Marijuana Act of 1937 part 2

SEC. 11. The order forms and copies thereof and the prescriptions and records required to be preserved under the provisions of section 6, and the statements or returns filed in the office of the collector of the district under the provisions of section 10 (b) shall be open to inspection by officers, agents, and employees of the Treasury Department duly authorized for that purpose, and such officers of any State, or Territory, or of any political subdivision thereof, or the District of Columbia, or of any insular possession of the United States as shall be charged with the enforcement of any law or municipal ordinance regulating the production, sale, prescribing, dispensing, dealing in, or distributing of marihuana. Each collector shall be authorized to furnish, upon written request, copies of any of the said statements or returns filed in his office to any of such officials of any State or Territory, or political subdivision thereof, or the District of Columbia, or any insular possession of the United States as shall be entitled to inspect the said statements or returns filed in the office of the.said collector, upon the payment of a fee of $1 for each 100 words or fraction thereof in the copy or copies so requested.

SEC. 12. Any person who is convicted of a violation of any provision of this Act shall be fined not more than $2,000 or imprisoned not more than five years, or both, in the discretion of the court.

SEC. 13. It shall not be necessary to negative any exemptions set forth in this Act in any complaint, information, indictment, or other writ or proceeding laid or brought under this Act and the burden of proof of any such exemption shall be upon the defendant. In the absence of the production of evidence by the defendant that he has complied with the provisions of section 6 relating to order forms, he shall be presumed not to have complied with such provisions of such sections, as the case may be.

SEC. 14. The Secretary is authorized to make, prescribe, and publish all necessary rules and regulations for carrying out the provisions of this Act and to confer or impose any of the rights, privileges, powers, and duties conferred or imposed upon him by this Act upon such officers or employees of the Treasury Department as he shall designate or appoint.

SEC. 15. The provisions of this Act shall apply to the several States, the District of Columbia, the Territory of Alaska, the Territory of Hawaii, and the insular possessions of the United States, except the Philippine Islands. In Puerto Rico the administration of this Act, the collection of the special taxes and transfer taxes, and the issuance of the order forms provided for in section 6 shall be performed by the appropriate internal revenue officers of that government, and all revenues collected under this Act in Puerto Rico shall accrue intact to the general government thereof. The President is hereby authorized and directed to issue such Executive orders as will carry into effect in the Virgin Islands the intent and purpose of this Act by providing for the registration with appropriate officers and the imposition of the special and transfer taxes upon all persons in the Virgin Islands who import, manufacture, produce, compound, sell, deal in, dispense, prescribe, administer, or give away marihuana.

SEC. 16. If any provision of this Act or the application thereof to any person or circumstances is held invalid, the remainder of the Act and the application of such provision to other persons or circumstances shall not be affected thereby.

SEC. 17. This Act shall take effect on the first day of the second month during which it is enacted.

SEC. 18. This Act may be cited as the "Marihuana Tax Act of 1937."

(T. D. 28)

Order of the Secretary of the Treasury Relating to the Enforcement of the Marihuana Tax Act of 1937

September 1, 1937

Section 14 of the Marihuana Tax Act of 1937 (act of Congress approved August 2, 1937, Public, No. 238), provides as follows:

The Secretary is authorized to make, prescribe, and publish all necessary rules and regulations for carrying out the provisions of this Act and to confer or impose any of the rights, privileges, powers, and duties conferred or imposed upon him by this Act upon such officers or employees of the Treasury Department as he shall designate or appoint.

In pursuance of the authority thus conferred upon the Secretary of the Treasury, it is hereby ordered:

1. Rights, Privileges, Powers, and Duties Conferred and imposed Upon the Commissioner of Narcotics

1. There are hereby conferred and imposed upon the Commissioner of Narcotics, subject to the general supervision and direction of the Secretary of the Treasury, all the rights, privileges, powers, and duties conferred or imposed upon said Secretary by the Marihuana Tax Act of 1937, so far as such rights privileges, powers, and duties relate to:

(a) Prescribing regulations, with the approval of the Secretary, as to the manner in which the right of public officers to exemption from registration and payment of special tax may be evidenced, in accordance with section 3 (b) of the act.

(b) Prescribing the form of written order required by section 6 (a) of the act, said form to be prepared and issued in blank by the Commissioner of Internal Revenue as hereinafter provided.

(c) Prescribing regulations, with the approval of the Secretary, giving effect to the exceptions, specified in subsection (b), from the operation of subsection (a) of section 6 of the act.

(d) The destruction of marihuana confiscated by and forfeited to the United States, or delivery of such marihuana to any department, bureau, or other agency of the United States Government, and prescribing regulations, with the approval of the Secretary, governing the manner of application for, and delivery of such marihuana.

(e) Prescribing rules and regulations, with the approval of the Secretary, as to books and records to be kept, and statements and information returns to be rendered under oath, as required by section 10 (a) of the act.

(f) The compromise of any criminal liability (except as relates to delinquency in registration and delinquency in payment of tax) arising under the act, in accordance with section 3229 of the Revised Statutes of the United States (U. S. Code (1934 ed.) title 26, sec. 1661), and the recommendation for assessment of civil liability for internal- revenue taxes and ad valorem penalties under the act.

II. Rights, Privileges, Powers, and Duties Conferred and Imposed upon the Commissioner of Internal Revenue

1. There are hereby conferred and imposed upon the Commissioner of Internal Revenue, subject to the general supervision and direction of the Secretary of the Treasury, the rights, privileges, powers, and duties conferred or imposed upon said Secretary of the Marihuana Tax Act of 1937, not otherwise assigned herein, so far as such rights, privileges, powers, and duties relate toÙ

(a) Preparation and issuance in blank to collectors of internal revenue of the written orders, in the form prescribed by the Commissioner of Narcotics, required by section 6 (a) of the act. The price of the order form, as sold by the collector under section 6 (c) of the act shall be two cents for the original and one copy.

(b) Providing appropriate stamps to represent payment of transfer tax levied by section 7, and prescribing and providing appropriate stamps for issuance of special tax payers registering under section 2 of the act.

(c) The compromise of any civil liability involving delinquency in registration, delinquency in payment of tax, and ad valorem penalties, and of any criminal liability incurred through delinquency in registration and delinquency in payment of tax, in connection with the act and in accordance with Section 3229 of the Revised Statutes of the United States (U. S. Code (1934 ed.), title 26, sec. 1661)- the determination of liability for and the assessment and collection of special and transfer taxes imposed by the act; the determination of liability for and the assessment and collection of the ad valorem penalties imposed by Section 3176 of the Revised Statutes, as modified by Section 406 of the Revenue Act of 1935 (U. S. Code (1934 ed.) title 26, secs. 1512-1525), for delinquency in registration; and the determination of liability for and the assertion of the specific penalty imposed by the act, for delinquency in registration and payment of tax.

General Provisions

The investigation and the detection, and presentation to prosecuting officers of evidence, of violations of the Marihuana Tax Act of 1937, shall be the duty of the Commissioner of Narcotics and the assistants, agents, inspectors, or employees under his direction. Except as specifically inconsistent with the terms of said act and of this order, the Commissioner of Narcotics and the Commissioner of Internal Revenue and the assistants, agents, inspectors, or employees of the Bureau of Narcotics and the Bureau of Internal Revenue, respectively, shall have the same powers and duties in safeguarding the revenue thereunder as they now have with respect to the enforcement of, and collection of the revenue under, the act of December 17, 1914, as amended (U. S. Code (1934 ed.), title 26, sec. 1049).

In any case where a general offer is made in compromise of civil and criminal liability ordinarily compromisable hereunder by the Commissioner of Internal Revenue and of criminal liability ordinarily compromisable hereunder by the Commissioner of Narcotics, the case may be jointly compromisable by those officers, in accordance with Section 3229 of the Revised Statutes of the United States (U. S. Code (1934 ed.), title 26, sec. 1661).

Power is hereby conferred upon the Commissioner of Narcotics to prescribe such regulations as he may deem necessary for the execution of the functions imposed upon him or upon the officers or employees of the Bureau of Narcotics, but all regulations and changes in regulations shall be subject to the approval of the Secretary of the Treasury. The Commissioner of Internal Revenue and the Commissioner of Narcotics may, if they are of the opinion that the good of the service will be promoted thereby, prescribe regulations relating to internal revenue taxes where no violation of the Marihuana Tax Act of 1937 is involved, jointly, subject to the approval of the Secretary of the Treasury.

The right to amend or supplement this order or any provision thereof from time to time, or to revoke this order or any provision thereof at any time, is hereby reserved.

The effective date of this order shall be October 1, 1937, which is the effective date of the Marihuana Tax Act of 1937.

STEPHEN B. GIBBONS, Acting Secretary of the Treasury.
REGULATIONS
The Marihuana Tax Act of 1937, imposes special (occupational) taxes upon persons engaging in activities involving articles or material within the definition of "marihuana" contained in the act, and also taxes the transfer of such articles or material. These regulations deal with details as to tax computation, procedure, the forms of records and returns, and similar matters. These matters in some degree are controlled by certain sections of the United States Revised Statutes and other statutes of general application. Provisions of these statutes, as well as of the Marihuana Tax Act of 1937 are quoted, in whole or in part, as the immediate or general basis for the regulatory provisions set forth. The quoted provisions are from the Marihuana Tax Act of 1937 unless otherwise indicated.

Provisions of the statutes upon which the various articles of the regulations are based generally have not been repeated in the articles. Therefore, the statutory excerpts preceding the several articles should be examined to obtain complete information.

Chapter I

Laws Applicable

SEC. 7 (e) All provisions of law (including penalties) applicable in respect of the taxes imposed by the Act of December 17, 1914 (38 Stat. 785; U. S. C., 1934 ed., title 26, secs. 1040- 1061, 1383-1391), as amended, shall, insofar as not inconsistent with this Act, be applicable in respect of the taxes imposed by this Act.

ART. 1. Statutes applicable. All general provisions of the internal revenue laws, not inconsistent with the Marihuana Tax Act, are applicable in the enforcement of the latter.

Chapter II

Definitions

SEC. 1. That when used in this Act:

(a) The term "person" means an individual, a partnership, trust, association, company, or corporation and includes an officer or employee of a trust, association, company, or corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform . any act in respect of which any violation of this Act occurs.

(b) The term "marihuana" means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds, or resins; but shall not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

(c) The term "producer" means any person who ( 1 ) plants, cultivates, or in any way facilitates the natural growth of marihuana; or (2) harvests and transfers or makes use of marihuana.

(d) The term "Secretary" means the Secretary of the Treasury and the term "collector" means collector of internal revenue.

(e) The term "transfer" or "transferred" means any type of disposition resulting in a change of possession but shall not include a transfer to a common carrier for the purpose of transporting marihuana

ART. 2. As used in these regulations:

(a) The term "act" or "this act" shall mean the Marihuana Tax Act of 1937, unless otherwise indicated.

(b) The term "United States" shall include the several States, the District of Columbia, the Territory of Alaska, the Territory of Hawaii, and the insular possessions of the United States except Puerto Rico and the Virgin Islands. It does not include the Canal Zone or the Philippine Islands.

(c) The terms "manufacturer" and "compounder" shall include any person who subjects marihuana to any process of separation, extraction, mixing, compounding, or other manufacturing operation. They shall not include one who merely gathers and destroys the plant, one who merely threshes out the seeds on the premises where produced, or one who in the conduct of a legitimate business merely subjects seeds to a cleaning process.

(d) The term "producer" means any person who induces in any way the growth of marihuana, and any person who harvests it, either in a cultivated or wild state, from his own or any other land, and transfers or makes use of it, including one who subjects the marihuana which he harvests to any processes rendering him liable also as a manufacturer or compounder. Generally all persons are included who gather marihuana for any purpose other than to destroy it. The term does not include one who merely plows under or otherwise destroys marihuana with or without harvesting. It does not include one who grows marihuana for use in his own laboratory for the purpose of research, instruction, or analysis and who does not use it for any other purpose or transfer it.

(e) The term "special tax" is used to include any of the taxes, pertaining to the several occupations or activities covered by the act, imposed upon persons who import, manufacture, produce, compound, sell, deal in, dispense, prescribe, administer, or give away marihuana.

(f ) The term "person" occurring in these regulations is used to include individual, partnership, trust, association, company, or corporation; also a hospital, college of pharmacy, medical or dental clinic, sanatorium, or other institution or entity.

(g) Words importing the singular may include the plural; words importing the masculine gender may be applied to the feminine or the neuter.
The definitions contained herein shall not be deemed exclusive.

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