Evening Republican, Volume 22, Number 112, Rensselaer, Jasper County, 13 May 1919 — NEW TAX ON SOFT DRINKS CAUSES CONFUSION [ARTICLE]

NEW TAX ON SOFT DRINKS CAUSES CONFUSION

<Some confusion resulted during the first days after the so-called ice cream tax and luxury tax, imposed by the new revenue law became effective May 1. This was due in nearly all cases to a lack of information on the law, but the situation is improving, according to Peter J._ Kruyer, collector of internal revenue. Soft drinks and ice creams were the greatest source of misunderstanding. Several complaints. were received that where 5-cent drinks-were ordered for two persons, to be paid for by one person, the dealers were charging 2 cents tax on the ground that each 5-cent check represented a separate sale. As to this the ruling of the treasury department that “the tax is measured by the price for which such food or drink is sold and is upon the whole amount of price paid by the purchaser. When the price is paid at one time, though payment for several articles which are the subject of a single transaction, the total price paid is the unit for computing the tax.” This, of course, would make the tax on two 5-cent drinks bought in this manner only 1 cent, instead of 2 cents. Another source of complaint was that some department store lunch counters were serving ice cream with meals without collecting the tax, while confectioners and ice cream parlors, who also serve lunches, were collecting the tax for ice cream served with food. In this case both dealers were right, Mr. Kruyer said. Ice cream parlors, confectioneries and similar places where such articles are the principal items of busines and the lunches are a side issue, he said, must collect the ice cream tax, while places where the sale of food -is the principal business come under the ruling that “soft drinks, ice cream and similar articles are not taxable when the sales are made in the regular course of business at a hotel, restaurant, cafeteria, lunch room or clubhopse, unless such articles are sold separate and apart from meals.”