Evening journal., 1913-12-12
Peoples Column
GOVERNMENT TAX AND
CLUB LIQUOR LICENSES


Sir: Having been deeply interested
in all the newspaper accounts of the
action OF the managers OF clubs and !
some houses in declaring their inten- |
ton TO ignore the municipal authorl- !
ties of Wilmington and sell liquor
under Government Licenses" III
wrote to the Commissioner OF Inter-
nal Revenues at Washington for an
explanation of the purpose Of the
Special Tax Receipt. I mentioned
the situation in Wilmington, as a case
in point
G. f. Fletcher, Deputy Commission
er, promptly sent me two Treasury
Decisions. Nos. 1884 and 1926" which
cover the whole subject in a most
comprehensive manner. No. 1854 is
as follows:
Special Tax Stamps.
Special tax stamps are merely re-
ceipts for the tax and carry no priv
ileges except immunity from prosecu-
ton for non-payment thereof.
Treasury Department, Office OF
Commissioner of Internal Revenue,
Washington, ID. c., April 21, 1909.
In view of the numerous protests
against the issuance OF Federal Liz
censes for the sale OF liquors in pro-
hibition territory received by this
Office the appended letter Of the hon
orable. the Secretary OF the Treasury
is published for the information OF all
concerned.
! Treasury Department, March 27. 1909
Sir: BY direction OF the President,
have the honor to acknowledge the
receipt of your communication, trans
mitting an exemplifed copy of Joint
Resolution No. g. passed BY the Leg
islature OF 1909 of the State OF South
Dakota In view OF the language or
said resolution your attention is re-
spectfully called TO the fact that no
licenses for the sale Of liquors at any
time or place. are issued under tho
provision of the Internal Revenue
laws.
A special tax Is imposed under
said LAVISH Aupon all persons who en-
gage in the bushes of selling liquors
and this tax must be paid by every
person who does engage in such bust
ness whether in accordance with or
in violation of laws OF the State, but
section 3243 Revised Statutes. ex-
pressly provides that the payment OF
such tax "sholl not be held 60 exempt
any person from any penalty OF pun
ishment provided by the laws of any
State for carrying on the same within
such State or in any manner to au-
thorize the commencement or contin-
uance of such trade or business con-
trary to the laws Of such State or in
places prohibited by Municipal Law"
Furthermore the United States SUI
preme Court. in the License Tax
Cases expressly held that the stamp
issued, evidencine the payment of the
tax Is not a license, but merely a re-
ceipt for the tax and carries with It no
privileges, except immunity from pro-
secution under the Federal laws for
non-payment of the tax.
Respectfully, Franklin MacNeigh. Sec
retary TO Hon. S. G. Policy. Secretary OF
State, Pierre, South Dakota.
Treasury Decision. No. ls2d. is o
much greater length and Is reply =
, some person who wrote TO the commits
o sioner. asking ~wi,y the Federal Govern
D ment issues licenses to sell alcoholic liq
, ors in communities where. such liquor
[ are forbidden by local laws TO be sold
and suggesting that "the Presiden
D should Immediately direct the lntcrna
Revenue officers TO refuse any longer T.
/ issue licenses, or TO receive money j
such territory" To this the commits
sioner replies as follows: 1T is clear tha
: your correspondent is under a misapprc
hension with -espect to Federal taxes an,
the powers conferred on Federal officers
The Bureau of Internal Revende issues
no licenses Of any kind. but is require'
by law to collect certain taxes designated
as special taxes from persons engaged II
certain business occupations or trades
Retail liquor dealers shall pa,
twenty-five dollors upon payment OF tn
tax. receipt in the shape Of staml
shall be furnished the taxpayer. Ih'
= stamp issued is receipt exactly analo
eons TO the receipt issued by the Post
Office Department IN the shape Of post
age stamp TO any ono who deposits
money TO pay for the transportation o
4 mail matter.
Section 3,240. Revised Statutes. pro
Z vidcs that each collector shall keep con
& spicuously in his office for public inspec
tion, list of persons who have pai'
special taxes. with the places and busi
4 ness for which the tax was paid.
Information received in this Office in
dicates that this is one Of the creates
1 aids IN the enforctment OF local laws
q Of course, if no Federal tax was col
lected the Federal Government woul
have no occasion to collect the data. o
to be interested in any way in the loca
4 transactions Of liquor dealers.
"Sgned:
Royal r. Cabell, Commissioner,
Washington, D. c."
Thus we see how those club men am
others OF Ike TX have been engaged j
y throwing dust in our eyes" and we ais
8 see plainly demonstrated that tn
Z only course TO pursue with them IS Z
4 visit the collectors Office and procur
from his list "conspicuously displaye
q for public inspection" a list of name
q and addresses Of all those who have s
B imprudently boasted OF their Govern
& ment license" and "show them" wha
FL