Warren sheaf., 1919-05-14
Office Of the Collecto
Of Internal Revenue

'NS-1AlllCc Ol Tie NJOuecCOr
Of Internal Revenue
st. Paul, Mimi.
The Commissioners Of Internal Reyen-
ne made today the following statement
IN the nature. Of q tentative ruling with
reference to the collection Of the tax
upon soft drinks, ice cream and similar
articles sold at soda fountains and SIM.
liar places OF business. The printed
regulations relating thereto will be is
sued within week.
Ice Cream and Soft Drinks
The Law.
Sec. $50. That on and after May 1,
1915, there shall be levied, assessed, col
Iected, and paid a tax Of 1 cent for each
40 cents or fraction thereof of the
amount paid to any person conducting
soda fountain, ice cream parlor, or
other similar place of business, for
drinks commonly known as soft drinks,
compounded or mixed at such place of
4 business, or for ice cream sodas, sun
daes, or other similar articles of food
or drink, when any of the above are
sold on or after such date for con-
sumption in or in proximity to such
place Of business.
Effective date-The tax is upon ice
cream. ice cream sundaes, and soft
drinks, and similar articles of food OF
drink sold at soda fountains and SINH
lar places of business on or after May
LIST, 1919.
Who is a VendOr-For the purpose of
the tax and as used in these regulations
the term vendor means al individual,
partnership, association, or corporation
engaged in the business Of selling any
of the articles enumerated in section
$50 to a purchaser for consumption.
Thus, a vendor may be a manufacturer,
jobber, wholesaler, retailer, trustee in
bankruptcy, receiver, or peddler.
Rate of Tax-The tax is measured by
the price for which the food or drink
is sold. It is on the actual sales price
at the rate of cent for each 10 cents
.-or fraction thereof Of the amount paid
for any Of the articles mentioned in
Section $50. Each sale for 10 cents or
less is taxed / cent and every sale for
over 10 cents is taxed 1 cent for each
10 cents or fraction thereof Of the price.
The tax is upon the whole amount Of
of the price paid by the purchaser.
<sWhen the price is paid at one time
though in payment for several articles
which are the subject of single trans
action of purchase and sale, the total
price paid is the unit for computing the
tax Thus, if the purchaser orders
two sodas at the same time, each sold
for Is cents; the tax is 3 cents and not
4 cents. If however he buys one soda
for Is cents the tax is two cents and if
he then Immediately purchases another
15 cent drink the tax is 2 cents on the
second sale, which cannot be treated
as part of the first sale. Any means by
which separate purchasers pool their
order for the purpose of defeating or
escaping the tax imposed by Section
$50 shall be carefully guarded against
by the vendor, for its employment sub
jects the purchaser and the vendor Gf
he connives in it) to the penalties pro-
vided in Section 1908 of the act.
Place of Business The tax is upon
the price of certain commodities "paid
to any person conducting soda fOun-
tain, ice cream parlor, or other similar
place of business The words "other
similar place of business" refer primar
lily to the character of the business
transacted rather than to any physical
resemblance to the place where, such
business is DONE Whether a person
selling the above described articles is
conducting a place of business similar
to a soda fountain or ice cream parlor
is a question dependent on the facts in
each particular case. Sales of soft
drinks, ice cream, and similar articles
of food or drink otherwise taxable,
when made in the course of his regular
business by a travelling vendor
s(Whether by means of motor vehicle,
pushcart, or otherwise) are subject to
the tax imposed by Section $50. Sales
of soft drinks, ice cream and similar
articles by individuals or organizations,
such as religious, educational, or char
1table societies, on special occasions
only, as church festivals, social parties,
etc, are not taxable; such sales in
stands, booths and similar places, at
agricultural fairs, racing parks, public
exhibitions, circuses, shows and SINH
lar places are taxable. The distinction
lies in the fact of the sale being made
by the person conducting place of
business, even though temporarily, and
merely incidental sales which cannot
properly be considered business =
Sales of soft drinks, ice cream and
similar articles Of food or drink are
not taxable when made in the regular
course of business atsa hotel, restaur-
ant, cafeteria, lunch room, or club
house, unless such articles are sold sep
arate and apart from meals.
Consumption at place Of business
IL