§ 615. — Refunds of tax; exemptions from tax; compensating tax; compensating tax on foreign goods; covering into Treasury.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC615]
TITLE 7--AGRICULTURE
CHAPTER 26--AGRICULTURAL ADJUSTMENT
SUBCHAPTER III--COMMODITY BENEFITS
Sec. 615. Refunds of tax; exemptions from tax; compensating tax;
compensating tax on foreign goods; covering into Treasury
(a) If at any time the Secretary of Agriculture finds, upon
investigation and after due notice and opportunity for hearing to
interested parties, that any class of products of any commodity is of
such low value, considering the quantity of the commodity used for their
manufacture, that the imposition of the processing tax would prevent in
whole or in large part the use of the commodity in the manufacture of
such products and thereby substantially reduce consumption and increase
the surplus of the commodity, then the Secretary of Agriculture shall so
certify to the Secretary of the Treasury, specifying whether such
results will in his judgment most effectively be prevented by a
suspension of the imposition of the processing tax or a refund of the
tax paid, with respect to such amount of the commodity or any product
thereof as is used in the manufacture of such products, and thereafter,
as shall be specified in such certification, (1) the imposition of the
processing tax shall be suspended with respect to such amount of the
commodity as is used in the manufacture of such products, and
thereafter, as shall be specified in such certification, (2) the
imposition of the processing tax shall be suspended with respect to such
amount of the commodity as is used in the manufacture of such products
until such time as the Secretary of Agriculture, after further
investigation and due notice and opportunity for hearing to interested
parties, revokes his certification to the Secretary of the Treasury, or
(3) the Secretary of the Treasury shall refund (in accordance with the
provisions of, to such persons and in such manner as shall be specified
in, such certification) the amount of any tax paid (prior to the date of
any revocation by the Secretary of Agriculture of his certification to
the Secretary of the Treasury, upon further investigation and after due
notice and opportunity for hearing to interested parties) under this
chapter with respect to such amount of the commodity or any product
thereof as is used after the date of such certification in the
manufacture of such products, or shall credit against any tax due and
payable under this chapter the amount of tax which would be refundable.
During the period in which any certificate under this section is
effective, the provisions of subsection (e) of this section shall be
suspended with respect to all imported articles of the kind described in
such certificate; and notwithstanding the provisions of section 623 of
this title, any compensating taxes, which have heretofore, during the
period in which any certificate under this section has been effective,
become due and payable upon imported articles of the kind described in
such certificate, shall be refunded by the Secretary of the Treasury if
the same have been paid, or, if the same have not been paid the amount
thereof shall be abated. Notwithstanding the provisions of section 623
of this title, the Secretary of the Treasury shall refund or credit any
processing tax paid on or before June 12, 1934, with respect to such
amount of cotton as was used in the manufacture of large cotton bags (as
defined in the Certificate of the Secretary of Agriculture, dated June
12, 1934) between June 13, and July 7, 1934, both inclusive.
(b) No tax shall be required to be paid on the processing of any
commodity by or for the producer thereof for consumption by his own
family, employees, or household; and the Secretary of Agriculture is
authorized, by regulations, to exempt from the payment of the processing
tax the processing of commodities by or for the producer thereof for
sale by him where, in the judgment of the Secretary, the imposition of a
processing tax with respect thereto is unnecessary to effectuate the
declared policy.
(b-1) The Secretary of Agriculture is authorized and directed to
issue tax-payment warrants, with respect to rough rice produced in 1933
and 1934 (provided the processing of such rice is not exempt from the
tax, and provided no tax payment warrant has been previously issued with
respect thereto or previously applied for by application then pending,
sufficient to cover the tax with respect to the processing thereof at
the rate in effect at the time of such issuance, to any processor with
respect to any such rice which he had in his possession on March 31,
1935, and to, or at the direction of any other person with respect to
any such rice which, on or after April 1, 1935, he delivers for
processing or sells to a processor: Provided, That in case any such
processor or other person is the producer of such rice (or has received
such rice by gift, bequest, or descent from the producer thereof) that
such processor or other person is, if eligible, a cooperating producer:
And provided further, That in case such processor or other person is not
the producer thereof (nor a person who has received such rice by gift,
bequest, or descent from the producer thereof), (a) that, if the title
to such rice was transferred from the producer thereof, whether by
operation of law or otherwise, prior to April 1, 1935, such producer
received the price prescribed in any marketing agreement, license,
regulation, or administrative ruling, pursuant to this chapter,
applicable to the sale of such rice by the producer, and (b) that, if
the title to such rice was transferred from the producer thereof,
whether by operation of law or otherwise, on or after April 1, 1935,
such producer received at least the full market price therefor plus an
amount equal to 99 per centum of the face value of taxpayment warrants
sufficient to cover the tax on the processing of such rice at rate in
effect at the time title was so transferred, and was, if eligible, a
cooperating producer.
(b-2) The warrants authorized and directed to be issued by
subsection (b-1) of this section--
(1) shall be issued by the Secretary of Agriculture or his duly
authorized agent in such manner, at such time or times, at such place or
places, in such form, and subject to such terms and conditions with
reference to the transfer thereof or the voiding of warrants
fraudulently obtained and/or erroneously issued, as the Secretary of
Agriculture may prescribe, and the Secretary of Agriculture is
authorized to discontinue the further issuance of tax-payment warrants
at any time or times and in any region or regions when he shall
determine that the rice in any such region or regions can no longer be
identified adequately as rice grown in 1933 or 1934; and
(2) shall be accepted by the Collector of Internal Revenue and the
Secretary of the Treasury at the face value thereof in payment of any
processing tax on rice.
(b-3)(1) Any person who deals or traffics in, or purchases any such
tax-payment warrant or the right of any person thereto at less than 99
per centum of its face value shall be guilty of a misdemeanor and upon
conviction thereof shall be fined not more than $1,000 or imprisoned for
not more than one year or both.
(2) Any person who, with intent to defraud, secures or attempts to
secure, or aids or assists in or procures, counsels, or advises, the
securing or attempting to secure any tax-payment warrant with respect to
rice as to which any tax-payment warrant has been theretofore issued
shall be guilty of a misdemeanor and upon conviction thereof shall be
fined not more than $1,000 or imprisoned for not more than one year, or
both.
(3) Any person who with intent to defraud forges, makes, alters, or
counterfeits any tax-payment warrant or any stamp, tag, or other means
of identification provided for by this chapter or any regulation issued
pursuant thereto, or makes any false entry upon such warrant or any
false statement in any application for the issuance of such warrant, or
who uses, sells, lends, or has in his possession any such altered,
forged, or counterfeited warrant or stamp, tag, or other means of
identification, or who makes, uses, sells, or has in his possession any
material in imitation of the material used in the manufacture of such
warrants or stamps, tags, or other means of identification, shall, upon
conviction thereof, be punished by a fine not exceeding $5,000 or by
imprisonment not exceeding five years, or both.
(4) All producers, warehousemen, processors, and common carriers,
having information with respect to rice produced in the years 1933 or
1934, may be required to furnish to the Secretary of Agriculture such
information as he shall, by order, prescribe as necessary to safeguard
the issuance, transfer, and/or use of tax-payment warrants.
(5) The Secretary of Agriculture may make regulations protecting the
interests of producers (including share-tenants and share-croppers) and
others, in the issuance, holding, use, and/or transfer of such tax-
payment warrants.
(c) Any person, including any State or Federal organization or
institution, delivering any product to any organization for charitable
distribution or use, including any State or Federal welfare
organization, for its own use, whether the product is delivered as
merchandise, or as a container for merchandise, or otherwise, shall, if
such product or the commodity from which processed is under this chapter
subject to tax, be entitled to a refund of the amount of any tax due and
paid under this chapter with respect to such product so delivered, or to
a credit against any tax due and payable under this chapter of the
amount of tax which would be refundable under this section with respect
to such product so delivered: Provided, however, That no tax shall be
refunded or credited under this section, unless the person claiming the
refund or credit establishes, in accordance with regulations prescribed
by the Commissioner of Internal Revenue, with the approval of the
Secretary of the Treasury (1) that he has not included the tax in the
price of the product so delivered or collected the amount of the tax
from the said organization, or (2) that he has repaid, or has agreed in
writing to repay, the amount of the tax to the said organization. The
word ``State'' as used in this section shall include a State and any
political subdivision thereof.
(d) The Secretary of Agriculture shall ascertain from time to time
whether the payment of the processing tax upon any basic agricultural
commodity is causing or will cause to the processors or producers
thereof disadvantages in competition from competing commodities by
reason of excessive shifts in consumption between such commodities or
products thereof. If the Secretary of Agriculture finds, after
investigation and due notice and opportunity for hearing to interested
parties, that such disadvantages in competition exist, or will exist, he
shall proclaim such finding. The Secretary shall specify in this
proclamation the competing commodity and the compensating rate of tax on
the processing thereof necessary to prevent such disadvantages in
competition. Thereafter there shall be levied, assessed, and collected
upon the first domestic processing of such competing commodity a tax, to
be paid by the processor, at the rate specified, until such rate is
altered pursuant to a further finding under this section, or the tax or
rate thereof on the basic agricultural commodity is altered or
terminated. In no case shall the tax imposed upon such competing
commodity exceed that imposed per equivalent unit, as determined by the
Secretary, upon the basic agricultural commodity.
(e) During any period for which a processing tax is in effect with
respect to any commodity there shall be levied, assessed, collected, and
paid upon any article processed or manufactured wholly or partly from
such commodity and imported into the United States or any possession
thereof to which this chapter applies, from any foreign country or from
any possession of the United States to which this chapter does not
apply, whether imported as merchandise, or as a container of
merchandise, or otherwise, a compensating tax equal to the amount of the
processing tax in effect with respect to domestic processing of such
commodity into such an article at the time of importation: Provided, (1)
That in the event any of the provisions of this chapter have been or are
hereafter made applicable to any possession of the United States in the
case of any particular commodity or commodities, but not generally, this
chapter, for the purposes of this subsection, shall be deemed applicable
to such possession with respect to such commodity or commodities but
shall not be deemed applicable to such possession with respect to other
commodities; and (2) That all taxes collected under this subsection upon
articles coming from the possessions of the United States to which this
chapter does not apply shall not be covered into the general fund of the
Treasury of the United States but shall be held as a separate fund and
paid into the Treasury of the said possessions, respectively, to be used
and expended by the governments thereof for the benefit of agriculture.
Such tax shall be paid prior to the release of the article from customs
custody or control.
(f) The President, in his discretion, is authorized by proclamation
to decree that all or part of the taxes collected from the processing of
sugar beets or sugarcane in Puerto Rico, the Territory of Hawaii, the
Virgin Islands, American Samoa, the Canal Zone, and/or the island of
Guam (if the provisions of this chapter are made applicable thereto),
and/or upon the processing in continental United States of sugar
produced in, or coming from, said areas, shall not be covered into the
general fund of the Treasury of the United States but shall be held as a
separate fund, in the name of the respective area to which related, to
be used and expended for the benefit of agriculture and/or paid as
rental or benefit payments in connection with the reduction in the
acreage, or reduction in the production for market, or both, of sugar
beets and/or sugarcane, and/or used and expended for expansion of
markets and for removal of surplus agricultural products in such areas,
respectively, as the Secretary of Agriculture, with the approval of the
President, shall direct.
(May 12, 1933, ch. 25, title I, Sec. 15, 48 Stat. 39; May 9, 1934, ch.
263, Secs. 8, 11, 48 Stat. 675, 676; June 16, 1934, ch. 551, 48 Stat.
973; June 26, 1934, ch. 759, Sec. 1, 48 Stat. 1241; Mar. 18, 1935, ch.
32, Secs. 8, 9, 49 Stat. 47, 48; Aug. 24, 1935, ch. 641, Secs. 21-24, 49
Stat. 768; June 22, 1936, ch. 690, Sec. 601(a), 49 Stat. 1739; Proc. No.
2695, eff. July 4, 1946, 11 F.R. 7871, 60 Stat. 1352.)
References in Text
For definition of Canal Zone, referred to in subsec. (f), see
section 3602(b) of Title 22, Foreign Relations and Intercourse.
Codification
Reference to the Philippine Islands in subsec. (f) was omitted as
obsolete in view of the independence proclaimed by the President of the
United States by Proc. No. 2695, which is set out as a note under
section 1394 of Title 22, Foreign Relations and Intercourse.
Amendments
1936--Subsecs. (a), (c). Act June 22, 1936, reenacted subsecs. (a)
and (c) only for the purpose of allowing refunds in cases where the
delivery for charitable distribution or use, or the exportation, or the
manufacture of large cotton bags, or the decrease in the rate of the
processing tax, took place prior to Jan. 6, 1936.
1935--Subsec. (a). Act Aug. 24, 1935, Sec. 21, inserted ``or shall
credit against any tax due and payable under this chapter the amount of
tax which would be refundable. During the period in which any
certificate under this section is effective, the provisions of
subsection (e) of this section shall be suspended with respect to all
imported articles of the kind described in such certificate; and
notwithstanding the provisions of section 623 of this title, any
compensating taxes, which have heretofore, during the period in which
any certificate under this section has been effective, become due and
payable upon imported articles of the kind described in such
certificate, shall be refunded by the Secretary of the Treasury if the
same have been paid, or, if the same have not been paid the amount
thereof shall be abated. Notwithstanding the provisions of section 623
of this title, the Secretary of the Treasury shall refund or credit any
processing tax paid on or before June 12, 1934, with respect to such
amount of cotton as was used in the manufacture of large cotton bags (as
defined in the Certificate of the Secretary of Agriculture, dated June
12, 1934) between June 13, and July 7, 1934, both inclusive''.
Subsecs. (b-1) to (b-3). Act Mar. 18, 1935, Sec. 8, added subsecs.
(b-1) to (b-3).
Subsec. (e). Act Aug. 24, 1935, Sec. 24, inserted ``into such an
article'' after ``with respect to domestic processing of such
commodity''.
Subsec. (e). Act Mar. 18, 1935, Sec. 9, among other changes,
inserted ``(1) That in the event any of the provisions of this chapter
have been or are hereafter made applicable to any possession of the
United States in the case of any particular commodity or commodities,
but not generally, this chapter, for the purposes of this subsection,
shall be deemed applicable to such possession with respect to such
commodity or commodities but shall not be deemed applicable to such
possession with respect to other commodities; and (2)'' at beginning of
proviso.
1934--Subsec. (a). Act June 26, 1934, among other changes, inserted
``and thereafter, as shall be specified in such certification, (1) the
imposition of the processing tax shall be suspended with respect to such
amount of the commodity as is used in the manufacture of such
products''.
Subsec. (c). Act June 16, 1934, among other changes, inserted
proviso.
Subsec. (e). Act May 9, 1934, Sec. 11, substituted ``partly'' for
``in chief value'', inserted ``whether imported as merchandise, or as a
container of merchandise, or otherwise,'' after ``apply'', and inserted
``of such commodity'' after ``processing''.
Subsec. (f). Act May 9, 1934, Sec. 8, added subsec. (f).
Separability
Validity of remainder of this chapter as not affected should any of
the provisions of this chapter be declared unconstitutional, see section
614 of this title.
Constitutionality
Unconstitutionality of processing and floor stock taxes, see note
set out under section 616 of this title.
Abolition of Offices and Transfer of Functions
The office of Internal Revenue Collector was abolished by 1952
Reorg. Plan No. 1, Sec. 1, eff. Mar. 14, 1952, 17 F.R. 2243, 66 Stat.
823, set out in the Appendix to Title 5, Government Organization and
Employees, and by section 2 thereof a new office of district
commissioner of internal revenue was established. Section 4 of the Plan
transferred all functions, that had been vested by statute in any
officer or employee of the Bureau of Internal Revenue since the
effective date of 1950 Reorg. Plan No. 26, Secs. 1, 2, 15 F.R. 4935, 64
Stat. 1280, 1281, to the Secretary of the Treasury.
All functions of all officers of the Department of the Treasury, and
all functions of all agencies and employees of such Department, were
transferred, with certain exceptions, to the Secretary of the Treasury,
with power vested in him to authorize their performance or the
performance of any of his functions, by any of those officers, agencies,
and employees, by 1950 Reorg. Plan No. 26, Secs. 1, 2, eff. July 31,
1950, 15 F.R. 4935, 64 Stat. 1280, set out in the Appendix to Title 5.
The Collector and Commissioner of Internal Revenue, referred to in this
section, are officers of the Treasury Department.
Admission of Hawaii to Statehood
Hawaii was admitted into the Union on Aug. 21, 1959, on issuance of
Proc. No. 3309, Aug. 25, 1959, 24 F.R. 6868, 73 Stat. c74. For Hawaii
statehood law, see Pub. L. 86-3, Mar. 18, 1959, 73 Stat. 4, set out as a
note preceding section 491 of Title 48, Territories and Insular
Possessions.
Appropriations
Appropriations for refunds, etc., see note under section 610 of this
title.
Section Referred to in Other Sections
This section is referred to in sections 609, 616, 673 of this title.
