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(e) RETAIL DEALERS IN MALT LIQUORS.

(1) IN GENERAL.-Retail dealers in malt liquors shall pay a special tax of $22.

(2) WHOLESALERS SELLING at RETAIL. A qualified wholesale dealer in malt liquors may not sell such liquors in quantities of less than five gallons without incurring liability to special tax as a retail dealer in malt liquors.

(3) PERSONS SELLING TO ENTERTAINMENTS AND OUTINGS.Notwithstanding the provisions of this part, each person making sales of fermented malt liquor or wine to the members, guests, or patrons of bona-fide fairs, reunions, picnics, carnivals, or other similar outings, and each fraternal, civic, church, labor, charitable, benevolent, or ex-service men's organization making sales of fermented malt liquor or wine on the occasion of any kind of entertainment, dance, picnic, bazaar, or festival held by it, if such person or organization is not otherwise engaged in business as a wholesale or retail liquor dealer or as a wholesale or retail malt liquor dealer, shall pay, before any such sales are made and in lieu of the special taxes imposed by paragraph (1) of this subsection and of subsection (b), a special tax of $2.20 as a retail dealer in malt liquors, if fermented malt liquor only is sold, or a special tax of $2.20 as a retail dealer in liquors if wine only, or wine and fermented malt liquor only, are sold for each calendar month in which any such sales are made.

(4) BREWERS SELLING AT RETAIL.-No collection of special tax as a retail dealer in malt liquors shall be made from brewers for selling malt liquors of their own manufacture in the original stamped eighth-barrel packages.

(5) OTHER PROVISIONS.

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For other provisions relating to brewers as dealers, see paragraph (3) of subsection (d).

(6) TRANSFER OF DUTIES.

For transfer of the powers and duties of the Commissioner and his agents, see section 3170.

(f) RECTIFIERS.

(1) RATE OF TAX.-Rectifiers of distilled spirits shall pay a special tax of $220: Provided, That any rectifier of less than 500 barrels a year, counting 40 gallons of proof spirits to the barrel, shall pay $110.

[For inapplicability of section 3250 (f) (1) to redistillation of certain spirits, see section 2883 (d).

For definition of rectifier, see section 3254 (g).]

(2) PROHIBITEd premises. No officer shall collect any special tax for rectifying distilled spirits on any premises distant less than 600 feet (or less than the distance permitted by the Secretary 1 in the particular case) in a direct line from any distillery. And every officer who collects any special tax in violation of this section shall be liable to a penalty of $5,000 for each offense. (g) WINEMAKERS.-Nothing in this chapter or chapter 26 shall be construed to impose a special tax upon winemakers who have qualified 'The words "of the Treasury" are omitted.

as such under the internal revenue laws and regulations, and who sell wines of their own production where the same are made or at the general business office of such winemaker: Provided, That no winemaker shall have more than one place of business for the sale of such wine that shall be exempt from the special tax.

(h) APOTHECARIES.-No special tax shall be imposed upon apothecaries as to wines or spirituous liquors which they use exclusively in the preparation or making up of medicines unfit for use for beverage

purposes.

(i) MANUFACTURERS OF CHEMICALS AND FLAVORING EXTRACTS.— No special tax shall be imposed upon manufacturing chemists or flavoring-extract manufacturers for recovering tax-paid alcohol or spirituous liquors from dregs or marc of percolation, or extraction, if such recovered alcohol or spirituous liquors be again used in the manufacture of medicines or flavoring extracts of the kind in the production of which originally used.

(j) MANUFACTURERS OF STILLS.

(1) IN GENERAL.-Manufacturers of stills shall each pay a special tax of $55, and $22 for each still or worm for distilling made by him.

(2) DISTILLERS MANUFACTURING OWN STILLS.-Paragraph (1) of this subsection and section 3254 (h) shall not apply to distillers in registered distilleries who manufacture for their own use wooden stills, but each of said distillers shall give notice to the collector of the district in which his distillery is located of each still manufactured before the same is used.

(3) DRAWBACK.-Upon all stills manufactured for export, and actually exported, there shall be allowed a drawback, where the tax thereon has been paid, under such rules and regulations as the Commissioner, with the approval of the Secretary, shall prescribe.

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For transfer of the powers and duties of the Commissioner and his agents, see section 3170.

(1) MANUFACTURERS OR PRODUCERS OF DESIGNATED NONBEVERAGE PRODUCTS.

(1) IN GENERAL.-Any person using distilled spirits produced in a domestic registered distillery or industrial alcohol plant and fully tax-paid in the manufacture or production of medicines, medicinal preparations, food products, flavors, or flavoring extracts which are unfit for beverage purposes, upon payment of a special tax per annum, shall be eligible for drawback at the time when such distilled spirits are used in the manufacture of such products and as hereinafter provided for.

(2) Such special tax per annum shall be graduated in amount as follows: (a) for total annual withdrawals not exceeding 25 proof gallons, $25 per annum; (b) for total annual withdrawals not exceeding 50 proof gallons, $50 per annum; (c) for total annual withdrawals of 50 proof gallons or more, $100 per annum.

(3) REQUIREMENTS. Such person shall register annually with the Commissioner; keep such books and records as may be

necessary to establish the fact that distilled spirits purchased by him and fully tax-paid were used in the manufacture or production of medicines, medicinal preparations, food products, flavors, or flavoring extracts which were unfit for use for beverage purposes; and shall be subject to such rules and regulations in relation thereto as the Commissioner, with the approval of the Secretary, shall prescribe to secure the Treasury against frauds. (4) INVESTIGATIVE POWERS OF COMMISSIONER.-The Commissioner, for the purpose of ascertaining the correctness of any claim filed under this subsection, is authorized, by any officer or employee of the Bureau of Internal Revenue, including the field service, designated by him for that purpose, to examine any books, papers, records, or memoranda bearing upon the matters required to be alleged in the claim, and may require the attendance of the person filing the claim or of any officer or employee of such person, or the attendance of any other person having knowledge in the premises, and may take his testimony with reference to any matter covered by the claim, with power to administer oaths to such person or persons.

(5) DRAWBACK.-A drawback at the rate of $3.75 on each proof gallon shall be allowed on distilled spirits tax-paid and used as provided in this subsection and be due and payable quarterly upon filing of a proper claim with the Commissioner. No claim under this subsection shall be allowed unless filed with the Commissioner within the three months next succeeding the quarter for which the drawback is claimed.

[Under section 309 (b) and (c) of the Revenue Act of 1943 (58 Stat. 68), as amended March 11, 1947 (61 Stat. 12, § 6; Pub. Law 17), the rate of drawback is fixed at $6 instead of $3.75, "with respect to distilled spirits on which the internal revenue tax was paid at the war tax rate, or at a rate equivalent to the war tax rate, specified in section 1650."]

SEC. 3251. CASUAL SALES.

(a) BY CREDITORS, FIDUCIARIES, AND OFFICERS OF COURT.-No special tax shall be held to accrue on a sale of distilled spirits, wines, or malt liquors made by a person who is not otherwise a dealer in liquors, where such spirits, wines, or liquors have been received by the person so selling as security for or in payment of a debt, or as executor, administrator, or other fiduciary, or have been levied on by any officer, under order or process of any court or magistrate, and where such spirits are sold by such person in one parcel only, or at public auction in parcels not less than 20 wine gallons.

(b) BY RETIRING OR DECEASED PARTNERS TO INCOMING OR REMAINING PARTNERS.-No special tax shall be held to accrue on a sale of distilled spirits, wines, or malt liquors made by a retiring partner, or the representatives of a deceased partner, to the incoming, remaining, or surviving partner or partners of a firm.

(c) BY RETAIL DEALERS IN LIQUIDATION.-The special tax of a wholesale dealer in liquors or wholesale dealer in malt liquors shall not be held to apply to a retail dealer in liquors or a retail dealer in malt liquors, because of such retail dealer selling out his entire stock The words "of the United States" are omitted.

of liquors in one parcel, or in parcels embracing not less than his entire stock of distilled spirits, of wines, or of malt liquors. Section 2860 shall not be held to prohibit a rectifier or liquor dealer from purchasing, in quantities greater than 20 wine gallons, the distilled spirits sold in one parcel as aforesaid.

SEC. 3252. RETAIL LIQUOR DEALERS' RECORDS.

(a) REQUIREMENT.-Each retail liquor dealer shall provide at his own expense, and keep in his place of business, a record in book form, or shall keep all invoices of, and bills for all distilled spirits, wines, and fermented malt liquors received, the quantity thereof, and from whom and the date when received.

(b) INSPECTION. Such records, invoices, and bills shall be open to inspection during the usual business hours of the retailer by Government officers upon identification and request.

(c) PRESERVATION. Such records, invoices, and bills shall be kept for a period of two years after the time of the transactions to which they relate.

(d) PENALTY.-For each willful violation of the provisions hereof the retailer shall be subject to a fine of $25.

SEC. 3253. PENALTIES AND FORFEITURES FOR NONPAYMENT OF SPECIAL TAX.

Any person who shall carry on the business of a brewer, rectifier, wholesale liquor dealer, retail liquor dealer, wholesale dealer in malt liquors, retail dealer in malt liquors, or manufacturer of stills, and willfully fails to pay the special tax as required by law, shall, for every such offense, be fined not less than $100 nor more than $5,000 and be imprisoned for not less than 30 days nor more than two years. And all distilled spirits or wines, and all stills or other apparatus, fit or intended to be used for the distillation or rectification of spirits, or for the compounding of liquors, owned by such person, wherever found, and all distilled spirits or wines and personal property found in the distillery or rectifying establishment, or in any building, room, yard, or enclosure connected therewith and used with or constituting a part of the premises, shall be forfeited to the United States. SEC. 3254. DEFINITIONS.

(a) DISTILLER.—

For definition of distiller, see section 2809 (a).

(b) WHOLESALE DEALER IN LIQUORS.-Except as otherwise provided, every person who sells, or offers for sale, foreign or domestic distilled spirits, wines, or malt liquors in quantities of five wine gallons or more to the same person at the same time shall be regarded as a wholesale dealer in liquors: Provided, That the Commissioner may, by regulations, with the approval of the Secretary, provide for the issuance of a stamp denoting payment of such special tax as a "wholesale dealer in wines" or a "wholesale dealer in wines and malt liquors" if, as the case may be, wines only, or wines and malt liquors only, are sold by a wholesale dealer in liquors.

(c) RETAIL DEALER IN LIQUORS.-Except as otherwise provided, (1) Every person who sells, or offers for sale, foreign or domestic distilled spirits, wines, or malt liquors in less quantities than five

wine gallons to the same person at the same time shall be regarded as a retail dealer in liquors: Provided, That the Commissioner may, by regulations, with the approval of the Secretary, provide for the issuance of a stamp denoting payment of such special tax as a "retail dealer in wines" or a "retail dealer in wines and malt liquors" if, as the case may be, wines only, or wines and malt liquors only, are sold by a retail dealer in liquors.

(2) No retail dealer in liquors shall be held to be a wholesale dealer in liquors solely by reason of sales of five wine gallons or more to the same person at the same time if such sales are for immediate consumption on the premises where sold.

(d) BREWER.-Every person who manufactures fermented liquors of any name or description, for sale, from malt, wholly or in part, or from any substitute therefor, shall be deemed a brewer.

(e) WHOLESALE DEALER IN MALT LIQUORS.-Except as otherwise provided, every person who sells, or offers for sale, malt liquors in quantities of five gallons or more, to the same person at the same time, and who does not deal in distilled spirits or wines at wholesale, shall be regarded as a wholesale dealer in malt liquors.

(f) RETAIL DEALER IN MALT LIQUORS.-Except as otherwise provided, every person who sells, or offers for sale, malt liquors in less quantities than five gallons to the same person at the same time, and does not deal in distilled spirits or wines, shall be regarded as a retail dealer in malt liquors.

(g) RECTIFIER.-Every person who rectifies, purifies, or refines distilled spirits or wines by any process other than by original and continuous distillation from mash, wort, or wash, through continuous closed vessels and pipes, until the manufacture thereof is complete, and every wholesale or retail liquor dealer who has in his possession any still or leach tub, or who keeps any other apparatus for the purpose of refining in any manner distilled spirits, and every person who, without rectifying, purifying, or refining distilled spirits, shall, by mixing such spirits, wine, or other liquor with any material, manufacture any spurious, imitation, or compound liquors for sale, under the name of whisky, brandy, gin, rum, wine, spirits, cordials, or wine bitters, or any other name, shall be regarded as a rectifier, and as being engaged in the business of rectifying: Provided, That nothing in this subsection or section 3250 (f) (1) shall be held to prohibit the purifying or refining of spirits in the course of original and continuous distillation through any material which will not remain incorporated with such spirits when the manufacture thereof is complete.

[For exclusion of certain processes from rectification, within the meaning of subsection (g), see sections 2801 (c) (2) and (e) (3) and (4) and 3043 (a).]

(h) MANUFACTURER OF STILLS.-Any person who manufactures any still or worm to be used in distilling shall be deemed a manufacturer of stills.

[For inapplicability of subsection (h) to distillers manufacturing wooden stills for their own use, see section 3250 (j) (2).]

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