SUBTITLE E.-ALCOHOL, TOBACCO, AND CERTAIN OTHER EXCISE TAXES CHAPTER 52.-TOBACCO, CIGARS, CIGARETTES, AND CIGARETTE PAPERS AND TUBES SUBCHAPTER A.-DEFINITIONS; RATE AND PAYMENT OF TAX; EXEMPTION FROM TAX; AND REFUND AND DRAWBACK OF TAX SECTION 5704.-EXEMPTION FROM TAX 26 CFR 270.150: Cigars and cigarettes furnished to employees for personal consumption. (Also 275.139.) Rev. Rul. 61-44 Tobacco products provided by manufacturers without payment of tax for employees' off-factory personal consumption may not be accumulated and distributed to the employees on a weekly basis. Such tobacco products must be given to the employees on the day for which furnished and removed from the factory by the employee on that day. Advice has been requested whether tobacco products provided by manufacturers without payment of tax for employees' off-factory personal consumption may be accumulated and distributed weekly. Section 5704 (a) of the Internal Revenue Code of 1954 provides in part that tobacco products may be furnished by a manufacturer of such products, without payment of tax, for use or consumption by employees or, in such quantities, and in such manner as the Secretary of Treasury or his delegate shall by regulations prescribe. Section 270.150 of the Cigars and Cigarettes-Manufacturers, Importers, and Dealers Regulations provides, in part, that manufacturers of cigars and cigarettes may furnish to each employee, for off-factory personal consumption, not more than five large cigars or cigarettes, or 20 small cigars or cigarettes, without payment of tax, for each day the employee is at work. Such cigars or cigarettes furnished for off-factory consumption shall be taken from the factory by the employee on the day furnished. Section 275.139 of the Manufactured Tobacco-Manufacturers, Importers, and Dealers Regulations provides, in part, that manufacturers of tobacco may furnish to each employee, for off-factory personal consumption or use, not more than two ounces of manufactured tobacco, without payment of tax, for each day the employee is at work. Such tobacco furnished for off-factory consumption or use shall be taken from the factory by the employee on the day furnished. It is held that tobacco products provided by manufacturers without payment of tax for employees' off-factory personal consumption may not be accumulated and distributed to the employees on a weekly basis. Such tobacco products must be given to the employees on the day for which furnished and removed from the factory by the employees on that day. 26 CFR 275.139: Manufactured tobacco furnished to employees for personal consumption or use. Accumulation of tax-exempt tobacco products for employee use. See Rev. Rul. 61-44, page 652. 26 CFR 290.30a: Foreign-trade zone. T. D. 65641 TITLE 26-INTERNAL REVENUE.-CHAPTER I, SUBCHAPTER E, PART 290.EXPORTATION OF TOBACCO PRODUCTS, AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX Deliveries to foreign-trade zones DEPARTMENT OF THE TREASURY, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington 25, D.C. To Officers and Employees of the Internal Revenue Service and Others Concerned: On March 22, 1961, a notice of proposed rule making with respect to regulations designated as Part 290 of Title 26 of the Code of Federal Regulations was published in the Federal Register (26 F.R. 2411). The purposes of the proposal were to revise and incorporate in 26 CFR Part 290 the regulations contained in 26 CFR Part 253 relating to the removal of tobacco products and cigarette papers and tubes to foreign-trade zones. Accordingly, the regulations remaining in 26 CFR (1954) Part 253 are superseded by the regulations in 26 CFR Part 290. In accordance with the notice, interested persons were afforded an opportunity to submit written comments or suggestions pertaining thereto. No comments or suggestions were received during the period of 30 days prescribed in the notice and the regulations so published are hereby adopted. 1. A new section, designated § 290.30a, is added immediately following § 290.30. § 290.30a FOREIGN-TRADE ZONE.-"Foreign-trade zone" shall mean a foreigntrade zone established and operated pursuant to the Act of June 18, 1934, as amended. (48 Stat. 998-1003, as amended; 19 U.S.C. 81a-81u.) 2. A new section, designated § 290.54, is added immediately following § 290.53. § 290.54 ZONE Operator.-"Zone operator" shall mean the person to which the privilege of establishing, operating, and maintaining a foreign-trade zone has been granted by the Foreign-Trade Zones Board created by the Act of June 18, 1934, as amended. (48 Stat. 998-1003, as amended; 19 U.S.C. 81a-81u.) 3. A new section, designated § 290.61a, is added immediately following § 290.61. § 290.61a DELIVERIES TO FOREIGN-TRADE ZONES-EXPORT STATUS.-Tobacco products and cigarette papers and tubes may be removed from a factory or an export warehouse and cigars may be withdrawn from a customs warehouse, without payment of tax, for delivery to a foreign-trade zone for exportation or storage pending exportation in accordance with the provisions of this part. Such articles delivered to a foreign-trade zone under this part shall be con 126 F.R. 4361. sidered to be exported for the purpose of the statutes and bonds under which removed and for the purposes of the internal revenue laws generally and the regulations thereunder. However, export status is not acquired until an application on zone Form D for admission of the articles into the zone with zone restricted status has been approved by the collector of customs pursuant to the appropriate provisions of 19 CFR Chapter I, and the required certificate of receipt of the articles in the zone has been made on Forms 2149 or 2150 as prescribed in this part. (48 Stat. 999, as amended, 72 Stat. 1418; 19 U.S.C. 81c, 26 U.S.C. 5704.) 4. A new section, designated § 290.196a, is added immediately following § 290.196. § 290.196a To A FOREIGN-TRADE ZONE.-Where tobacco products and cigarette papers and tubes are removed from a factory or an export warehouse for delivery to a foreign-trade zone, under zone restricted status for the purpose of exportation or storage, the manufacturer or export warehouse proprietor shall consign the shipment to the Zone Operator in care of the customs officer in charge of the zone. (48 Stat. 999, as amended, 72 Stat. 1418; 19 U.S.C. 81c, 26 U.S.C. 5704.) 5. A new section, designated § 290.207a, is added immediately following § 290.207. § 290.207a To A FOREIGN-TRADE ZONE.-Where tobacco products and cigarette papers and tubes are removed from a factory or an export warehouse for delivery to a foreign-trade zone, under zone restricted status for the purpose of exportation or storage, the manufacturer or export warehouse proprietor making the shipment shall forward two copies of the notice of removal, Form 2149 or 2150, to the customs officer in charge of the zone. Upon receipt of the shipment, the customs officer shall execute the certificate of receipt on each copy of the form, noting thereon any discrepancy, retain one copy for his records, and forward the other copy to the manufacturer or export warehouse proprietor making the shipment for filing with his assistant regional commissioner. (48 Stat. 999, as amended, 72 Stat. 1418; 19 U.S.C. 81c, 26 U.S.C. 5704.) § 290.211 [Deletion] 6. Section 290.211 is deleted. 7. A new section, designated § 290.264a, is added immediately following § 290.264. § 290.264a To A FOREIGN-TRADE ZONE.-Where cigars are withdrawn from customs warehouse for delivery to a foreign-trade zone, under zone restricte status for the purpose of exportation or storage, the customs warehouse proprieto making the shipment shall forward two copies of the notice of removal, Fori 2149, to the customs officer in charge of the zone. Upon receipt of the shipmen the customs officer shall execute the certificate of receipt on each copy of th form, noting thereon any discrepancy, retain one copy for his records, and fo ward the other copy to the customs warehouse proprietor making the shipmen for filing with the appropriate assistant regional commissioner. This Treasury Decision shall be effective on the first day of the fir month which begins not less than 30 days following the date of publ cation in the Federal Register. (This Treasury Decision is issued under the authority contained i section 7805 of the Internal Revenue Code of 1954 (68A Stat. 917; U.S.C. 7805).) Approved May 16, 1961. STANLEY S. SURREY, MORTIMER M. CAPLIN, Commissioner of Internal Revenue. Asst. Secretary of the Treasury. (Filed by the Division of the Federal Register on May 18, 1961, 8:54 a.m., & published in the issue of the Federal Register for May 19, 1961, 26 F.R. 4361 CHAPTER 53.-MACHINE GUNS AND CERTAIN OTHER FIREARMS SUBCHAPTER A.-TAXES PART I.-SPECIAL (OCCUPATIONAL) TAXES SECTION 5801.-TAX 26 CFR 179.1: Persons subject to taxes. T.D. 65571 TITLE 26—INTERNAL REVENUE.—CHAPTER I, SUBCHAPTER E, PART 179.- Amendments to implement the provisions of Public Law 86-478 OFFICE OF THE COMMISSIONER OF INTERNAL REVENUE, To Officers and Employees of the Internal Revenue Service and On December 29, 1960, a notice of proposed rulemaking with respect to the amendment of 26 CFR Part 179 was published in the Federal Register (25 F.R. 13920). That notice afforded interested persons an opportunity to submit written comments or suggestions pertaining thereto. No comments or suggestions were received within the 30-day period prescribed in the notice and the amendments as published in the Federal Register are hereby adopted. In order to implement the provisions of the Internal Revenue Code of 1954, as amended by Public Law 86-478 (74 Stat. 149) [C.B. 1960-1,801], and to make certain conforming and clarifying changes, regulations in 26 CFR Part 179 are amended as follows: 1. The statement of authority under which this Part is issued is amended to read as follows: AUTHORITY: § 179.1 through 179.195 are issued under 68A Stat. 917, 26 U.S.C. 7805, and implement Chapter 53 of the Internal Revenue Code of 1954 (68A Stat. 721). Related statutes which are interpreted or applied are cited in the text of the section interpreting or applying such a statute or in parentheses at the conclusion of the section. § 179.1 [Amendment] 2. Section 179.1 is amended by inserting "(occupational)" between the words "special" and "taxes" in paragraph (a). § 179.14 [Deletion] 3. Section 179.14 is deleted. 4. Section 179.20 is amended to read as follows: $179.20 FIREARM.—“Firearm” shall mean (1) a shotgun having a barrel or barrels of less than 18 inches in length, or (2) a rifle having a barrel or barrels of less than 16 inches in length, or (3) any weapon made from a rifle or shotgun (whether by alteration, modification, or otherwise) if such weapon as modified has an overall length of less than 26 inches, or (4) any other weapon, except a pistol or revolver, from which a shot is discharged by an explosive if such weapon is capable of being concealed on the person, or (5) a machine gun, and includes (6) a muffler or silencer for any firearm whether or not such firearm is included within the foregoing definition. 126 F.R. 2407. § 179.22 [Amendment] 5. Section 179.22 is amended by adding a second sentence to read as follows: Except that, bringing a firearm from a foreign country or a territory subject to the jurisdiction of the United States into a foreign trade zone for storage pending shipment to a foreign country or subsequent importation into this country, pursuant to the I.R.C. and this Part, shall not be deemed importation. § 179.29 [Amendment] 6. Section 179.29 is amended by striking the words "or creation" and "other weapon" and inserting in lieu of the latter two words, the word "firearm". 7. A new section 179.29a to read as follows is inserted immediately after § 179.29: § 179.29a MANUAL RELOADING.-Manual reloading shall mean the inserting of a cartridge or shell into the chamber of a firearm either with the hands or by means of a mechanical device controlled and energized by the hands. § 179.32 and 179.33 [Deletions] 8. Sections 179.32 and 179.33 are deleted. 9. Section 179.35 is amended to read as follows: $179.35 PISTOL.-"Pistol" shall mean a weapon originally designed, made, and intended to fire a small projectile (bullet) from one or more barrels when held in one hand, and having (1) a chamber(s) as an integral part(s) of, or permanently aligned with, the bore (s); and (2) a short stock designed to be gripped by one hand and at an angle to and extending below the line of the bore (s). The term shall not include any gadget device, any gun altered or converted to resemble a pistol, any gun that fires more than one shot, without manual reloading, by a single function of the trigger, or any small portable gun such as: Nazi belt buckle pistol, glove pistol, or a one-hand stock gun designed to fire fixed shotgun ammunition. § 179.43 [Amendment] 10. Section 179.43 is amended by striking, ", the Territories of Alaska and Hawaii,". 11. A new section 179.45 to read as follows is inserted immediately after § 179.44: $179.45 UN SERVICEABLE FIREARM.-"Unserviceable firearm" shall mean a firearm which is incapable of discharging a shot by means of an explosive and incapable of being readily restored to a firing condition. 12. Section 179.50 is amended to read as follows: § 179.50 LIABILITY FOR TAX.-Every person who engages in the business of importing, manufacturing or dealing in (including pawnbrokers) firearms in the the United States is required to pay a special (occupational) tax for each place where such business is conducted. 13. Section 179.51 is amended to read as follows: § 179.51 SPECIAL (OCCUPATIONAL) TAX RATES.-(a) The special (occupational) taxes are as follows: Class 1: Importers of firearms_. Class 2: Per Year or fraction thereof Manufacturers of firearms, except manufacturers in Class 2--- Class 3: Pawnbrokers $500 500 25 300 |