The Birmingham age-herald., 1905-09-17
Internal Revenue Officer Sends
 Out Copy of Ruling
REGARDING MEDICINES
Alcoholic Compounds Are Sold as Med icines When They Contain Very Small Percentage of
 Drugs.

]. O. Thompson, internal revenue col lector, received yesterday from John W. Yerkes. commissioner of internal revenue at Washington. an important decision of the treasury department regarding all coholc compounds labeled as medicines.
 Here is the full text of the decision;
 Among the various alcoholic com pounds now on the market. advertised and sold as medicine under the name or whisky, bitters, tonic, cordials, etc., there are some composed chiefly of distilled spirits. or mixtures thereof, without the addition of drugs or medicinal ingredl- ents in sufficient quantities to change materially the character of the alcoholic liquor
 ''The fact that these compounds during the existence of the statute, imposing tax on proprietary medicines, were without the necessity of investigation into their medicinal character by the terms Of the law made subject to that tax because they were held out to the public as meo- Icines. does not afford ground for re- heving the manufacturers from special tax as rectifers and liquor dealers, or dealers therein from special tax as liquor dealers under the provisions of section s244 revised statutes and amendments.
 Statute Requires Tax.
 .It is held that the statute requires the exaction of this special tax from the manufacturer of every compound com posed of distilled spirits, even though drugs are declared to have been added thereto, when their presence is not dis- coverable by chemical analysis, or It Is found that the quantity of drugs in the preparation is so small as to have no appreciable effect on the alcoholic liquor of which the compound Is mainly or largely composed.
 ''The same ruling applies to every alco- holic compound labeled as remedy Tor disease and containing, in addition to distilled spirits, only substances or in- gradients which, however large their quantity, are not of a character to im- part any medical quality to the com pound; but where such substances un- doubtedly medicinal In their character are combined with whisky or other alco- holic liquor, and are used in sufficient quantity to give a medicinal quality to the liquor other than that which it may inherently possess, such compound, is of course, not to be included in this rul- Ing.
 ''The question in each case, arising un- der the terms of this circular will be determined by this office, not merely upon the examination of the formula sub mitted by the manufacturer of the com hound but upon the result of the analysis made in the chemical laboratory here of samples obtained in the open market and sent in by local internal revenue of- hcers and agents.
 Ruling on Subject.
 t'The ruling as to these compounds in the fourth paragraph of Circular Mo- sos. treasurey decision, 1901, volume 4, page 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 to be regarded as medicines, until the facts ascertained as to the purposes for which they are usually sold, or used, show them to be beverages. and until such facts are obtained. 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 revoked.
 But in order that no injustice may be done these druggists and merchants 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 l, 1905.
 Collectors, however, will, upon the receipt of this circular send out notices 10 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 l, 1905, they will be required to pay special tax for selling the alco- holic compounds coming within the rul- ing now promulgated, even when they sell them in good faith. for medicinal use only, never selling them as bev- erages or selling them knowingly to those buying them for use as beverages"
 
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