The U.S. military authorities took control of the Customs and Internal Revenue     departments of the government in Manila on August 20, 1898, just seven days after the surrender of Manila.  No immediate change was made in the existing stamp tax laws.  The existing Spanish Philippine Papel Sellado, Papel de Pagos al Estado, Giro stamps. Timbre Movil labeled SELLO, and Timbre Movil Especial bearing various overprints affixed by the U.S. Military Government, remained in use until the supply was exhausted.  No Papel Sellado, Papel de Pagos al Estado, and no Timbre Movil Especial were printed after the supply of Spanish-Philippine stamped paper and stamps of these classes was exhausted.

The first series of Giro Stamps printed by the U.S. Military Government appeared in January 1899.  There were several subsequent issues and these stamps continued to be the sole means of collecting the stamp tax on bills of exchange, letters of credit, warrants payable to order and promissory notes until they were replaced by Documentary Stamps on January 1, 1905.

Likewise, the subsequent Civil Government printed by the US Military Government and several series of Timbre Movil labeled SELLO or CLASS. These stamps were of the same denominations as the Spanish-Philippine stamps of this class, which they replaced.  The first issues appeared in 1899, and subsequent issues remained in use until at least as late as the end of December 1904.

To replace the Timbre Movil Especial of the 10 centimos, 5 centimos, 2 centimos and 1-centimo denominations, there was issued in 1899 a series of Internal Revenue Stamps of the same denominations.  These stamps remained in use until the end of 1904.

Certain features of the Spanish-Philippine system of internal taxation were considered very iniquitous by the early American officials of the Philippines, and they     almost immediately set about tearing down this system of taxation by reducing or abolishing, one after another, various existing taxes.  They did not, however, make immediate provision for new sources of revenue.  This fact, coupled with the additional fact that because of the war the prosperity of the people was at low ebb, resulted in a serious decline in revenues.  Mr. John S. Hord, Collector of Internal Revenue, wrote in 1907, that internal revenue collections shrank from a total of almost 12,000,000 pesos during the fiscal year of 1896-97 to less than 4,300,000 pesos during the fiscal year of 1902-03.  A deficit was threatened and it was evident that new sources of revenue must be provided.

These new sources of revenue were provided by Act. No. 1189 of the Philippine Commission, known as the Internal Revenue Law of 1904, which became effective on  August 1, 1904.  This Act repealed prior internal revenue laws, including the Spanish-Philippine internal revenue laws still in force at that time, and provided the Philippines with a new system of internal taxation.  With certain important modifications, the annual poll tax (personal cedula tax), the annual industrial tax (license taxes on occupations, professions, mercantile establishments and manufacturing industries), and the documentary stamps tax, which had been the principal sources of internal revenue during the Spanish regime, were retained. 

In addition, the new law provided a system of excise taxes similar to that which had been developed in the United States.  The new law also provided that merchants and    manufacturers should pay quarterly a “sales tax” of 1/3 of one percent of their gross sales, and that common carriers should pay quarterly a “percentage tax” of one percent of their gross receipts. Manufactured tobacco, distilled spirits and other goods subject to the special excise taxes were from the payment of the sales tax.

The idea, which had been developed during the Spanish regime, of using, an accountable paper of the State as a means of insuring an honest accounting by the tax-collecting officers of the revenue which they collected, was applied by the Internal Revenue law of 1904 to all internal taxes.  This Act provided that all internal taxes must be collected by the use of INTERNAL REVENUE STAMPS, DOCUMENTARY STAMPS or CEDULAS.  The Cedulas were the tax receipts issued for the payment of the personal cedula tax. Documentary stamps were used for the collection of the documentary stamp tax.  Internal Revenue stamps were used for the collection of all other internal taxes.

The Bureau of internal Revenue was charged with the collection of certain revenues in addition to those prescribed by the Internal Revenue Law of 1904. Among these, were the revenues of the slaughterhouses operated by the government at Manila and the revenues of the San Lazaro Estate in Manila.  It is doubtful that internal revenue stamps were used for the collection of these miscellaneous receipts. 

The Bureau of internal Revenue was also charged with the collection of the U.S. Internal Revenue tax on Philippine tobacco products exported to the United States and with the collection, for about two decades, of the municipal revenues of the City of Manila.  Since these latter two collections were not a part of the internal revenues of the Insular Government, they have not been included in the figures that follow.

The total internal revenues of the Insular Government of the Philippines for the    calendar year of 1913 was 18,073,966.26  pesos.  Of these, 12,624,680.92 pesos, or 70.2  percent of the total, were internal revenues collected by the use of revenue stamps; and 4,081,347.00 pesos or 22.6 percent of the total, were the revenues of the personal cedula tax collected by the use of cedulas.  Thus, in 1913, at least 92.8 percent of the internal revenues  were collected by the use of an accountable paper of the state.

Act No. 2339, known as the Internal Revenue Law of 1914, repealed those provisions of the Internal Revenue Law of 1904, which required the use of Internal Revenue stamps, but continued in force the requirement that Documentary stamps be used for the collection of documentary stamp taxes.  Since 1914, Documentary stamps have been the only revenue stamps whose use was prescribed by the Internal Revenue Law.