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.

1

(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 1 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).]

SEC. 3255. LIABILITY IN CASE OF BUSINESS IN MORE THAN ONE LOCATION.

(a) RETAIL DEALERS IN LIQUORS OR MALT LIQUORS.-Any retail dealer in liquors or retail dealer in malt liquors whose business is such as to require him to travel from place to place in different States of the United States may, under regulations prescribed by the Commissioner, with the approval of the Secretary, procure a special tax stamp "At Large" covering his activities throughout the United States with the payment of but one special tax as a retail dealer in liquors or as a retail dealer in malt liquors, as the case may be.

(b) DEALERS IN LIQUORS OR MALT LIQUORS.-Nothing contained in this chapter shall prevent the issue, under such regulations as the Commissioner may prescribe, of special tax stamps to persons carrying on the business of retail dealers in liquors, or retail dealers in malt liquors, upon passenger railroad trains or upon steamboats or other vessels engaged in the business of carrying passengers.

(c) DEALERS IN LIQUORS OR MALT LIQUORS MAKING SALES ON PURCHASER DEALERS' PREMISES.-No wholesale or retail dealer in liquors or wholesale or retail dealer in malt liquors who has paid the special tax as such a dealer shall again be required to pay special tax as such dealer on account of sales of beer, lager beer, ale, porter, or other similar fermented malt liquor to wholesale or retail dealers in liquors or wholesale or retail dealers in malt liquors consummated at the purchaser's place of business covered by the stamp issued to him to denote the payment of the special tax imposed upon such dealers.

SEC. 3260. TAX.

Part VIII-Firearms

(a) RATE.-Upon first engaging in business, and thereafter on or before the first day of July of each year, every importer, manufacturer, and dealer in firearms shall pay a special tax at the following

rates:

(1) IMPORTERS OR MANUFACTURERS.-Importers or manufacturers, $500 a year;

(2) DEALERS OTHER THAN PAWNBROKERS.-Dealers, other than pawnbrokers, $200 a year;

(3) PAWNBROKERS.-Pawnbrokers, $300 a year;

Provided, That manufacturers and dealers in guns with two attached barrels, 12 inches or more in length, from which only a single discharge can be made from either barrel without manual reloading, guns designed to be held in one hand when fired and having a barrel 12 inches or more in length from which only a single discharge can be made without manual reloading, or guns of both types, shall pay the following taxes: Manufacturers, $25 per year; dealers, $1 per year.

(b) COMPUTATION OF TAX.-Where the tax is payable on the first day of July in any year it shall be computed for one year; where the tax is payable on any other day it shall be computed proportionately from the first day of the month in which the liability to the tax accrued to the first day of July following.

[For license to transport, ship, or receive firearms or ammunition, see section 3 of the act of Ĵune 30, 1938 (52 Stat. 1251; 15 U. S. C. 903).]

SEC. 3261. REGISTRATION.

(a) IMPORTERS, MANUFACTURERS, AND DEALERS.-Upon first engaging in business, and thereafter on or before the first day of July of each year, every importer, manufacturer, and dealer in firearms shall register with the collector of internal revenue for each district in which such business is to be carried on his name or style, principal place of business, and places of business in such district.

(b) PERSONS IN GENERAL.-Every person possessing a firearm shall register, with the collector of the district in which he resides, the number or other mark identifying such firearm, together with his name, address, place where such firearm is usually kept, and place of business or employment, and, if such person is other than a natural person, the name and home address of an executive officer thereof: Provided, That no person shall be required to register under this subsection with respect to any firearm acquired after July 26, 1934, and in conformity with the provisions of this part and subchapter B of chapter 25.

(c) PRESUMPTION OF POSSESSION.- Whenever on trial for a violation of section 2726 (a) hereof the defendant is shown to have or to have had possession of such firearm at any time after September 24, 1934, without having registered as required by subsection (b), such possession shall create a presumption that such firearm came into the possession of the defendant subsequent to July 26, 1934, but this presumption shall not be conclusive.

SEC. 3262. EXEMPTIONS.

For provisions exempting certain transfers, see section 2721.

SEC. 3263. UNLAWFUL ACTS IN CASE OF FAILURE TO REGISTER AND PAY SPECIAL TAX.

(a) IMPORTATION, MANUFACTURE, OR DEALING IN FIREARMS.-It shall be unlawful for any person required to register under the provisions of section 3261 to import, manufacture, or deal in firearms without having registered and paid the tax imposed by section 3260.

(b) TRANSPORTATION IN INTERSTATE COMMERCE.-It shall be unlawful for any person who is required to register as provided in section 3261 (b) and who shall not have so registered, or any other person who has not in his possession a stamp-affixed order as provided in section 2723, to ship, carry, or deliver any firearm in interstate commerce.

SEC. 3264. OTHER LAWS APPLICABLE.

For provisions relating to special taxes, and other provisions relating to the tax on narcotics made applicable to the taxes imposed by this part, see section 2731.

SEC. 3265. DEFINITIONS.

For definitions of firearm, machine gun, importer, manufacturer, dealer, and other terms used in this part, see section 2733.

SEC. 3266. TRANSACTIONS BETWEEN REGISTERED PERSONS.

For provisions exempting dealings between registered persons in certain respects, see section 2723 (d).1

1 The statute reads "2733 (d)."