Rev. Rul. 56-328

The privilege tax imposed by the City of Memphis, Tennessee, Ordinance 378, on the retail purchase of cigarettes, effective on and after July 1, 1955, is a levy on the consumer and is deductible under section 164(a) of the Internal Revenue Code of 1954 by the consumer in computing taxable income, except that in the case of an individual who elects the standard deduction as provided by section 144 of the Code (or uses the tax table), the tax is not deductible unless attributable to a trade or business carried on by him. In the latter event, the tax is deductible from gross income in computing adjusted gross income.