Rev. Rul. 54-609

The stamp taxes imposed by the State of South Carolina, Code of Laws of South Carolina (1952) title 65, chapter 14, article 2, sections 65-1265 and 65-1266 and chapter 10, articles 3, 4 and 5, on alcoholic beverages, tobacco, beer and soft drinks are allowable deductions under the provisions of section 23(c)(1) of the Internal Revenue Code of 1939 only in the returns of the manufacturer, wholesaler, or retailer on whom they are imposed and by whom they are paid. Such taxes do not qualify as retail sales taxes within the meaning of section 23(c)(3) of the Code and are not deductible for Federal income tax purposes by consumers who purchase those articles with the stamps already affixed and cancelled. Any additional amount which a purchaser pays for any of the above-mentioned products because of the stamp affixed thereon represents an additional cost of the product purchased.