The Bridgeport evening farmer., 1917-11-17
of Finance
INTERPRETATIONS AND DECISIONS
OF SEVERAL DISPUTED FEATURES
OF new INTERNAL REVENUE LAWS

Several very important interpreta-
tons and decisions upon disputed fea-
lures of the new internal revenue law
which affect Bridgeport people and
industries have been received by Dep
uty Collector Davis of the revenue Of
fee in this city. These interpreta-
lions relate to the taxes upon bever-
ares income taxes, admissions and
dues, and other excise taxes, and have
been the subject of frequent inquiry
at the local Office Publication has
been requested by Collector Walsh of
the Internal Revenue Office for Con-
necticut.
Soft drinks. Cd Section 313, para
graph (a) does not impose a tax
upon sirups or extracts intended for
use by the maker for further manu-
featuring purposes.
(2) Is the use of havoring ex-
tracts containing some alcohol in
airups which are to be used in the
manufacture of soda water, etc., pro-
hfbited?
There is no provision against using
favoring extracts which contain
some alcohol to flavor sirups that
are to be used in the manufacture of
soft drinks.
CD Are carbonated beverages
which are mixed and sold at the
fountains subject to the tax imposed
under subdivision (b) Section BIB,
Of the act of October 8, 1917.
(a) There is no exemption in favor
of products mixed and sold at foun-
tains; Cb) the manufacturer of soft
drinks who purchases his carbonic
acid gas must pay cents per pound
upon the amount of gas he buys.
(section s15). (c) The manufactures
of soft drinks who makes his own
gas must pay cent per gallon upon
all soft drinks sold. Section s13 (b);
(d)5 the manufacturer Of sirups or
extracts must pay from cents to
sirups or. extracts which are in
tended for use in the manufacture of
soft drinks (Section 313 AZ.
80 Carbonic acid gas used in draw
ing beer from a container is not tax
able under Section 315.
CD Extracts to be used for house
hold purposes are not taxable.
Ca Where concentrates or extracts
are sold to be further manufactured
into hayoring extracts or sirups, the
person completing the manufacture
Is subject to the tax. Where concen-
trates or extracts are sold to the bot
tier or the manufacturer OF the soft
drinks, the manufacturer of the con-
centrates or extracts is subject to the
tax
Cd Interest on bonds received by
1egatee. A 1egatee is required to re-
turn as income the full amount of In
terest received by him on bond, not
wfthstanding the fact that q part of
the first coupon, payable after he re-
oeived IT. had been added to the bond
and included in the gross estate Of the
dscedent, thereby becoming subject
TO the state-tax law.
ca Payments received under the
accident compensation laws to be re-
turned as acknowledgements made
to an injured employe by a corpora
ton under the accident compensa-
.tion laws of the several states consd-
fute taxable income OF the employee.
CD Undistributed net incone.-Sec-
ton 1206.-(a) The earnings Of a cor
poratfon used to purchase preferred
stock for cancellation are retained for
employment in the reasonable re-
Inducements of the business, and are
therefore not taxable: Cb) Liberty
Loan bonds of the second series bear
ing interest at the rate of per cent.
per annum, issued in exchange for the
s IL per cent. Liberty bonds are "ob-
LEGATIONS of the United States issued
after September L, 1917" and are not
subject to tax; Co current earnings
Invested in IL per cent. liberty
Bonds will not be subject to the tax
upon undistributed net income OF cor
porations II thus employed in the
business or retained for the employ
mont in the reasonable requirements
OF the business.
Sections TOO and 701. CD Any or
ganization which maintains headquar-
tiers for the purpose of affording its
members the opportunity of informal
Iy congregating for social intercourse
fs called a social club within the
meaning of the law.
ca Collection of tax on admis.
sions-(a) The tax on admissions i.
70 be collected from the original ven
dor of the tickets on amount charged
original vendee; (b) One who rents OIL