Liquor Dealers, Taxability of

January 8, 1958 BIR RULING NO. 016-58 The Chief, Alcohol and Prohibited Drugs Division B.I.R., Manila S i r : This is with reference to your memorandum dated December 16, 1957 regarding the case of the Seven-Up (Phil.) Inc. cdt It appears from the records of this case that the Seven-Up (Phil.) Inc. was granted by this Office on December 12, 1957 a permit to procure seventy-two (72) drums of taxpaid rectified alcohol from La Tondea, Inc. to be used in the manufacture of seven-up extract for sale exclusively to the Seven-Up Bottling Co., Inc. a corporation distinct and separate from the Seven-Up (Phil.) Inc. The question now is whether or not the Seven-Up (Phil.) Inc. is subject to the fixed tax as wholesale liquor dealer. Section 194(g) of the National Internal Revenue Code provides as follows: "SEC. 194. Words and phrases defined . "(g) 'Wholesale liquor dealer' comprehends every person who for himself or on commission sells or offers for sale wines or distilled spirits (other than denatured alcohol) in larger quantities than five liters at any one time or who sells or offers the same for sale for the purpose of resale, irrespective of quantity." Under the abovequoted provision of law only those who sell or for sale wines or distilled spirits in quantities required by law can be considered wholesale liquor dealer. Those who sell or offer for sale articles other than wines or distilled spirits cannot be considered a wholesale liquor dealer. Inasmuch as the article sold by the Seven-Up (Phil.) Inc. to the Seven-Up Bottling Co., Inc. is seven-up extract and not wine or distilled spirit, it cannot be considered a wholesale liquor dealer. cdll Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue