Rev. Rul. 58-522

Section 4591 of the Internal Revenue Code of 1954 imposes a tax on all oleomargarine imported from foreign countries. There is no tax on the domestic manufacture of oleomargarine. Section 7652 of the Code provides, so far as applicable here, that articles of merchandise of Puerto Rican manufacture coming into the United States and withdrawn for consumption or sale shall be subject to a tax equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture. Held, oleomargarine manufactured in Puerto Rico and shipped to the United States is not subject to tax under section 7652 of the Code since no tax is imposed on the domestic manufacture of oleomargarine. Furthermore, the tax imposed under section 4591 of the Code does not apply to oleomargarine manufactured in Puerto Rico and shipped to the United States since Puerto Rico is not a foreign country. However, the tax imposed under section 4591 of the Code does apply if the oleomargarine is manufactured in a foreign country, shipped to Puerto Rico, and then shipped to the United States.