74 TH C ONGRESS. SESS . II. CH. 690. JUNE 22, 1936 .
1135 deduction of the amount of such Federal excise tax which was paid or of the amount of reimbursement to purchasers with respect to such Federal excise tax) shall be divided by the total quantity of such articles sold during the taxable year and the quotient shall be multiplied by the quantity of such articles involved in the sales specified in subsection (a) (1) . Such quantities shall be expressed in terms of the unit on the basis of which the Federal excise tax was imposed . For the
of this section the
appo rtionmen t and a lloca- Determination of ap- pu rpo ses
proper
portioument and allo- tion of deductions with respect to gross income shall be determined cati on of dedu ction s . under rules and regulations prescribed by the Commissioner with the approval of the Secretary . (d) The net income from reimbursement or refunds specified in Net, income from re- imbursement or re- subsection (a) (2) or (3) shall be computed as follows : From the funds ; computation . to tal paym ent or accrual (1) of reimburs ement t o the ta xpayer from vendors for amounts representing Federal excise tax burdens included in prices paid by the taxpayer to such vendors or (2) of refunds or credit s to the taxpayer of Feder al excise taxes erroneous ly or illegally collected, there shall be deducted the expenses and fees reasonably in curred i n obtai ning suc h reimb ursement or ref unds . (e) For the purposes of subsection (a) (1), (2), and (3), the extent E"tent of shifting of to which the taxpayer shifted to others the brden of a Feeral excise taC ompn 'ti on t ta x shall be pres umed to be an a mount co mputed as follo ws (1) From the selling price of the articles there shall be deducted the sum of (A) the cost of such articles plus (B) the average margin with respect to the quantity involved ; or (2) If the taxpayer so elects by filing his return on such basis, from the aggregate selling price of all articles with respect to which such Federal excise tax was imposed and which were sold by him during the taxable year (computed without deduction of reimburse- ment to purchasers with respect to such Federal excise tax) there shall be deducted the aggregate cost of such articles, and the differ- ence shall be reduced to a margin per unit in terms of the basis on which the Federal excise tax was imposed . The excess of such mar in per unit over the average margin (computed for the same nnit) shall be multiplied by the number of such units represented by the articles with respect to which the computation is being made ; but (3) In no case shall the extent to which the taxpayer shifted to t D ne~btiuraea extent others the burden of the Federal excise tax with respect to the cise tax was shifted . articles be deemed to exceed the amount of such tax with respect to such articles minus (A) the portion of the amount of the Federal excise tax (or o f the reimbursement speci fied in subsection (a) (2) ) with respect to the articles which is paid or credited by the tax- payer to any purchasers as specified in subsection (f) (3) and minus (B) the amount of any increase in the tax under section 602 vof.47, p. 281. of the Revenue Act of 1932 for which the taxpayer under this section became liable as the result of the nonpayment or refund of the Federal excise tax with respect to the articles . (f) As used in this section-
Definitions . (1) The term "margin" means the difference between the selling "Marg in. " price of articles and the cost thereof, and the term "average "Av era ge margin ." margin" means the average difference between the selling price and the cost of similar articles sold by the taxpayer during his six taxa ble y ears prec edin g the ini tial impo sitio n of the Fede ral e xcis e tax in question, except that if during any part of such six-year period the taxpayer was not in business, or if his records for any part of such period are so inadequate as not to furnish satisfactory data, the average margin of the taxpayer for such part of such
