CHAPTER XXXI TAX ON TRANSPORTATION, ETC. TAX ON TRANSPORTATION OF GOODS BY FREIGHT AND All the taxes referred to in this chapter, and imposed by Title V of the War Revenue Act of October 3, 1917, are new with the exception that under the Emergency Revenue Act of October 22, 1914, certain items of the schedule were covered either by assessment or by levy of stamp tax. However, the collection of taxes under the previous act having been terminated, all the taxes covered by Title V of the present act can be regarded as new taxes. The effective date of all these taxes was fixed by the statute as November 1, 1917. 484.-TAX ON FREIGHT SHIPMENT. The tax on the shipment of property by freight is 3 per cent of the amount paid for transportation by rail or water or by any form of mechanical motor power when such motor transportation is in competition with transportation by rail or water. The tax is imposed only upon transportation of freight consigned from one point in the United States to another. 485.-TAX ON EXPRESS SHIPMENT. The tax on the shipment of property by express is first restricted to transportation by persons, or partnerships or corporations engaged in the express business over regular routes between fixed terminals. The above condition being present, the tax is imposed at the rate of one cent for each 20 cents, or fraction thereof, of the amount charged for the transportation. And, again, the shipment must be from one point in the United States to another to be taxable. 486.-TAX ON PASSENGER TRANSPORTATION. This tax, with certain exceptions noted below, is imposed at the rate of 8 per cent of the amount paid for the transportation. The tax may be considered under the following general divisions with respect to means of travel— (a) By rail from one point in the United States to another (b) By water from one point in the United States to another 487.-TAX ON SEATS, BERTHS, STATEROOMS. The tax on seats, berths and staterooms in parlor cars, sleeping cars, or on vessels, is imposed at the rate of 10 per cent of the amount paid for such accomodation. 488.-TAX ON TELEGRAPH AND TELEPHONE. MESSAGES. The tax upon telegraph, telephone and radio messages or conversations is at the flat rate of 5 cents for each message or conversation originating within the United States and for which a charge of 15 cents or more is made. This means that a message or conversation costing less than 15 cents is not subject to tax. The law also provides that the tax shall be collected only once upon any message or conversation in a case where transmission requires the use of the lines or stations of more than one concern. 489.-TAX ON PIPE LINE TRANSPORTATION. The tax upon the transportation of oil by pipe line is at the rate of 5 per cent of the amount paid for such transportation. 490.-EXCEPTIONS TO GENERAL TAX RULES REGARDING PASSENGER TRANSPORTATION. In the case of passenger transportation, an amount paid for a commutation or season ticket for trips less than 30 miles, or for transportation when the fare does not exceed 35 cents, is not subject to tax. If a mileage book, used for transportation or accomodation, was purchased before the tax became effective-that is, was purchased. prior to November 1, 1917—the conductor or other agent of the transportation company must collect the tax when the book is presented on or after November 1, 1917. If the passenger pays cash fare, instead of purchasing a ticket, the conductor or other agent of the transportation company must collect the tax when the fare is paid. If a regular ticket-that is, other than a mileage book—was bought and partially used before November 1, 1917, it is not subject. to tax when the remainder of it is used on or after November 1, 1917. If a regular ticket-that is, other than a mileage book—was bought before November 1, 1917, but was not used at all, it is subject to tax when presented for passage on or after November 1, 1917. 491.—EXCEPTIONS TO GENERAL TAX RULES REGARDING FREIGHT OR EXPRESS SHIPMENTS. In a case where the carrier owns the commodity transported, and for that reason or some other, does not receive payment for the transportation, the tax is to be collected from the carrier at a rate equivalent to the tax that would be imposed were payment received. However, this clause does not mean that a carrier must pay tax upon the transportation of a commodity which is necessary for its use in the carrying business, and is intended to be or has been so used. And neither does it mean that one carrier, which constitutes a part of a railroad system, must pay tax upon the transportation of material for another carrier, which is also a part of the same system. 492.-PAYMENT FOR SERVICE TO GOVERNMENT OR STATE NOT TAXABLE. No tax is required to be paid upon any service rendered by a carrier to the United States, or to any State, Territory, or the District of Columbia. This includes the service rendered in the transportation of both freight and passengers, or express matter. The exemption also covers payment for any transportation of oil by pipe line, and for any telegraph, telephone or radio service rendered the Federal, or a State or Territorial, or the District of Columbia government. 493.-WHO PAYS THE TAX. The tax must be paid by the person, corporation, partnership or association paying for the service rendered. This rule of tax liability is imposed with respect to any service rendered in the transportation of freight, express matter, and passengers, or of oil by pipe line, or in connection with the use of seats, berths and staterooms, or the means of communication afforded by telegraph, telephone and radio facilities. The only exceptions to the rule are those referred to in the first paragraph under the heading "Exceptions to General Tax Rules Regarding Freight or Express Shipments" and that exempting from tax the payment for service rendered the Federal Government, etc. In the case of the first of these exceptions the carrier must bear the tax. 494.-COLLECTION OF THE TAX. Those who receive payment for the services rendered are made liable for the collection of the tax. Any person, corporation, partnership, or association, receiving any such payment, must file monthly return, under oath, in duplicate, with the Collector of Internal Revenue of the district in which the principal office or place of business of the public utility is located. The return must be made on an official form to be obtained from the office of the Collector. 495.-A DIFFERENCE TO NOTE. While the law states that in the case of shipments by freight or express the tax is to be collected only upon payments for transportation from one point in the United States to another, in the case of transportation of passengers it makes the tax applicable not only to travel from one point in the United States to another but also to any point in Canada or Mexico, so long as the ticket is sold or issued in the United States. This distinction should be borne in mind. CHAPTER XXXII TAX ON ADMISSIONS AND DUES The new Federal tax on admissions to places of amusement, recreation, etc., and on the dues or membership fees (including initiation fees) paid to any social, athletic or sporting club was made effective November 1, 1917. 496.-EXEMPTIONS. The admission tax is not imposed if the charge for admission to a place is not more than 5 cents, or (in the case of outdoor general amusement parks or shows or rides within such parks) is not more than 10 cents. The exemption also covers all admissions where the proceeds go exclusively to religious, educational, or charitable institutions, societies or organizations, or all admissions to agricultural fairs, when no part of the profits from such admissions inures to the benefit of any individual member. There are also exempted from subjection to tax all dues or fees paid to a fraternal beneficiary society, order, or association, operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system, and providing for the payment of life, sick, accident, or other benefits to the members of such society, order or association or their dependents. 497.-RATES OF TAX ON ADMISSIONS. With the exceptions noted above, the rates of tax on admissions are as follows: 1. One cent for each 10 cents or fraction thereof of the amount paid for admission. The tax must also be collected in the case of admission by season ticket or subscription. The person paying for the admission must pay the tax; the law says so. 2. One cent on admission of children under twelve years of age, whatever the amount of the charge for admission, when admission is charged. |