Rev. Ruling 57-149

Special Tax

Section 5123(c) of the Internal Revenue Code of 1954 provides that special tax as a wholesale dealer in liquors or wholesale dealer in beer shall not apply to a retail dealer in liquors or to a retail dealer in beer because of such retail dealer selling out his entire stock of liquors in one parcel, or in parcels embracing not less than his entire stock of distilled spirits, of wines, or of beer. Section 194.193 of the Regulations relating to Liquor Dealers provides that a retail dealer in liquors may, without incurring special tax as a wholesale dealer in liquors, sell out his entire stock of alcoholic liquors in one parcel or in a number of parcels composing his entire stock, which parcels may contain distilled spirits, wine, or beer, or a combination of any or all such liquors. Held, a retail liquor dealer who sells his entire stock of distilled spirits only in parcels of five gallons or more, but continues to sell beer and wine at the same location under his special tax stamp as a retail liquor dealer, incurs liability as a wholesale liquor dealer. However, a retail dealer selling distilled spirits, wine, and beer, who discontinues the business of selling distilled spirits and wine and disposes of his entire stock of distilled spirits and wine only, in quantities of five gallons or more to the same person at the same time, would not become liable for special tax as a wholesale dealer in liquors merely because he failed to dispose of his stock of beer at the time he disposed of his distilled spirits and wine.

26 U.S.C. 5123; 27 CFR 194.193 (27 CFR 194.192)