|Rev Ruling 54-451
Beer as Ship's Supplies
Advice is requested whether a company other than a brewer may solicit orders for beer as ship's supplies and, upon receipt of such orders, make delivery of the beer.
Section 192.390 of Regulations 18 provides that fermented malt liquor may be removed from breweries and brewery bottling houses free of tax for use as supplies on certain vessels and aircraft specified therein. Section 192.392 of Regulations 18 requires that application be make on Form 1689, "Fermented Malt Liquor for Export," for the removal of fermented malt liquor from a brewery for use as supplies on vessels and aircraft.
A company other than a brewer solicits orders for beer from ships that call at a port. Upon receipt of an order, such company, as a wholesaler, purchases from a brewer the amount of beer required to fill the order, and requests the brewer to execute Form 1689 covering the tax-free withdrawal of the shipment. The company picks up the beer in its own trucks and transports it to a dock where it is delivered to the ship and laden under customs supervision. At the time delivery is made, title to the beer is vested in the company which purchased the beer from the brewer.
The solicitation of orders for beer for use as ship's supplies, the transportation of such beer to the dock for delivery to the ship by a company other than the brewer and the transfer of the title to the beer to the company are permissible. Beer for this purpose may be removed from the brewery only pursuant to approved Form 1689 filed by the brewer and the beer must be transported direct to the dock for customs inspection and supervision of lading as required by Regulations 18.
While the transaction is considered that of the brewer and the requirements of Regulations 18 pertaining to the removal of beer free of tax for use as ship's supplies must be complied with by the brewer, the company soliciting orders for beer and making delivery thereof must possess a wholesaler's basic permit and must pay special tax as a retail or wholesale malt liquor dealer as may be required since it takes title to and sells the beer.
26 U.S.C. 3153 (Internal Revenue Code of 1939); 26 CFR 192.390 (27 CFR 252.21)