(T. D. 4336) Estate tax-Transfers Article 18, Regulations 70 (1929 edition), as amended by T. D. 4285, amended TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C. To Collectors of Internal Revenue and Others Concerned: Article 18 of Regulations 70 (1929 edition), approved March 23, 1929, as amended by T. D. 4285, approved March 15, 1930, is further amended to read as follows: ART. 18. Retention of possession, enjoyment, or income.—Any transfer which was made by the decedent after 10.30 p. m., Washington, D. C., time, March 3, 1931, and under which he retained for his life or any period not ending before his death (1) the possession or enjoyment of, or the income from, the property, or (2) the right to designate the persons who shall possess or enjoy the property or the income therefrom, is taxable, provided such transfer was not a bona fide sale for an adequate and full consideration in money or money's worth. Where the decedent retained the possession or enjoyment of, or the income from, only a part of the property, or where he retained the right to designate the persons who shall possess or enjoy only a part of the property or of the income therefrom, only a corresponding proportion of the value of the property should be included in the gross estate. Thus, for example, if the decedent retained one-half of the income then one-half of the transferred property should be included. DAVID BURNET, Commissioner of Internal Revenue. Approved April 11, 1932: OGDEN L. MILLS, Secretary of the Treasury. (T. D. 4337) Tax on electrical energy-Section 616, Revenue Act of 1932 Articles 40 and 41, Regulations 42, amended TREASURY Department, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C. To Collectors of Internal Revenue and Others Concerned: The first paragraph of article 40 of Regulations 42 is hereby amended to read as follows: The tax applies to the amount paid for all electrical energy furnished for domestic or commercial consumption, either by a privately or publicly owned electrical power company. The second paragraph of article 41 of Regulations 42 is hereby amended to read as follows: This exemption does not apply to payments for electrical energy for domestic or commercial consumption furnished by governmentally or municipally owned electrical power companies. RALPH E. SMITH, Acting Commissioner of Internal Revenue. Approved June 30, 1932: A. A. BALLANTINE, Acting Secretary of the Treasury. (T. D. 4338) Tax on telegraph, telephone, cable, and radio facilities Section 701, revenue act of 1932 TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, To Collectors of Internal Revenue and Others Concerned: Every person transmitting any telegraph, telephone, cable, or radio dispatch, message, or conversation "collect" to a point outside the United States, and receiving, whether from a connecting carrier or otherwise, any payment for the transmission, shall collect the tax and make return thereof in accordance with article 46. DAVID BURNET, Commissioner of Internal Revenue. Approved July 12, 1932: A. A. BALLANTINE, Acting Secretary of the Treasury. (T. D. 4339) Tax on lubricating oils-Section 601 (c) (1), revenue act of 1932 Article 11, Regulations 44, amended TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C. To Collectors of Internal Revenue and Others Concerned: ART. 11. Scope of tax.-The tax imposed under section 601 (c) (1) attaches to the sale by the manufacturer of lubricating oils. Lubricating oils imported into the United States are subject to a tax of 4 cents a gallon upon importation under section 601 (c) (4), but the importer's sale thereof is not taxed under section 601 (c) (1). "Lubricating oils" are all oils sold as such and all oils sold or used for lubrication. A particular oil having both lubricating and nonlubricating uses is taxable unless (1) it is put into a channel of consumption or distribution for a use other than that of lubrication, under a name identifying it for such use, and (2) the manufacturer obtains from the purchaser a certificate to the effect that the oil will be used by the purchaser for a stated purpose other than that of lubrication or resold by him only to a person who in turn furnishes a similar certificate. A blanket certificate covering all orders between given dates (for a period not exceeding a month) may be accepted from the purchaser. Such certificates and proper records of invoices, orders, etc., relative to tax-free sales must be retained as provided in article 50. Where, upon inspection, it is discovered that a manufacturer's records with respect to any sale claimed to be tax free do not contain a proper certificate, with supporting invoice and such other evidence as may be necessary to establish the character of the sale, tax shall be payable by the manufacturer on such sale. Examples of oils not subject to tax when sold (otherwise than as lubricating oil) for purposes other than lubrication, as prescribed in the preceding paragraph, are: Road oil, cordage oil, agricultural spray oil, cotton softener oil, ink oil,. medicinal white oil, and oil used as a component material in the manufacture of nontaxable oils, paint, insecticides, soap stock, grease, etc. The term "lubricating oils" does not include products of the type commonly known as grease. Oleaginous substances are classed as grease and not subject to the tax only if (1) of a worked consistency of less than 390 penetration units, or an unworked consistency of less than 360 penetration units, by the method of test of the American Society for Testing Materials D-217-27-T and (2) free from oil or comprising oil and a soap or a mixture of soaps or of soaps and other substances. Effective August 16, 1932, no lubricating oil shall be sold tax-free for furthe manufacture under section 620 to any person (other than a refiner of crude petroleum) unless the exemption certificate furnished pursuant to article 7 shows the registration number of the purchaser. Each manufacturer or producer of lubricating oils (other than a refiner of crude petroleum) will be granted a registration number upon application to the collector for the district in which is located his principal place of business (or, if he has no principal place of business in the United States, to the collector at Baltimore, Md.). Such numbers shall be in a separate series, beginning with the number 1, for each district. Applications for registration numbers shall state the name and place or places of business of the applicant and the nature of the processes of manufacture or production in which he is engaged. A person who merely blends taxable lubricating oils is not a manufacturer or producer, and such a blender may not purchase lubricating oils for blending taxfree under section 620 (see art. 7). A person who produces lubricating oils by a process of compounding involving more than the mere mixing of taxable oils, is a manufacturer or producer, and may be granted a registration number. A person who produces lubricating oil by reclaiming used lubricating oil, irrespective of the process used and whether or not new lubricating oil is added thereto, is a manufacturer or producer, and the tax attaches to oil so produced. when sold or used by him for lubrication. DAVID BURNET, Commissioner of Internal Revenue. Approved July 16, 1932: OGDEN L. MILLS, Secretary of the Treasury. (T. D. 4340) Estate tax Articles 16 and 20 of Regulations 70 (1929 edition) amended OFFICE OF COMMISSIONER OF INTERNAL REVENUE, To Collectors of Internal Revenue and Others Concerned: (2) Transfers not admitted to have been made in contemplation of death.-The executor is required to disclose in the return all transfers made by the decedent subsequent to September 8, 1916, of an amount or value of $5,000, or more. Any such transfer made within two years of the decedent's death, but before the effective date of the revenue act of 1926, and constituting a material part of decedent's property and in the nature of a final disposition or distribution thereof, is deemed to have been made in contemplation of death within the meaning of the statute. Where the executor contends that the transfer was not made in contemplation of death he must file with the return sworn statements, in duplicate, of all the material facts, including, among other things, the decedent's motive in making the transfers and his mental and physical condition at that time, and one copy of the death certificate. Article 20 of Regulations 70 (1929 edition), approved March 23, 1929, is hereby amended to read as follows: ART. 20. Power relinquished in contemplation of death.—Where property was transferred by the decedent, who reserved a power to alter, amend, or revoke the transfer, and such power was relinquished in contemplation of death, the value of the property should be included in the gross estate. (See art. 16.) DAVID BURNET, Commissioner of Internal Revenue. Approved July 15, 1932: OGDEN L. MILLS, Secretary of the Treasury. (T. D. 4341) Regulations 44, Articles 15 and 19, amended Tax on brewer's wort, liquid malt, malt sirup, and malt extract-Section 601 (c) (2), Revenue Act of 1932—Tax on grape concentrate, etc.-Section 601 (c) (3), Revenue Act of 1932 TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, To Collectors of Internal Revenue and Others Concerned: have plainly shown thereon the true name and address of the manufacturer, except that if the articles are sold by the manufacturer for resale the label may show the name of the vendee, instead of the manufacturer, preceded by the words "Packed for" or "Distributed by" or some equivalent phrase. Article 19 of Regulations 44 is hereby amended to read as follows: Labeling containers.—Each separate can, bottle, or other container in which any of the articles enumerated in section 601 (c) (3) is sold by the manufacturer must have plainly shown thereon the true name and address of the manufacturer, except that if the articles are sold by the manufacturer for resale the label may show the name of the vendee, instead of the manufacturer, preceded by the words "Packed for" or "Distributed by" or some equivalent phrase. DAVID BURNET, Commissioner of Internal Revenue. Approved July 20, 1932: OGDEN L. MILLS, Secretary of the Treasury. (T. D. 4342) Tax on electrical energy-Section 616 (a), revenue act of 1932 Articles 40 and 41 of Regulations 42 amended TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C. To Collectors of Internal Revenue and Others Concerned: The tax applies to the amount paid for all electrical energy furnished for domestic or commercial consumption by any person or agency (whether private, public, or quasi public) irrespective of whether such person or agency produces the energy so furnished. (For definition of the word "person," see sec. 1111 of the act.) All electrical energy furnished the consumer is taxable except (1) electrical energy furnished for industrial consumption, for example, that used in manufacturing, processing, mining, refining, shipbuilding, building construction, etc., and (2) that furnished for other uses which likewise can not be classed as domestic or commercial, such as used by public utilities, water works, irrigation companies, telegraph, telephone, and radio communication companies, railroads, other common carriers, educational institutions not operated for private profit, churches, and charitable institutions. However, electrical energy is subject to tax if consumed in the commercial phases of industrial or other businesses, such as in office buildings, sales and display rooms, retail stores, etc. Where electrical energy is supplied to a single consumer for two or more purposes, the specific use for which the energy is furnished, that is, whether for domestic or commercial consumption, or for other consumption, shall determine its taxable status. Where the consumer has all the electrical energy used at a given location furnished through one meter, the predominant character of the business carried on at such location shall determine the classification of electrical consumption for the purposes of this tax. |