The first revenue stamps in the United States were used briefly during colonial times, among the most notable usage involved the Stamp Act. Long after independence, the first revenue stamps printed by the United States government were issued in the midst of the American Civil War, prompted by the urgent need to raise revenue to pay for the great costs it incurred. After the war ended however, revenue stamps and the taxes they represented still continued. Revenue stamps served to pay tax duties on items that came under two main categories, Proprietary and Documentary. Proprietary stamps paid tax duties on goods like alcohol and tobacco, and were also used for various services, while Documentary stamps paid duties on legal documents, mortgage deeds, stocks and a fair number of other legal dealings. Proprietary and Documentary stamps often bore these respective designations, while in several of the issues they shared the same designs, sometimes with minor variations. Beginning in 1862 the first revenue stamps were issued, and would continue to be used for another hundred years and more. For the first twelve years George Washington was the only subject featured on U.S. revenue stamps, when in 1875 an allegorical figure of Liberty finally appeared. Revenue stamps were printed in many varieties and denominations and are widely sought after by collectors and historians. Revenue stamps were finally discontinued on December 31, 1967.

History of revenue stamp usage

The first revenue stamps appeared in the years leading up to the American Revolution as a result of the 1765 Stamp Act, the taxes of which were not well received by the colonists of the day. These were the British colonial issues and required that many printed materials in the colonies be produced on specially prepared stamped paper produced in London which carried an embossed revenue stamp. Retrieved 15 December 2010

Civil War era, first issue In August 1862, while the American Civil War was being waged, the United States (Union) government began taxing a variety of goods, services and legal dealings. To confirm that taxes were paid a 'revenue stamp' was purchased and affixed to the taxable item.

The Commissioner of Internal Revenue took bids for the printing and production of the first U.S. revenue stamps in an effort to raise revenue for the great costs of the war.Smithsonian National Postal Museum, articleLinn's Stamp News article: Miller, 2014 The Department of Internal Revenue awarded Butler & Carpenter of Philadelphia the printing contract, paying it $19,080 to produce 106 printing plates, including the rolls, dies and all material necessary to maintain stamp production.Toppan, Deats & Holland, 1899, pp. 6–7 Butler & Carpenter soon began producing the first revenue stamps, which were issued for use beginning Oct. 1, 1862.Scotts U.S. Stamp Catalogue, 1982, p. 453

For reasons unknown the bill from Butler & Carpenter was not settled by the U.S. government until some years later, after Butler and Carpenter wrote and appealed numerous times to the commissioner of Internal Revenue, Hon. J.J. Lewis, about the matter. Because of the long wait involved one of the major points of contention was the appreciable amount of increase in cost of materials between when the agreement was made and when the bill was finally settled.

The new stamps were printed in several colors and depicted a portrait of George Washington on all thirty denominations from one cent to $200. The engraved image of Washington was modeled after a painting by Gilbert Stuart.McKinney, BSA Journal, 1962 The first issues were printed on hard brittle paper, but later ones were printed on soft woven paper of varying thicknesses. Colors were generally dull for stamps printed before 1868. The stamps were issued in sheets with 12 gauge perforations or 'imperforate', meaning solid sheets with no perforations. Washington remained the only figure on the dozens of varieties issued up until 1874.Scotts U.S. Stamp Catalogue, 1982, pp. 453–460

The new revenue stamps were used to pay tax on proprietary items such as playing cards, patent medicines and luxuries, and for various legal documents, stocks, transactions and legal services. The cancellation of these stamps was usually done in pen and ink, while hand stamped cancellations were seldom used. The end of the Civil War did not bring an end to revenue taxes, as the federal government still had $2.7 billion debt it had acquired. The government finally repealed the excise tax in 1883. Three distinct revenue stamp series were produced during the 21-year period.

Among the more notable instances of tax stamp usage occurred in the photography trade. As the Civil War progressed, the demand for photographs of family members, soldiers going off to war and returning war heroes increased dramatically, and the Federal government saw it as an opportunity to raise revenue to pay for the war. On August 1, 1864 the Internal Revenue department passed a 'photograph tax', which photographers had to pay on the sale of photographs. By 1864 there were no 'photography tax' stamps issued, so other stamps were substituted, typically, the proprietary or playing card revenue stamps was used. The stamps were usually affixed to the back of the photograph. Already burdened with high overhead costs and scarcity of materials because of the war, large photograph companies organized and petitioned Congress, complaining that they were shouldering too much of the tax burden. After exactly two years their constant efforts resulted in the tax being repealed on August 1, 1866.Baryla, 2010, Frame 1, p. 1 Several other widely used products, such as cotton, tobacco and alcohol, were also charged a proprietary tax, which generated appreciable revenues.Baryla, 2010, Frame 1, p. 2

First issue design types

The first series of revenue stamps have two distinctive design types with each stamp designating the tax 'duty'. Designs for denominations 1-cent through 20-cents were simple, bearing a portrait of George Washington, while stamps with denominations 25-cents through 1-dollar are larger and have a more elaborate design and also designate the tax duty in a lower banner. Stamps with denominations of $1.30 were used to pay the tax duty for foreign exchange only, $1.50 for Inland exchange only while the stamps with denominations of $1.60 and $1.90 were for Foreign exchange only and oddly bear no duty designations in the stamp design. Denominations of 2-dollars through 10-dollars have tax duties designated in the lower circular banner surrounding Washington's portrait. Denominations of 15-dollars through 50-dollars have tax duties designated in the right side of the circular banner surrounding the portrait. The design used for the 1-cent denomination is unique and is not used for any other denomination.Scotts U.S. Stamp Catalogue, 1982, pp. 453, 457–459

Various tax duties were only served by certain revenue stamps as some duties were only found on lower or higher denomination revenue stamps as the case may be. For example, revenue stamps with a designation for Playing cards occur only on denominations of 2, 3, 4, 5 and 6 cents, while the 25-cent denomination revenue stamp is the only one whose designation specifies Bond. A specialized stamp catalog is needed to see the different occurrences of tax-designation to denomination combinations.Scotts U.S. Stamp Catalogue, 1982, pp. 457–459

Second issue

The second issue of revenue stamps were Documentary stamps and issued in 1871. After the Internal Revenue received many reports of the fraudulent re-use of revenue stamps, typically with cancellation ink washed or otherwise removed from the face of the stamp,Scotts U.S. Stamp Catalogue, 1982, pp. 458–460 a letter of May 31, 1867 from government officials in Wall Street was sent to Internal Revenue commissioner E.A. Rollins expressing the concern that "The U.S. government loses thousands of dollars daily by stamps being used a second time." The ordinary stamps in use at this time did not receive the cancellation ink very well, unless it was heavily applied.Toppan, Deats & Holland, 1899, pp. 8, 15–16 The letter advised that all stamps be printed in a pale yellow color. This particular suggestion however was not taken up by Butler & Carpenter, but instead, after a period of experimentation, they responded to the problem by producing stamps of a lighter shade and on a paper that more readily absorbed cancellation ink. The Internal revenue was frequently sending stamps suspected of having cancellation ink washed to the engravers and printers for inspection to determine if they had been tampered with.Toppan, Deats & Holland, 1899, p. 65

The new paper was finally employed in stamp production in early 1869 and by 1871 a second series of stamps was issued, printed on a special patented "chameleon" paper containing silk fibers which can be seen in the paper with the naked eye. Still produced by Butler & Carpenter of Philadelphia, the entire second series, with the exception of the 200-dollar issue, were printed in the same bi-color combination, with the portrait of Washington printed in black and with the frame work in blue with various ornate and elaborate designs, popular during that period.

"Persian rug" stamps

The highest values in the second issue of revenue stamps are 200-dollar (left) and the 500-dollar (right) stamps and are commonly referred to by collectors as the Small and Large Persian rug revenue stamps respectively, which are considered by many to be among the most colorful and elaborately engraved stamps in all of philately. Both the 200 and 500-dollar stamps were printed in very limited quantities. The 200-dollar small Persian Rug had a printing of 446 copies, with approximately 125 known surviving examples. The stamps were printed one to a 'sheet', with margins on all four sides with inscriptions on the two side margins. The only surviving full sheet of the small Persian rug, was used to pay tax duties on the will of Erastus Corning, Sr. in 1872. The 500-dollar large Persian rug is indeed larger, measuring by 4 inches with only 204 stamps of this denomination ever issued. Because of their relatively large sizes and the subsequent large number of perforations on each stamp, and the fact that they were used on documents which were typically folded across the stamps, most examples exist with some sort of flaw(s) about the stamp paper. Printed by the Carpenter Printing company of Philadelphia, a 5,000-dollar design was also proposed and a trial color essay was printed, but it was never issued for revenue use so there only exists a die proof.Siegel Auction Galleries, NYSwain, essay, 2012

Alcohol revenue stamps

Taxes were commonly levied on alcohol and tobacco products and a variety of such stamps were printed for this purpose. Typically, the stamp would be affixed to a given product when the taxes were paid in such a way as to seal a given container, where upon opening, the stamp would be damaged. For example, revenue stamps for beer tax were issued to brewers in sheet form, where an individual stamp was cut from it and used as a seal over the opening in a barrel of beer. To access the beer the stamp would have to be punctured, thus prohibiting its reuse.

Third issue