BIR Ruling

March 7, 1977 Mr. Carlos P. Auman 12-1 P. del Rosario St. Cebu City S i r : This refers to your letter dated August 11, 1976, requesting information whether your sister-in-law would be subject to the P50.00 fixed tax and the 3% contractor's tax pursuant to Sections 182(A)(1) and 191 both of the Tax Code, if she will engage in manual laundry services with everything such, as washing and ironing, to be done by hand, no machinery to be used in the process. In reply, I have the honor to inform you that under Section 191(8) of the Tax Code provides that: "SEC. 191. Contractors, proprietors or operators of dockyards and others . A contractor's tax of three per centum of the gross receipts is hereby imposed on the following: "xxx xxx xxx "(8) Proprietors or operators of dry-cleaning or dyeing establishments, steam laundries using washing machines;" As your sister-in-law will not use washing machine in her proposed laundry shop, she is not subject to the fixed and percentage taxes imposed by Sections 182(a)(1) and 191 of the Tax Code. However, she is subject to income tax derived from her business. cdta Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3