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74 TH CONGRESS . SESS, II. C H. 690. JUNE 22, 1936. Quantity. (7) The quantity of each article derived from the commodity processed may be either (a) the actual quantity obtained, as shown by the records of the claimant, or (b) an estimated quantity c omput ed b y mu ltipl ying the quan tity of c ommo dity proc esse d by appropriate conversion factors giving the quantity of articles customarily obtained from the processing of each unit of the commodity. str "Tax period" con- (c) The "tax period" shall mean the period with respect to which the claim ant actua lly paid the proce ssin g tax to a col lect or of int er- nal revenue and shall end on the date with respect to which the "Period before and last payment was made . The "period before and after the tax" after the taa"' shall mean the twen ty-four months (excep t that in the case of tobacco it shall be the twelve months) immediately preceding the effective date of the processing tax, and the six months, February to Determining prices July, 1936, inclusive . If during any part of such period the claimant for part of period . was not in business, or if his records for any part of such period are so inadequate as not to provide satisfactory data on prices paid for commodities purchased or prices received for articles sold, the average prices paid or received by representative concerns engaged in a similar business and similarly circumstanced may with the approval of the Com missioner, where nece ssary for a fair com- Av era ge margin. parison, be substituted in making the necessary computations . If the claimant was not in business during the entire period before and after the tax, the average margin, during such period, of repre- sentative concerns engaged in a similar business and similarly circumstanced, as determined by the Commissioner, shall be used as his average margin for such period . Purchase or sa le
(d) If the claimant made any purchase or sale otherwise than other than through an arm's-length transac- through an arm's-length transaction, and at a price other than the tion, etc . fair market price, the Commissioner may determine the purchase or sale price to be that for which such purchases or sales were at that time made in the ordinary course of trade . Rebuttalofpresump- (e) Either the claimant or the Commissioner may rebut the pre- tion . sumption established by subsection (a) of this section by proof of the actual extent to which the claimant shifted to others the burden of the process ing tax . Such proof may include, but shall not be limited to-- Proof permitted . (1) Proof that the difference or lack of difference between the average margin for the tax period and the average margin for the period before and after the tax was due to changes in factors other than the tax . Such factors shall include any clearly shown change (A) in the type or grade of article or commodity, or (B) in costs of production . If the claimant asserts that the burden of the tax was borne by him and the burden of any other increased costs was shifted to others, the . Commissioner shall determine, from the effective dates of the imposition or termination of the tax and the effective date of other changes in costs as compared with the date of the changes in margin (when margins are com- puted for weeks, months, or other intervals between July 1, 1931, and August, 1936, in the manner specified in subsection (b) ), and from the general experience of the industry, whether the tax or the increase in other costs was shifted to others . If the Commis- sioner determines that the difference in average margin was due in part to the tax and in part to the increase in other costs, he shall apportion the change in margin between them ; (2) Proof that the claimant modified existing contracts of sale, or adopted a new form of contract of sale, to refl ect the initiation, termination, or change in amount of the processing tax, or at any such time changed the sal e price of the article (i ncluding the effect
