Internal Revenue Service
Revenue Ruling
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smRev. Rul. 72-56
1972-1 C.B. 420
IRS Headnote
Hair sprays made with specially denatured spirits may be packaged un bulk, pressurized containers from which consumer-sized pressurized containers may be filled; such bulk containers may be sold to beauty parlor operators and used by them for filling consumer containers; Revenue Ruling 64-281 superseded.
Full Text
Rev. Rul. 72-56
In connection with the proposed manufacture and sale of a pressurized bulk tank, of greater than one-gallon capacity, from which specially designed, consumer-sized (8 or 13-ounce) pressurized containers could be filled and refilled with hair sprays manufactured with specially denatured spirits, the Internal Revenue Service has been asked to rule on the following questions:
1. In order to be eligible to receive hair sprays in such bulk tanks and to fill and refill consumer containers therefrom, must the operators of beauty parlors file applications as contemplated by 26 CFR 211.193, on Form 2622, Application to Procure, Reprocess, Bottle, Repackage, or Resell Products Containing Specially Denatured Alcohol?
2. May a manufacturer of hair sprays sell such products to a beauty parlor in the proposed bulk tanks without having received a copy of an approved Form 2622 authorizing such beauty parlor to receive such products in containers larger than one-gallon, as contemplated by 26 CFR 211.194?
3. Must the labels used on consumer containers of hair sprays filled by beauty parlors from the above discussed bulk tanks show the names and addresses of the beauty parlor operators in the manner contemplated by 26 CFR 211.195(b)?
4. Must beauty parlor operators who fill consumer containers from the proposed bulk tanks obtain approval of the labels used on such consumer containers by filing applications (as contemplated in 26 CFR 211.197) on Forms 1479-A, Formula for Article Made With Specially Denatured Alcohol or Rum?
The one common purpose of the various procedures prescribed in 26 CFR 211.193, 211.194, 211.195, and 211.197 is to aid in the protection of the revenue by bringing under the scrutiny of the Internal Revenue Service all persons who acquire bulk quantities of articles from which potable untaxpaid distilled spirits could be extracted.
The Service has previously found that hair sprays cannot be easily removed from bulk pressurized containers in liquid form in sufficient quantities to make it practical to further process such products and divert them to beverage use. The bulk pressurized containers which were the subject of that finding were substantially similar to those involved in this case, except that they were not equipped with fittings through which their contents could be transferred into smaller (consumer-sized) containers. In that previous case, the Service ruled (in Revenue Ruling 64-281, C.B. 1964-2, 565) that beauty parlors and similar establishments need not file applications on Form 2622 in order to purchase hair sprays in the bulk pressurized containers then under consideration.
With reference to the questions now before it, the Service has concluded that there is no more likelihood of unauthorized persons obtaining significant quantities of hair sprays in liquid form from the proposed bulk tanks than there would be with reference to the bulk containers involved in Revenue Ruling 64-281.
The adaptability of the proposed containers for use in filling consumer-sized containers does not seem to increase the likelihood of unauthorized persons obtaining hair sprays in liquid form, and the number of such consumer-sized containers filled and refilled by any single beauty parlor operator would in all probability be minimal. Moreover, it appears that if necessary for administrative purposes, Government officers could readily identify the source of supply from which any such consumer-sized containers were filled and, in turn, the source of supply from which the bulk tanks were filled. In view of these considerations, it does not seem that any practical purpose would be served by requiring the beauty parlor operators to show their names and addresses on the labels for the consumer-sized containers or to obtain label approval therefor.
It is, therefore, held that operators of beauty parlors need not file applications on Form 2622 in order to receive hair sprays which have been manufactured with specially denatured alcohol and packaged in pressurized bulk tanks of greater than one-gallon capacity, nor need they file such applications in order to fill and refill consumer-sized pressurized containers from such bulk tanks for sale to their customers. Manufacturers or distributors of such hair sprays who package or distribute them in the pressurized bulk tanks may sell them in such containers to beauty parlor operators not holding approved Forms 2622, provided such manufacturers or distributors have obtained approval for such transactions pursuant to application filed according to the provisions of 26 CFR 211.22.
It is held further (1) that the labels used on the consumer-sized, pressurized containers (of less than 32 ounces capacity) to be filled and refilled by the operators of beauty parlors need not show the names and addresses of such beauty parlor operators, provided such labels have been approved on Forms 1479-A as brand labels for the hair spray manufacturers or distributors who sell the hair sprays to the beauty parlors; and (2) that beauty parlor operators need not obtain approval, on Forms 1479-A, for the labels used on the consumer-sized pressurized containers which they fill and refill from the bulk pressurized containers, provided that at the time of filling or refilling of any such consumer-sized container it bears a proper brand label as discussed above.
Distributors or manufacturers of hair sprays manufactured with specially denatured alcohol who file applications, and are authorized, under 26 CFR 211.22, to ship such hair sprays in pressurized containers of greater than one-gallon capacity to beauty parlors shall keep records showing the dates of such shipments, the quantities shipped, and the names and addresses of the customers to whom such shipments are made. Such records must be kept available for inspection by internal revenue officers.
This ruling supersedes Revenue Ruling 64-281, C.B. 1964-2, 565.