtedly medicinal in their char
acter are combined with whisky or
other alcoholic liquor, and are used in
sufficient quantity to give medicinal
quality to the liquor other than that
which it may inherently possess, such
compound is, of course, not to be in
Guided in this ruling.
The question, in each case, arising
under the terms of this circular viii
be determined by this office, not mere
" upon examination of the formula
submitted by the manufacturer of the
compound, but upon result of the an
alysis made in the chemical laboratory
here of samples obtained in the open
market and sent in by the local inter
nal revenue officers and agents.
The ruling as to these compounds in
the fourth paragraph of Circular No.
sos (Treasury Decisions, 1901, Vol. 4,
p. 210), "that if they are composed of
spirits in combination with drugs,
herbs, roots, ETC., and are held out as
remedies for diseases stated in labels
on the bottles, they are regarded as
medicines until the facts ascertained,
as to the purpose for which they are
usually sold or used, show them to be
beverages, and until such facts are OBJ
tanned druggists and merchants who
sell these compounds in good faith as
medicines only are not to be called on
to pay special tax as liquor dealers on
account of such sales" is hereby re-
voked.
But in order that no injustice may
be done to these druggists and mer-
chants who, without holding special
tax stamps as liquor dealers, now have
in stock these compounds for sale as
medicines, this circular will not be put
into effect until December 1, 1905.
Collectors win, however, immedI-
ately upon the receipt of this circular
send out notice to all druggists and |
merchants dealing in proprietary
medicines in their districts who do
not hold the requisite special-tax |
stamp as liquor dealers, that on and |
after December 1, 1905, they will be
to pay special tax for selling
the alcoholic compounds coming within
the ruling now promulgated, even
when they sell them in good faith for /
medicinal use only, never selling them !
as beverages, nor selling them know
ingly to those buying them for use as
beverages.
JOHN W. YERKES,
Commissioner.