Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 63-53

1963-1 C.B. 381

IRS Headnote

A marine supplier, otherwise known as a `ship chandler,' purchased distilled spirits from a distributor. The manufacturer thereof, who had previously paid the Federal tax thereon, shipped the spirits direct to the ship chandler. The distributor then billed the ship chandler for an amount exclusive of the Federal tax. Subsequently, the ship chandler sold the spirits for use as supplies on vessels. Held , the ship chandler is the `exporter' of the distilled spirits and, therefore, is the only person eligible to file claim for drawback of tax on such spirits.

Full Text

Rev. Rul. 63-53

Advice has been requested whether a manufacturer of distilled spirits or a `ship chandler' is the `exporter' of distilled spirits, for purposes of drawback of tax on spirits sold for use as supplies on vessels, under the circumstances described below.

A marine supplier, otherwise known as a `ship chandler,' holds a wholesale liquor dealer's basic permit and its wholesale facilities include duly qualified export storage premises. The ship chandler purchased distilled spirits, which were bottled especially for export, from a distributor. Upon instructions, the manufacturer thereof, who had previously paid the Federal tax thereon, shipped the spirits direct to the ship chandler. The distributor then billed the ship chandler for an amount exclusive of the Federal tax. Subsequently, the ship chandler sold the spirits for use as supplies on vessels.

Section 5062(b) of the Internal Revenue Code of 1954 provides for the allowance of a drawback equal in amount to the tax paid or determined on domestic distilled spirits and wines packaged or bottled especially for export, upon the exportation thereof, and authorizes the Secretary of the Treasury or his delegate to prescribe regulations governing the determination and payment of drawback of internal revenue tax on domestic distilled spirits and wines.

Section 252.190 of the Federal Exportation of Liquors Regulations provides, in part, that notice of intention to remove distilled spirits from export storage for export, for use as supplies on vessels or aircraft, or for deposit in a foreign trade zone, shall be prepared by the exporter on Form 1582, Drawback on Distilled Spirits Exported. The exporter shall also execute his claim and entry for drawback on the Form 1582.

The term `exporter' is not defined in the regulations. However, the term used in its ordinary meaning contemplates some person, who in his own capacity and not as an agent of another, takes the immediate action which results in the exportation of goods from the United States.

From the foregoing, it is apparent that the `exporter' is the person entitled to claim drawback of tax upon the exportation of distilled spirits. There is no requirement in the regulations that the claimant be the person who paid the tax or bore the economic burden of the tax.

In the instant case, the ship chandler purchased the spirits in his own capacity from the distributor and acquired full title thereto. Further, he sold the spirits in his own right for use as supplies on vessels. Accordingly, it is held that the ship chandler is the `exporter' and, therefore, is the only person eligible to file claim for drawback of tax on such spirits.