The sun., 1919-03-03
STAMP TAX EVASION
tHITS BOTH PARTIES
Maker and AcceptOr Of Note
Are Liable by Internal
Revenue Ruling.
DECISION ON CLUB DUES
0Future' Sales DO Not Come
Under 1917 Law Unless
Made on an Exchange.
DECISION ON CLUB DUES
Special Despntch 40 Tnr sly.

~ ~ stamp 'dN uhuci the fcNchue ic
z October 8. 1917. renders the make
nd the acceptor of such notes separated
liable to the penalties under the az
hder a decision by the internal Revenu
bureau.
The bureau has decided also tina
axes on future delivery sales do nc
ppiy to any sales except those on
stock exchange or board {
rade. The bureau holds that sales G
reduce or merchandise for future Dc
very must be made at an exchange G
oard Of trade or other similar place 1
rider for the tax to apply" A sale
member of an exchange made by ma
n wire not at an exchange is not sui
ect to the tax.
other interpretations OF the due
axes, stamp taxes and excise taxes az
% follows:
Dues Taxi. Chamber of COM
merce as a social club. (a) Dues
paid for membership privileges in n
marily commercial organization are
taxable II the privileges include
clubhouse facilities such as are af-
forded by an ordinary city social
club.
tb) A commercial club conducted
primarily for commercial objects
held not within the rule for the spe-
cial reason that the chief social
feature. that OF the restaurant, be-
sides being maintained as an ad-
tunct TO the luncheon meetings. Is
regularly open to members. local
business and civic organizations and
used by them for purposes which the
club is engaged in furthering.
Buying stock to Join.
.. Payment for share Of stock as
prerequisite to membership: pay
> ment for family privileges. (a) The
rule Of Treasury decision 2646 that
share Of stock requiring as a con-
dttion OF becoming a member Of a
club Is regarded as IAN initiation"
fee held to apply to a club organized
rs business corporation and hav-
ing stockholders who are not MEM
bers.
(b) The dues taxable include a
sum paid by a member In addition
TO his regular dues to obtain privi-
leges on the club grounds for MEM
. bers Of his family.
Excise Tax. Automobiles and
trucks. further manufacture" of
ta) II a dealer adds a demount-
able top to tax paid automobile
or drivers cab 10 a tax paid truck
the sale OF the improved vehicle is
not subject to excise tax.
OBJ A dealer who contracts to
sell to customer a truck composed
Of tax paid chassis and a body TO
be added by a body builder and
who performs his contract is liable
TO tax as the manufacturer OF tho
completed truck. though the order to
the body builder purports to be that
of the customer through the dealer
as his agent.
(c) A single sale by a dealer of
a tractor and trailer bought by him
together tax paid and an extra
trailer is not taxable unless the
combination of ali three vehicles
otherwise than merely by coup
ling) forms a functioning vehicle.
Decision on "Mnnufacturer."
2--Application of provisions OF
Articles 2. and 81 of regula tons
No. "A as to who is manufacturer"
where baseball bats or other SPORT
ing goods taxable under sub divi-
sion 90 OF Section 500. or sirups or
extracts taxable under subdivision
ta) of Section 313. are prepared
In final marketable form by A,
who marks or labels them only with
the name or trade mark of b, who
on their being delivered to him
sells them without further manu-
facture to his own customers-if
the transaction between A and b
Is an actual sale of the articles and
not merely the employment of A by
p to manufacture them as his agent
at specified profit. A IL the man
ufacturer" who Is liable FOR the tax
Article 2 OF regulation No. ~ cannot
be construed as adopting for such
cases any of the provisions OF Arti-
Gle 81 an article relating to medici-
nal preparations held as remedies or
sold under a trademark.
3-Bowling ALLEY tenpins are
vi
ing of section 500 %. title 6, and
are therefore subject to taxation
hereunder.
"A motorboat operated solely In
taking out fishing parties for hire
Is subject to the excise tax on boats,
although 1t Is licensed In the coast
ing trade and transportation tax Is
collected from the passengers.
Rulings on stamp Taxes.
S1m~e taxes; drsf~ .
ines between United States and
certain Tosye53!ca7--The general,
rule that time drafts are subject to
the stamp tax when delivered within
the territorial jurisdiction Of the
United States and not otherwise Is
applicable to time drafts used be-
tween the territorial jurisdiction of
the United States (includlng the
States, District of Columbia, the
Territory OF Hawaii and the Terri
tory Of Alaska) and the Canal Zone,
Philippine Islands, the Virgin ISL
ands or Porto Rico, whether cover
ing shipments 9r not
Business property Investment bond
A so-called business property in
vestment bond wherein It Is certified
that the holder thereof Ia the owner
OF an interest In certain specified
real property, legal title to which
was previously conveyed to a trus-
tee and whereby the corporation is
suing the same agrees to manage
the property and distribute the pro-
ceeds in certain manner is not
subject to taA as a certificate OF
stock.
Indemnity and Surety Bonds
The stamp tax imposed on indem-
nifty and surety bonds by paragrap
2 OF schedule A. title 8 of the act
applies TO indemnity bonds made to
the Government to secure the Is,
suance OF duplicate checks for allot,
saent and allowances or other bene-
fits under the act OF October g.
~
Taxes on Transporta tion.