This method of using  the  Internal  Revenue  stamps was applied to the licenses (privilege tax receipts) of merchants, manufacturers and other persons subject to percentage and occupational taxes on January, 1919, with the requirement,  however, that the taxpayers must still surrender his privilege tax receipt at the end of the year. Since February 20, 1926, all privilege tax receipts have remained permanently in the possession of the taxpayer. The holder of a privilege tax receipt presents at the end of each quarter to the office of the municipal treasurer, the amount of the tax due is entered on the coupon provided there for by a clerk who, after affixing stamps to the amount of his tax, separates the coupon from the privilege tax receipt and returns the latter to the taxpayer. One half of each stamp is affixed to the coupon and the  other  half  to   the  privilege  tax  receipt.

This method of  using Internal  Revenue stamps  has been extended to the  tax receipts covering  the  payment of many other  internal revenue taxes,  with the result that,   since about the end of 1933,   in all cases where Internal Revenue stamps are used,   the  stamps  are so  affixed that one half of each stamp remains on the coupon or stub which  is retained by the collecting office while the other half is attached to  the receipt which  is given to  the   taxpayer,   With one exception,  all of these tax receipts are now permitted to remain permanently in the possession of the  tax payer.    This means  that since about the end of  1933  all Internal Revenue stamps have been split into  two  halves when used.

From 1905 until March 14,   1916,   the  Internal Revenue  stamps were so affixed to  the official  Invoices of  the manufacturer  of  distilled spirits  that,  when the   invoice was  separated from its stub,  the  stamps were split  into   two halves,  one half remaining  attached to   the  stub.  Effective on March 15,  1916,  a new form of official  invoice was  provided which required the affixture of entire  stamps   to   the right side of  the invoice.    This procedure was followed until about  the end of  1933, when the use of split stamps  on these invoices was again adopted.    The official  invoices have always been eventually surrendered to the Bureau of Internal Revenue.

It is to be noted  that in all cases where entire stamps have affixed to any form of  tax receipt  the taxpayer has been required to surrender his  tax receipt  to  the  local agent of  the  Bureau of  Internal Revenue, who in turn was required to forward the tax receipt to the General Office of  the  Bureau of   Internal Revenue  in Manila for  audit and file,  Hence,   the only source of  entire used Internal Revenue stamps has,  since January  1, 1905, been the  receipts and official  invoices filed in the General Office of   the Internal Revenue  in Manila. In order  to provide storage space for  the more recent  of these tax receipts and official  invoices,   it  has long  been  the practice to  destroy, at interval of  about five years,   the oldest of   the records still on hand. And it  is evidently been the  practice of  some of  the clerks in direct charge of  the destruction of  the old  tax receipts and official invoices  to remove some of   the stamps  before destroying  the documents.    The entire used stamps thus  removed have eventually found their way into  the hands of  stamp dealers and collectors.   The quantity of entire used Internal Revenue  stamps   thus preserved,  particularly of  the issues prior   to 1917,  has,  however,  been quite small.

From 1905 until June 1911, all documents to which  Internal Revenue stamps  were  affixed, whether  these stamp were entire stamps or  "split”  were surrendered  by the taxpayers to  the  Bureau   of  Internal Revenue and after being  audited were   filed  in the General Office of  the  Bureau of Internal Revenue  in Manila.    Hence,  prior   to June  1911,   the only possible source of  the  split  Internal  Revenue stamps was  the  records filed in the General  Office of   the Bureau of  Internal Revenue    Apparently the clerks who removed and preserved some of   the entire stamps  prior  to  the destruction of these records did not consider  the split stamps   to  be worthy of preservation.   It is  therefore very doubtful  that any split specimens of the issue of 1905 have been preserved. At any rate the writer has not seen any.

The practice of permitting   the  taxpayer  to  retain permanent possession of tax receipts which bear one half of each Internal  Revenue  stamp affixed thereto  was begun, at least in the case of Franchise Receipts,   in June 1911. The other half of each stamp was,  of course affixed  to  the stub which was retained by the Bureau of Internal Revenue. Hence,   since June  1911,   the  tax receipts which have remained in the hands of the   taxpayers have been a source  of   the split stamps.    Fortunately for the stamp collector,   several  different  forms  of   tax receipts have been used, the stub in some  cases being attached  to  the  left  and  in other cases  to  the  right  side of the tax receipt.  As a result,    both right and left halves of   the stamps  are obtainable  from these  tax receipts. Furthermore, whenever   there was not sufficient  space for all  of   the stamps on the  face of   the receipt,  the excess  stamps were affixed to the back of   the receipt.     Hence,   if  the  face of   the receipt yielded right halves,   the back of  the  receipt would yield left halves.    But the stamps affixed  to  the  back  of   the  receipt were  almost invariably the lowest denominations. This fact,   coupled with the additional  fact that the  lower denominations were more frequently used than the higher denominations, makes it much easier to obtain both right and left halves of the lower denominations that it is to obtain both halves of higher  denominations. It is  exceedingly difficult,  if not impossible,  to obtain both right  and left halves of  a few of  the highest denominations. Furthermore,  a few of  the highest denominations  exist used only split  form,  It is   to  be noted that, while the collector may obtain both right and  left halves of  a split  stamp,   the  control number of  the  left half will  differ  from  the  control  number  on  the  right half.  This  is due  to  the  fact  that one  half of each stamp used is retained by the Bureau of Internal Revenue.

The procedure originally established by Mr. Hord  in 1905 required the taxpayer  to purchase the  Internal Revenue stamps and to affix the stamps  to  the  tax receipt or Official   Invoice himself.  Since January 1,  1919,  the only case in which  this procedure is still followed has been the Official   Invoices covering  each removal of distilled spirits and of fermented liquors from the place of manufacture for domestic consumption. In all other cases, the taxpayer delivers either cash or a check for the amount of his tax to the municipal treasurer, or his representative who prepares the tax receipt and affixes the stamps thereto.