Rev. Ruling 56-534

Wholesale Liquor Dealer

Under section 5144 of the Internal Revenue Code of 1954 and section 194.60 of the Regulations relating to Liquor Dealers, (with certain specified exceptions) special (occupational) tax must be paid to cover each place of business where alcoholic beverages are sold or offered for sale. A wholesaler's basic permit is issued, pursuant to the Federal Alcohol Administration Act, authorizing the person named therein to engage in the business of purchasing for resale at wholesale alcoholic beverages at the location stated on the permit. Questions have recently been presented with respect to special tax and basic permit requirements where a direct telephone line connects a wholesaler's business establishment or place of storage with his home, and where the wholesaler has an extension phone in his home. Held, a wholesale dealer need not obtain a separate basic permit and special tax stamp to cover his residence merely because he has a direct telephone line between his wholesale premises or place of storage and his home or because of having an extension of his business or warehouse telephone in his home. However, if either the direct line or the extension phone is used for the purpose of accepting orders or otherwise engaging in the business of selling alcoholic beverages at his home, a permit and a special tax stamp would be required to cover these activities at his home. Each case must be considered in the light of all relevant facts and circumstances in order to determine whether the wholesaler is engaged in business on the home premises.

26 U.S.C. 5144; 27 CFR 194.60 (27 CFR 194.51)