the law intended to make the subject of taxation. For instance, by way of illustration, if a testator, with an estate worth $50,000, makes a bequest of $25,000 to a person, and the residue of the estate is consumed in the payment of debts, the whole estate goes into the hands of the executor, and yet only the legacy of $25,000 would be taxable under the provisions of this act. I can illustrate further by taking a specific legacy of jewelry or plate. This is taxable or not, according to its actual value. If such legacy is worth exceeding $10,000, then it is liable to the tax; if not, it is not taxable.

The same principle applies as to the estates of intestates, no matter what the gross amount which comes to the hands of the administrator may be. It is the amount which remains for distribution, after the payment of debts, which the law intends to tax. An illustration: Suppose an estate which comes to an administrator consists of $100,000 in money, or other personal property, and the intestate owes upward of $100,000. The entire estate will be consumed in the payment of debts. In such case the provisions of section 29 do not apply, because there is nothing for distribution; there can be no distributive shares. To levy a tax upon the $100,000 in such case would not be taxing a legacy or distributive share arising from personal property, but it would really be levying a tax upon the property of a deceased person, which ought to go to pay his debts. It would be indirectly a tax upon the creditors of a deceased person and not upon a legatee or distributee. However, on the other hand, if the estate which comes to the hands of the administrator is of the value of $100,000, and $50,000 will pay debts and costs of administration, leaving $50,000 for distribution to those entitled, such distributive shares of this $50,000 (as the whole amount exceeds $10,000) would be subject to the tax under the provisions of the act. It is the net amount which remains in the hands of the administrator for distribution to the next of kin or those entitled which constitutes distributive shares in the estate of a decedent.

The word "passing," which is used in the act, is also explanatory of its meaning. It too refers to legacies or distributive shares "passing" after the passage of the act. A legacy passes from the testator to the legatee. A distributive share passes from the intestate to the distributee. An executor or administrator is the mere agency or instrumentality to carry out the purposes declared in a will, or to administer an estate of a deceased person according to the requirements of the law. A legacy or distributive share, in contemplation of law, does not pass to these agencies; it simply passes through them to such person as is entitled to the legacy or distributive share.

I hold, therefore, that it is the purpose of the law under consideration, not to levy a tax upon the gross amount of estates in the hands of executors, administrators, etc., but to tax such legacies and distributive shares arising from personal property as exceed $10,000 in actual value. The tax is upon the legacy or distributive share, not upon the

estate.

Respectfully,

Approved:

JAS. E. BOYD, Assistant Attorney-General.

JOHN W. GRIGGS, Attorney-General.

LIQUORS.

See also WINES; and DECISIONS 19646, p. 216; 19689, p. 283.)

(19616.)

Taxability of ginger ale and hop ale.

Ginger ale held not to be liable to taxation under Schedule B, act of June 13, 1898, unless specially advertised as medicinal, and not liable under section 3339, Revised Statutes, as a similar fermented liquor to ale, beer, etc.-Hop ale held liable to tax as fermented liquor under section 3339, Revised Statutes, and the venders thereof to special tax as malt liquor dealers.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., July 2, 1898. SIR: Your letter of the 22d ultimo, asking about the taxability of ginger ale and similar preparations made from essences and extracts, together with sirup and water, has been received. These articles are not taxable as medicinal preparations under Schedule B, unless they are specially advertised as specifics for some disease of the human or animal body.

It has heretofore been ruled by this office that ginger ale is not liable under the clause taxing fermented liquors, it not being a similar fermented liquor to ale, lager beer, and porter. (See section 3339, Revised Statutes.)

Hop ale made from hops, sugar, and water has been held liable to taxation under this section as a similar fermented liquor, and parties manufacturing the same have been held as brewers and wholesale and retail mælt liquor dealers.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. A. M. LEMON, Collector Fourth District, Grand Rapids, Mich.

(19745.)

Special tax-Clubs.

Requirements in regard to clubs, whether they shall pay special tax as retail liquor dealers or as proprietors of a billiard room.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., July 21, 1898.

SIR: Your letter of the 30th ultimo has been received, submitting the petition presented by the officers of the Cumberland Club, of Knoxville, Tenn., setting forth reasons why, in their opinion, the club should not be compelled to pay special tax as a retail liquor dealer or as a proprietor of a billiard room.

The grounds upon which the officers of this club rely for relief from the retail liquor dealer's special tax are that the club sells wines and liquors to its members only, and not for profit; and they refer to a decision of the supreme court of Tennessee in which it was held upon these grounds that the club was not a retail liquor dealer within the meaning of the law of that State. These same arguments were fully considered by Judge Lowell in the case of The United States v. Wittig (22 Int. Rev. Rec., 98), in which the decision was that any course of selling, though to a restricted class of persons and without a view to profit, is within the meaning of the statute imposing the special tax. This is the settled ruling of this office, and has been for more than twenty-five years, and I entertain no doubt that it is correct.

The decision of the supreme court of Tennessee is conclusive with reference to the question of liability of retail liquor dealers under the State law, but it is not accepted here as applicable to the construction of the internal-revenue laws with reference to the special tax imposed upon retail liquor dealers.

The decision in the case of Wittig applies as well to incorporated clubs as to those which are unincorporated. If, therefore, the Cumberland Club refuses to make return and pay the special tax within the current month as a retail liquor dealer, you will next month report the case to this office for assessment of the special tax and 50 per cent additional under section 3176, Revised Statutes.

The club is not required to pay special tax as a proprietor of a billiard room by reason of the fact that it keeps billiard tables for the use of its members and invited guests. The special tax imposed by the ninth paragraph of section 2 of the act of June 13, 1898, upon proprietors of bowling alleys and billiard rooms "for each alley or table" expressly relates only to those buildings or places which are "open to the public." This evidently means open to persons in general, and can not apply to a club which excludes the public and admits to its privileges only its own members and their invited guests.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. A. J. TYLER,, Collector Second District, Knoxville, Tenn.

(19994.)

Special tax-Army canteens.

The special tax of a retail liquor dealer (or malt liquor dealer, as the case may be) is required to be paid for the sale of alcoholic liquor at army canteens if the canteens are not Government agencies and the sales of liquor there are made for individual profit.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., August 31, 1898.

SIR: In reply to your letter of the 25th instant, you are hereby advised that if the canteens at Camp Meade, Middletown, Pa., to

which you refer, are established under authority of the War Department and are under the control of that Department to the extent of being Government agencies, no special tax is required to be paid for the sale of liquor at such canteens. But if they are carried on merely by private individuals, for their own profit, on permits granted to them by the officers of the camp, these persons must be required to make return and pay special tax as liquors dealers (or malt liquor dealers, as the case may be), and in the event of their refusal to make return and pay special tax within the calendar month in which the liability begins you will report their cases in your next list to this office for assessment of the special tax and penalty.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. H. L. HERSHEY, Collector Ninth District, Lancaster, Pa.

́(20233.)

Tax and special tax-Hop beer.

A fermented liquor made from hops and sugar and sold under the name "hop beer" or any other name, if it resembles in general character, taste, etc., the fermented malt liquor called "weiss beer,” however small its alcoholic strength may be, is subject to tax under the first section of the war-revenue act, and persons who manufacture it for sale are required to pay special tax as brewers and tax on this beer, and also special tax as malt-liquor dealers for selling it in bottles.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., October 22, 1898. SIR: In reply to a letter addressed to this office by one of your constituents, Mr. James H. Bingham, of Lawrence, Mass., to which you call attention in your letter of the 17th instant, asking for a ruling with reference to the beverage called "hop beer," which is to "contain 1 per cent or less of alcohol," you will please inform him that, as the first paragraph of section 3244, Revised Statutes, requires that every person shall be regarded as a brewer who "manufactures fermented liquors of any name or description, for sale, from malt, wholly or in part, or from any substitute therefor," if he should manufacture a fermented liquor from hops and sugar which resembles in general character, taste, appearance, etc., weiss beer (weiss beer being a fermented liquor made from malt, and therefore being subject to the tax imposed upon beer by the provisions of the war-revenue act, notwithstanding the fact that its alcoholic strength is usually very small, sometimes being but 1 per cent), this hop beer must be regarded as having been made from a substitute for malt within the meaning of the statute. And if he makes it for sale he must give bond and pay special tax as a brewer and special tax as a malt-liquor dealer for selling it in bottles, and also pay tax on this beer under the first section of the war-revenue act of June 13, 1898. A genuine "root beer" or "spruce beer"—that is, a beer made from roots, herbs, or bark, or extracts thereof, with sugar-is not a similar

fermented liquor to weiss beer or to any other of the fermented malt liquors enumerated in section 3339, Revised Statutes, and therefore is not regarded as made from a substitute for malt; and the manufacturer of it is not required to pay tax thereon or special tax as a brewer and malt-liquor dealer for making and selling it.

Respectfully, yours, G. W. WILSON, Acting Commissioner. Hon. W. S. KNOX, Lawrence, Mass.

(20366.)

Special tax-Blackberry wine—Stamp tax.

A person who sells blackberry wine (a fermented liquor made from blackberry juice) is required to pay special tax as a liquor dealer for selling the wine, unless he is the manufacturer of it and has made it from berries grown by himself or gathered wild by himself or by persons in his employ, and the wine is sold by him only at the place of manufacture or at his one "general business office" (sec. 3246, Rev. Stat.). When he bottles the wine for sale,, he must pay stamp tax and affix the requisite stamp on each bottle.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., November 21, 1898. SIR: In reply to a letter of inquiry which you have addressed to this office as to whether 66 you can make and sell blackberry wine without special United States internal revenue license," you are hereby advised that you can not do so unless the wine is made by you from blackberries of your own growing, or gathered wild by yourself or by persons in your employ, and unless this wine is sold by you only at the place of manufacture or at but one "general business office," (sec. 3246, Rev. Stat.). If this or any other wine is put up in bottles for sale, tax must be paid thereon under the following provisions of Schedule B of the act of June 13, 1898 (war revenue act):

Sparkling or other wines, when bottled for sale, upon each bottle containing one pint or less, one cent.

Upon each bottle containing more than one pint, two cents

Respectfully, yours, G. W. WILSON, Acting Commissioner. Mr. J. J. ROBERTSON, Tally, Va.

(20464.)

Additional tax on fermented malt liquor.

Opinion of the Attorney-General on the question of the liability of retail dealers to the additional tax of $1 a barrel on fermented malt liquor bought by them prior to June 14, 1898, and held in stock by them on that date.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 28, 1898.

The appended opinion of the honorable Attorney-General is hereby promulgated for the information and guidance of all officers of the Internal-Revenue Service.

N. B. SCOTT, Commissioner.