Cruz Tax 2 Digests (Local Taxation)

LOCAL%TAXATION%%

POWER&TO&CREATE&SOURCES&OF&REVENUE:&

MACTAN&CEBU&INTERNATIONAL&AIRPORT&VS&MARCOS&

FACTS:%

- Petitioner%MCIAA%was%created%by%virtue%of%RA%6958,%mandated%to%principally%undertake%the%economical,%efficient%and%effective%control,%management%and%supervision%of%the%Mactan%International%Airport%in%the%Province%of%Cebu%and%the%Lahug%Airport%in%Cebu%City%

- Petitioner%MCIAA%enjoyed%the%privilege%of%exemption%from%payment%of%realty%taxes%in%accordance%with%Sec.%14%of%its%Charter%

- On%Oct.%11,%1994%Mr.%Cesa,%OIC%of%the%Office%of%the%Treasurer%of%the%City%of%Cebu,%demanded%payment%for%the%realty%taxes%on%several%of%its%land%belonging%to%petitioner.%%

- Petitioner%objected%to%such%demand%for%payment,%claiming%in%its%favor%Sec.%14%of%RA%6958%which%exempts%it%from%payment%of%realty%taxes.%

- Respondent%city%refused%to%cancel%and%set%aside%petitioners%RPT%account,%insisting%that%MCIAA%is%a%GOCC%whose%tax%exemption%privilege%has%been%withdrawn%by%virtue%of%Secs%193%and%234%of%the%LGC%that%took%effect%on%January%1,%1992.%

ISSUE:%

WON%Cebu%City%had%the%authority%to%impose%realty%taxes%upon%petitioner%

%

HELD:%

YES.%%

The%power%to%tax%is%primarily%vested%with%the%Congress,%however,%it%may%exercised%by%local%legislative%bodies%pursuant%to%direct%authority%conferred%by%Section%5,%Article%X%of%the%Constitution%[exercise%of%the%power%may%be%subject%to%such%guidelines%and%limitations%as%the%Congress].%The%LGC%enacted%pursuant%to%Section%3,%Article%X%of%the%Constitution%provides%for%the%exercise%by%LGUs%of%their%power%to%tax.%%

The%last%paragraph%of%Section%234%of%the%LGC%unequivocally%withdrew,%upon%the%effectivity%of%the%LGC,%exemptions%from%payment%of%RPT%granted%to%natural%or%juridical%persons,%including%GOCCs,%and%the%petitioner%is,%undoubtedly,%a%GOCC,%it%necessarily%follows%that%its%exemption%from%such%tax%granted%it%in%Section%14%of%its%Charter,%RA%6958,%has%been%withdrawn.%%

%

% LOCAL&TAXING&AUTHORITY&

COCA&COLA&BOTTLERS&VS&CITY&OF&MANILA&[I&REALLY&DONT&KNOW&WHY&THIS&CASE&IS&UNDER&THIS&TOPIC]&

JOHN ROBERT SAM JUAN








FACTS:%

- Petitioner%Coca%Cola%maintains%a%sales%office%in%the%City%of%Manila%- On%February%25,%2000,%the%City%Mayor%of%Manila%approved%Tax%Ordinance%No.%7988%repealing%Tax%

Ordinance%No.%7794.%The%amended%sections%increased%the%tax%rates%applicable%to%certain%establishments%operating%within%the%territorial%jurisdiction%of%the%City%of%Manila,%including%herein%petitioner.%%

- Petitioner%filed%a%petition%before%the%DOJ%against%the%City%of%Manila%and%its%Sangguniang%Panlungsod,%questioning%the%legality%or%constitutionality%of%Section%21%of%Tax%Ordinance%No.%7988.%%

- DOJ%declared%the%said%Tax%Ordinance%7988%as%null%and%void,%however,%respondents%still%continued%to%assess%petitioner%business%tax%for%the%year%2001%based%on%the%tax%rates%prescribed%by%it.%%

- Petitioner%filed%a%complaint%with%RTC%Mania,%and%while%the%case%was%pending%City%of%Manila%enacted%Tax%Ordinance%8011%amending%certain%Sections%of%Tax%Ordinance%7988.%[It%should%be%noted%that%even%the%RTC%found%that%Tax%Ordinance%was%null%and%void].%

- Petitioner%again%questioned%the%legality%of%Tax%Ordinance%8011%before%the%DOJ%and%again%DOJ%declared%Tax%Ordinance%8011%as%null%and%void,%however%RTC%of%Manila%granted%the%MR%of%City%of%Manila%when%petitioner%questioned%its%legality%before%it.%%

ISSUE:%

WON%%respondent%may%validly%amend%Tax%Ordinance%7988%

%

HELD:%

NO.%

Tax%Ordinance%7988%was%declared%null%and%void%because%it%failed%to%follow%procedure%in%the%enactment%of%tax%measures%as%mandated%by%Section%188%of%the%LGC,%in%that%they%failed%to%publish%for%three%consecutive%days%in%a%newspaper%of%local%circulation.%%

It%follows%that%if%Tax%Ordinance%7988%is%null%and%void%and%had%no%legal%effect%then%the%amending%Tax%Ordinance%8011%is%also%without%any%legal%effect.%%

%

& PROCEDURE&FOR&APPROVAL&AND&EFFECTIVITY&OF&TAX&ORDINANCE&AND&REVENUE&MEASURES;&MANDATORY&PUBLIC&HEARINGS&

DRILON&VS&LIM&ET&AL&

The%principal%issue%in%this%case%is%the%constitutionality%of%Section%187%of%the%Local%Government%Code.%The%Secretary%of%Justice%(on%appeal%to%him%of%four%oil%companies%and%a%taxpayer)%declared%Ordinance%No.%










7794%(Manila%Revenue%Code)%null%and%void%for%non-compliance%with%the%procedure%in%the%enactment%of%tax%ordinances%and%for%containing%certain%provisions%contrary%to%law%and%public%policy.%%RTCs%Ruling:%%

1.%%%%The%RTC%revoked%the%Secretarys%resolution%and%sustained%the%ordinance.%It%declared%Sec%187%of%the%LGC%as%unconstitutional%because%it%vests%on%the%Secretary%the%power%of%control%over%LGUs%in%violation%of%the%policy%of%local%autonomy%mandated%in%the%Constitution.%%Petitioners%Argument:%%

1.%%%%The%annulled%Section%187%is%constitutional%and%that%the%procedural%requirements%for%the%enactment%of%tax%ordinances%as%specified%in%the%Local%Government%Code%had%indeed%not%been%observed.%(Petition%originally%dismissed%by%the%Court%due%to%failure%to%submit%certified%true%copy%of%the%decision,%but%reinstated%it%anyway.)%

2.%%%%Grounds%of%non-compliance%of%procedure%a.%%%%No%written%notices%as%required%by%Art%276%of%Rules%of%Local%Government%Code%b.%%%%Not%published%c.%%%%Not%translated%to%tagalog%

Supreme%Courts%Argument:%1.%%%%Section%187%authorizes%the%petitioner%to%review%only%the%constitutionality%or%legality%of%tax%ordinance.%

What%he%found%only%was%that%it%was%illegal.%That%act%is%not%control%but%supervision.%2.%%%%Control%lays%down%the%rules%in%the%doing%of%act%and%if%not%followed%order%the%act%undone%or%re-done.%

Supervision%sees%to%it%that%the%rules%are%followed.%3.%%%%Two%grounds%of%declaring%Manila%Revenue%Code%null%and%void%(1)%inclusion%of%certain%ultra%vires%

provisions%(2)%non-compliance%with%prescribed%procedure%in%its%enactment%but%were%followed.%The%requirements%are%upon%approval%of%local%development%plans%and%public%investment%programs%of%LGU%not%to%tax%ordinances.%

%

ONGSUCO&AND&SALAYA&VS&MALONES&

FACTS:%

- Petitioners%are%stall%holders%at%the%Maasin%Public%Market,%which%had%just%been%newly%renovated.%%- August%6,%1998%:%the%Office%of%the%Municipal%Mayor%informed%the%petitioners%of%a%meeting%

scheduled%on%August&11,&1998%concerning%the%municipal%public%market.%o Revenue%measures%were%discussed%during%the%said%meeting,%including%increase%in%the%

rental%fees%and%the%imposition&of&goodwill&fees%- August%17,%1998:%the%Sangguniang%Bayan%of%Maasin%approved%Municipal%Order%No.%98-01,%this%

contained%a%provision%for%increased%rentals%and%the%imposition%of%goodwill%fees.%%













o However,%on%Sept.%18,%1998,%the%Sangguniang%Bayan%declared%the%Municipal%order%as%inoperative%because%majority%of%the%persons%that%is%affected%by%the%imposition%of%the%goodwill%fees%failed%to%agree%in%the%meeting.%%

o This%was%vetoed%by%the%Municipal%Mayor%- January%22,%1999%:%another%public%hearing%was%conducted%after%the%enactment%of%the%Municipal%

Order%- June%9,%1999:%respondent%informed%petitioners%that%they%were%occupying%the%stalls%without%a%

lease%contract%therefore%their%respective%stalls%will%be%considered%vacant%and%open%to%others%for%occupation%

- Petitioners%filed%a%petition%for%Prohibition/Mandamus%before%the%RTC%o Petitioners%argued%that%a%public%hearing%was%mandatory%before%the%enactment%of%the%

Municipal%Ordinance%and%that%it%must%be%conducted%10%days%after%the%notice%%o The%notice%sent%by%the%Mayor%was%only%for%5%days%o Respondent%in%his%answer%contends%that%the%goodwill%fee%is%not%a%tax%per%se%but%it%

involves%management%of%an%economic%enterprise%of%the%Municipality%hence%there%was%no%mandatory%requirement%to%hold%a%public%hearing%for%the%enactment%thereof%

- RTC%dismissed%the%petion,%CA%upheld%RTC%

ISSUE:%

WON%a%public%hearing%was%required%to%be%held%before%the%enactment%of%the%Municipal%Order%98-01%

HELD:%

YES.%%

It%must%be%noted%that%Section%219%of%the%LGC%provides%that%a%LGU%exercising%its%power%to%imposes%taxes,%fees%and%charges%should%comply%with%requirements%set%forth%in%the%Rules%[one%being%a%public%hearing].%

The%revenues%of%a%LGU%do%not%consist%of%taxes%alone,%but%also%other%fees%and%charges.%And%rentals%and%goodwill%fees,%imposed%by%Municipal%Order%98-01%for%the%occupancy%of%the%stalls%at%the%municipal%public%market,%fall%under%the%definition%of%charges.%%

Since%the%public%hearing%was%held%only%5%days%after%the%notice%it%was%fatal%to%its%enactment,%and%it%cannot%be%cured%by%the%subsequent%public%hearing%held%AFTER%its%enactment.%Therefore,%for%failing%to%comply%with%the%public%hearing%requirement%Municipal%Order%98-01%cannot%be%given%any%effect.%%

COMMON&LIMITATIONS&ON&THE&TAXING&POWERS&OF&LGUS&

1. EXCISE&TAX&

PETRON&CORPORATION&VS&TIANGCO&

FACTS:%








- Petron%maintains%a%depot%or%bulk%plant%at%the%Navotas%Fishport%Complex%in%Navotas.%Through%that%depot,it%has%engaged%in%the%selling%of%diesel%fuels%to%vessels%used%in%commercial%fishing%in%and%around%Manila%Bay%On%1%March%2002,%Petron%received%a%letter%from%the%office%of%Navotas%Mayor,%respondent%Toby%Tiangco,wherein%the%corporation%was%assessed%taxes%"relative%to%the%figures%covering%sale%of%diesel%declared%by%yourNavotas%Terminal%from%1997%to%2001.%

- The%computation%sheets%that%were%attached%to%the%letter%made%reference%to%Ordinance%92-03,%or%theNew%Navotas%Revenue%Code%(Navotas%Revenue%Code),%though%such%enactment%was%not%cited%in%the%letter%itself.&

- %Petron%duly%filed%with%Navotas%a%letter-protest%to%the%notice%of%assessment.%It%argued%that%it%was%exempt%from%local%business%taxes%in%view%of%Art.%232(h)%of%the%Implementing%Rules(IRR)%of%the%Code,%as%well%as%a%ruling%of%the%Bureau%of%Local%Government%Finance%of%the%Department%ofFinance%dated%31%July%1995,%the%latter%stating%that%sales%of%petroleum%fuels%are%not%subject%to%local%taxation.%&

- %The%letter-protest%was%denied%by%the%Navotas%Municipal%Treasurer.&- %Petron%filed%with%the%Malabon%RTC%a%Complaint%for%Cancellation%of%Assessment%for%Deficiency%

Taxeswith%Prayer%for%the%Issuance%of%TRO%and/or%Preliminary%Injunction.%&- However,%%while%the%case%%was%pending%decision,%respondents%refused%%to%issue%a%business%%

permit%to%Petron.%Malabon%RTC%rendered%its%Decision%dismissing%Petrons%complaint%and%ordering%the%payment%of%the%assessed%amount.&

%ISSUE:%

WON%%%a%%%local%%%government%%%unit%%%is%%%empowered%%%under%%%the%%%Local%%%Government%%%Code%%%(the%%%LGC)%%%to%%%impose%business%taxes%on%persons%or%entities%engaged%in%the%sale%of%petroleum%products.%

HELD:%

Particularly,%%%the%%%controversy%%%hinges%%%on%%%the%%%correct%%%interpretation%%%of%%%Section%%%133(h)%%%of%%%the%%%LGC,%%%and%%%the%applicability%of%Article%232%(h)%of%the%IRR.%Section%133(h)%of%the%LGC%reads%as%follows:%

Sec.%%%133.%%%Common%%%Limitations%%%on%%%the%%%Taxing%%%Powers%%%of%%%Local%%%Government%%%Units.%%-%%%Unless%otherwise%provided%herein,%the%exercise%of%the%taxing%powers%of%provinces,%cities,%municipalities,%and%Barangays%shall%not%extend%to%the%levy%of%the%following:%

xxx(h)%Excise%taxes%on%articles%enumerated%under%the%National%Internal%Revenue%Code,%as%amended,%andtaxes,%fees%or%charges%on%petroleum%products;%

Evidently,%Section%133%prescribes%the%limitations%on%the%capacity%of%local%government%units%to%exercise%their%taxing%powers%otherwise%granted%to%them%under%the%LGC.%Apparently,%paragraph%(h)%of%the%Section%mentions%two%kinds%%%of%%%taxes%%%which%%%cannot%%%be%%%imposed%%%by%%%local%%%government%%%units,%%%namely:%%%"excise%%%taxes%%%on%%%articles%enumerated%under%the%National%Internal%Revenue%Code%[(NIRC)],%as%amended;"%and%"taxes,%fees%or%charges%on%petroleum%products."%The%power%of%a%












municipality%to%impose%business%taxes%is%provided%for%in%Section%143%of%the%LGC.%Under%the%provision,%a%municipality%is%authorized%to%impose%business%taxes%on%a%whole%host%of%business%activities.%%

Suffice%it%to%say,%unless%there%is%another%provision%of%law%which%states%otherwise,%Section%143,%broad%in%scope%as%it%is,%would%undoubtedly%cover%the%business%of%selling%diesel%fuels,%or%any%other%petroleum%product%for%that%matter.%Nonetheless,%Article%232%of%the%IRR%defines%with%more%particularity%the%capacity%of%a%municipality%to%impose%taxes%on%businesses.%The%enumeration%that%follows%is%generally%a%positive%list%of%businesses%which%may%be%subjected%to%business%taxes,%and%paragraph%(h)%of%Article%232%does%allow%the%imposition%of%local%business%taxes%"on%any%business%not%%otherwise%%specified%%in%%the%preceding%%paragraphs%which%%the%sanggunian%%concerned%may%%deem%proper%to%tax,"%but%subject%to%this%important%qualification,%thus:%

"xxx%provided%further,%that%in%line%with%existing%national%policy,%any%business%engaged%in%the%production,%manufacture,%refining,%distribution%or%sale%of%oil,%gasoline%and%other%petroleum%%products%shall%not%besubject%to%any%local%tax%imposed%on%this%article.%As%earlier%observed,%Section%133(h)%provides%two%kinds%of%taxes%which%cannot%be%imposed%by%local%government%units:%

%"excise%%taxes%on%articles%enumerated"%under%the%NIRC,%as%amended;%%and%%"taxes,%fees%or%charges%on%petroleum%products."%

%There%is%no%doubt%that%among%the%excise%taxes%on%articles%enumerated%under%the%NIRC%arethose%levied%on%petroleum%products,%per%Section%148%of%the%NIRC%We%first%consider%Petrons%argument%that%the%"business%taxes"%on%its%sale%of%diesel%fuels%partakes%of%an%excise%tax,%which%if%true,%could%invalidate%the%challenged%tax%solely%on%the%basis%of%the%phrase%"excise%taxes%on%articles%enumerated%under%the%[NIRC]."Petrons%argument%is%fraught%with%far-reaching%implications,%for%if%it%were%sustained,%it%would%mean%that%local%government%units%are%barred%from%imposing%business%taxes%on%any%of%the%articles%subject%to%excise%taxes%under%the%NIRC.%%

These%would%include%alcohol%products,%tobacco%products,%mineral%products,%automobiles,%and%such%non-essential%goods%as%jewelry,%goods%made%of%precious%metals,%perfumes,%and%yachts%and%other%vessels%intended%for%pleasure%or%sports.%%

Beginning%with%the%National%Internal%Revenue%Code%of%1986,%as%amended,%the%term%"excise%taxes"%was%used%and%defined%as%applicable%"to%goods%manufactured%or%produced%in%the%Philippines%and%to%things%imported."%This%definition%%was%carried%over%into%the%present%%NIRC%of%1997.30%%Further,%these%two%latest%codes%categorize%two%different%kinds%of%excise%taxes:%"specific%tax"%which%is%imposed%and%based%on%weight%or%volume%capacity%or%any%other%physical%unit%of%measurement;%and%"ad%valorem%tax"%which%is%imposed%and%based%on%the%selling%price%or%other%specified%value%of%the%goods.%The%current%definition%of%an%excise%tax%is%that%of%a%tax%levied%on%a%specific%article,%rather%than%one%"upon%the%performance,%carrying%on,%or%the%exercise%of%an%activity."It%%%is%%%quite%%%apparent,%%%therefore,%%that%%%our%%%current%%%body%%%of%%%taxation%%law%%does%%not%%%explicitly%%%accommodate%%%the%traditional%definition%of%excise%tax%offered%by%Petron.%Thus,%%%Petrons%%%argument%%%concerning%excise%taxes%%%is%%%founded%%%not%%%on%%%what%%the%%%NIRC%%%or%%%the%%Code%%actually%provides,%but%on%a%non-statutory%definition%sourced%from%a%legal%paradigm%that%is%no%longer%applicable%in%this%jurisdiction.%We%next%consider%






whether%the%clause%"taxes,%fees%or%charges%on%petroleum%products"%in%Section%133(h)precludes%%%local%%%government%%%units%%%from%%%imposing%%%business%%%taxes%%%based%%%on%%%the%%%sale%%%of%%%petroleum%products.%The%power%of%a%municipality%to%impose%business%taxes%derives%from%Section%143%of%the%Code%that%specifically%enumerates%several%types%of%business%on%which%it%may%impose%taxes,%including%manufacturers,%wholesalers,%distributors,%dealers%of%any%article%of%commerce%of%whatever%nature;38%those%engaged%in%the%export%or%commerce%of%%essential%%%commodities;39%%retailers;40%%contractors%%and%%other%%independent%%contractors;41%%banks%%and%%financialinstitutions;42%%and%peddlers%engaged%in%the%sale%of%any%merchandise%or%article%of%commerce.43%%This%obviously%broad%power%%is%further%supplemented%%by%paragraph%%(h)%of%Section%%143%which%authorizes%%the%%%sanggunian%%to%impose%%%taxes%%%on%%%any%%%other%%%businesses%%%not%%%otherwise%%%specified%%%under%%%Section%%%143%%%which%%%the%%sanggunian%concerned%may%deem%proper%to%tax.%This%ability%of%local%government%units%to%impose%business%or%other%local%taxes%is%ultimately%rooted%in%the%1987Constitution.%Section%5,%Article%X%assures%that%"[e]ach%local%government%unit%shall%have%the%power%to%create%its%own%sources%of%revenues%and%to%levy%taxes,%fees%and%charges,"%though%the%power%is%"subject%to%such%guidelines%and%limitations%as%the%Congress%may%provide."Congress%has%the%constitutional%authority%to%impose%limitations%on%the%power%to%tax%of%local%government%units,%and%Section%133%of%the%Code%is%one%such%limitation.%Indeed,%the%provision%is%the%explicit%statutory%impediment%to%the%enjoyment%of%absolute%taxing%power%by%local%government%units,%not%to%mention%the%reality%that%such%power%is%a%delegated%power.%Section%133(h)%states%that%local%government%units%"shall%not%extend%to%the%levy%of%xxx%taxes,%fees%or%charges%on%petroleum%%%products."%%%Respondents%%%assert%%%that%%%the%%%phrase%%%"taxes,%%%fees%%%or%%%charges%%%on%%%petroleum%%%products"%pertains%to%the%imposition%of%direct%or%excise%taxes%on%petroleum%products,%and%not%business%taxes.%If%the%phrase%actually%pertains%to%excise%taxes,%then%it%would%be%an%exercise%in%utter%redundancy,%since%the%preceding%phrase%already%prohibits%the%imposition%of%excise%taxes%on%articles%already%subject%to%such%taxes%under%the%NIRC,%such%as%petroleum%products.%There%would%be%no%sense%on%the%part%of%the%legislature%to%twice%emphasize%in%the%same%sentence%that%excise%taxes%on%petroleum%products%are%beyond%the%pale%of%local%government%taxation.%The%dicta%that%"[a]%tax%on%a%business%is%distinct%from%a%tax%on%the%article%itself"%might%at%first%blush%somehow%lend%support%to%respondents%position,%yet%that%dicta%has%not%since%been%reprised%by%this%Court.%It%is%likewise%worth%observing%that%Pililla%did%involve%a%tax%ordinance%that%imposed%business%taxes%on%an%enterprise%engaged%in%the%manufacture%and%storage%of%petroleum%products.%Significantly,%the%legal%milieu%governing%Pililla%is%vastly%different%from%that%existing%at%bar,%to%the%extent%that%the%earlier%case%could%not%be%presently%controlling.%In%%%view%%%of%%%the%%%difference%%%in%%%statutory%%%paradigm%%%between%%%this%%%case%%%and%Pililla,%%%the%%%latter%%%case%%%is%%%severely%diminished%as%applicable%precedent%at%bar.%We%can%concede%that%a%tax%on%a%business%is%distinct%from%a%tax%on%the%article%itself,%or%for%that%matter,%that%a%business%tax%is%distinct%from%an%excise%tax.%However,%such%distinction%is%immaterial%insofar%as%the%latter%part%of%Section%133(h)%is%concerned,%for%the%phrase%"taxes,%fees%or%charges%on%petroleum%products"%does%not%qualify%the%kind%of%taxes,%fees%or%charges%that%could%withstand%the%absolute%prohibition%imposed%by%the%provision.%It%would%have%been%a%different%matter%had%Congress,%in%crafting%Section%133(h),%barred%"excise%taxes"%or%"direct%taxes,"%or%any%category%of%taxes%only,%for%then%it%would%be%understood%that%only%such%specified%taxes%on%petroleum%products%could%not%be%imposed%under%the%prohibition.%The%absence%of%such%a%qualification%leads%to%the%conclusion%that%allsorts%of%taxes%on%petroleum%products,%including%business%taxes,%are%prohibited%by%Section%133(h).%




Where%the%law%does%not%distinguish,%we%should%not%distinguish.%The%language%of%Section%133(h)%makes%plain%that%the%prohibition%with%respect%to%petroleum%products%extends%not%only%to%excise%taxes%thereon,%but%all%"taxes,%fees%and%charges."%The%earlier%reference%in%paragraph%(h)%to%excise%taxes%comprehends%a%wider%range%of%subjects%of%taxation:%all%articles%already%covered%by%excise%taxation%under%the%NIRC,%such%as%alcohol%products,%tobacco%products,%mineral%products,%automobiles,%and%such%non-essential%goods%%%as%%%jewelry,%%%goods%%%made%%%of%%%precious%%%metals,%%%perfumes,%%%and%%%yachts%%%and%%%other%%%vessels%%%intended%%%for%pleasure%or%sports.%In%contrast,%the%later%reference%to%"taxes,%fees%and%charges"%pertains%only%to%one%class%of%articles%of%the%many%subjects%of%excise%taxes,%specifically,%"petroleum%products".%While%local%government%units%are%authorized%to%burden%all%such%other%class%of%goods%with%"taxes,%fees%and%charges,"%excepting%excise%taxes,%a%specific%prohibition%is%imposed%barring%the%levying%of%any%other%type%of%taxes%with%respect%to%petroleum%products.%

2. GROSS&RECEIPTS&OF&TRANSPORTATION&CONTRACTORS&

FIRST&PHILIPPINE&INDUSTRIAL&CORPORATION&VS&CA&

FACTS:%

- Petitioner%is%a%grantee%of%a%pipeline%concession%under%RA%387.%The%original%pipeline%concession%was%granted%in%1967%and%renewed%by%the%ERB%in%1992.%%

- In%January%1995,%petitioner%filed%for%a%mayors%permit%with%the%Office%of%the%Mayor%in%Batangas%City.%However,%before%the%mayors%permit%could%be%issued,%the%respondent%City%Treasurer%required%petitioner%to%pay%a%local%tax%based%on%its%gross%receipts%for%the%fiscal%year%1993%pursuant%to%the%LGC.%

o Petitioner%paid%the%tax%under%protest%o Petitioner%filed%a%letter%protest%%

! It%contends%that%FPIC%is%a%pipeline%operator%with%a%government%concession%granted%under%the%Petroleum%Act.%%

! It%is%engaged%in%the%business%of%transporting%petroleum%products%via%pipeline,%as%such%they%are%exempt%from%paying%tax%on%gross%receipts%under%Section%133%of%the%LGC%

- Respondent%City%Treasurer%denied%the%protest%contending%that%petitioner%cannot%be%considered%engaged%in%the%transportation%business.%%

- Petitioner%filed%a%complaint%for%tax%refund%before%the%RTC,%RTC%dismissed%the%complaint.%%

ISSUE:%

WON%petitioner%can%be%considered%a%common%carrier%hence%exempt%from%tax%imposed%by%the%LGC%

HELD:%

YES.%%







Petitioner%is%considered%a%common%carrier,%even%under%the%Petroleum%Act,%therefore%they%are%exempt%from%taxes%imposed%by%the%LGU.%%

At%the%deliberations%conducted%in%the%House%of%Representatives%on%the%LGC,%the%reason%for%excluding%the%transportation%system%from%the%taxing%powers%of%the%LGU%is%that%they%do%not%want%to%have%a%duplication%of%the%taxes.%Transportation%Contractors%are%already%paying%3%%common%carrier%tax%pursuant%to%the%NIRC.%To%tax%petitioner%again%on%its%gross%receipts%in%its%transportation%of%petroleum%business%would%defeat%the%purpose%of%the%LGC.%%

3. NATIONAL&GOVERNMENT&AGENCIES&AND&INSTRUMENTALITIES&AND&LGUS&

CITY&OF&PASIG&VS&PCGG&

FACTS:%

MPLDC%owned%two%parcels%of%land%in%Pasig%City.%In%1986,%Jose%Y.%Campos,%the%registered%owner%of%MPLDC,%voluntarily%surrendered%%MPLDC%to%the%government.%From%2002-2005,%Pasig%City%sent%notices%of%assessment%to%MPLDC%to%demand%payment%of%real%property%taxes.%PCGG%filed%with%the%RTCC%a%petition%for%prohibition%with%a%prayer%for%issuance%of%a%TRO%claiming%ownership%over%the%said%properties.%

%

ISSUE:%

Are%the%properties%owned%by%PCGG%subject%to%real%property%taxes?%

HELD:%

Only%those%portions%of%the%properties%leased%to%taxable%entities%are%subject%to%real%estate%taxes%for%the%period%of%such%leases%and%may%also%be%sold%at%public%auctioned%%to%satisfy%the%tax%delinquency.%While%it%was%established%that%the%owner%of%the%properties%is%now%clearly%the%Republic%of%the%Philippines%given%the%voluntary%surrender,%the%Local%Government%Code%clearly%states%that%the%exemption%will%not%apply%when%the%beneficial%use%thereof%has%been%granted,%for%consideration%or%otherwise,%to%a%taxable%person.%The%Court%cited%several%cases%to%support%the%decision%such%as%Philippine%Fisheries,%GSIS,%MIAA,%and%Lung%Center.%

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Cruz Tax 2 Digests (Local Taxation)

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Transcript of Cruz Tax 2 Digests (Local Taxation)