Rev. Rul. 63-204

The proclamation dated August 21, 1963, issued by the President of the United States under section 102 of the Tariff Classification Act of 1962 (Public Law 87-456, C.B. 1962-3, 57), makes effective, as of August 31, 1963, the amendments and repeals provided by such act of certain provisions of the Internal Revenue Code of 1954 relating to the tax on the manufacture of manufactured sugar under section 4501(a) of the Code and the tax on the first domestic processing of coconut oil, palm oil, and other named substances under section 4511 of the Code.

Pending final adoption of the amendments to the regulations on these two taxes, the Internal Revenue Service's position is as set forth below:

Tax on Sugar

Section 302(a) of the Tariff Classification Act of 1962 amends section 4501(a) of the Code to provide a single rate of tax of 0.53 cent per pound of the total sugars contained in manufactured sugar manufactured on or after August 31, 1963. This single rate of tax is in lieu of the graduated tax rates geared to the polariscopic test of the manufactured sugar. Any manufactured sugar manufactured before August 31, 1963, will be subject to tax at the graduated rates in effect before August 31, 1963.

Tax on Coconut Oil, Palm Oil, Etc.

Section 302(d) of the Tariff Classification Act of 1962 repeals the tax imposed under section 4511(b) of the Code at the rate of two cents per pound on the first domestic processing of coconut oil, effective with respect to articles which are, on or after August 31, 1963, entered, or withdrawn from warehouse, for consumption. This tax will continue to apply to the first domestic processing on or after August 31, 1963, of coconut oil entered, or withdrawn from warehouse, before August 31, 1963, unless such processing is exempt under section 4513 of the Code. Section 4513 provides that the tax under section 4511(b) of the Code does not apply if the coconut oil is wholly produced in, or wholly produced from materials grown or produced in, the Philippine Islands, any possession of the United States, or the Trust Territory of the Pacific Islands.

The basic tax of three cents a pound under section 4511(a) of the Code on the processing of coconut oil, palm oil, etc., which is suspended through June 30, 1966, was similarly repealed. Such tax will apply to processing on and after July 1, 1966, however, to the extent that any articles so processed were, prior to August 31, 1963, entered, or withdrawn from warehouse, for consumption.

Existing regulations will be amended to reflect the changes made in the provisions of the Code by the Tariff Classification Act of 1962.

¹ Based on Technical Information Release 505, dated August 30, 1963.