PRIA, Government Policy, Made Personal

Summary

If a seller (for example, a processor, jobber, or wholesaler) signed a real contract before a new tax on a commodity started, for delivery on or after the tax start date, and the contract does not allow adding the whole tax to the price, then the buyer must pay the part of the tax that cannot be added—unless the contract clearly bars adding any tax. The buyer must pay those taxes to the seller when the sale is completed. The seller must collect and send the money to the United States the same way other taxes under this chapter are handled. If the buyer refuses to pay, the seller must tell the Commissioner of Internal Revenue, who will collect the tax from the buyer.

Title 7, §618

Agriculture, Source: USLM XML via OLRC

(a)If (1) any processor, jobber, or wholesaler has, prior to the date a tax with respect to any commodity is first imposed under this chapter, made a bona fide contract of sale for delivery on or after such date, of any article processed wholly or in chief value from such commodity, and if (2) such contract does not permit the addition to the amount to be paid thereunder of the whole of such tax, then (unless the contract prohibits such addition) the vendee shall pay so much of the tax as is not permitted to be added to the contract price.

(b)Taxes payable by the vendee shall be paid to the vendor at the time the sale is consummated and shall be collected and paid to the United States by the vendor in the same manner as other taxes under this chapter. In case of failure or refusal by the vendee to pay such taxes to the vendor, the vendor shall report the facts to the Commissioner of Internal Revenue who shall cause collections of such taxes to be made from the vendee.

Notes & Related Subsidiaries

Editorial Notes

ConstitutionalityUnconstitutionality of processing and floor stock taxes, see note set out under section 616 of this title. SeparabilityValidity of remainder of this chapter as not affected should any of the provisions of this chapter be declared unconstitutional, see section 614 of this title.

Executive Documents

Transfer of Functions

Functions of all officers of Department of the Treasury, and functions of all agencies and employees of such Department, transferred, with certain exceptions, to Secretary of the Treasury, with power vested in him to authorize their performance or performance of any of his functions, by any of such officers, agencies, and employees, by 1950 Reorg. Plan No. 26, §§ 1, 2, eff. July 31, 1950, 15 F.R. 4935, 64 Stat. 1280, set out in the Appendix to Title 5, Government Organization and Employees. Commissioner of Internal Revenue, referred to in this section, is an officer of Department of the Treasury.

§618 Existing Contracts; Imposition of Tax on Vendee; Collection