BIR Ruling

June 11, 1972 The President Malaybalay Hotel Owners Association c/o Tiara Hotel Malaybalay, Bukidnon M a d a m : This refers to your letter dated April 11, 1972 stating that in the southern town of Bukidnon, there are a number of lodging houses with from 5 to 18 rooms purely for lodging purposes and most must have their eating places; that they cater to traveling agents, salesmen, drug detailmen and occasionally to transient guests and out town visitors. Under the foregoing circumstances, you would like to be informed whether the said lodging houses are, like a hotel, required to keep guest and/or visitor book, issue official receipts covering cost of lodging, purchase required documentary and science stamps, pay monthly percentage tax, and obtain Municipal and BIR Licenses. You would also like to be informed if there is any difference between a hotel and a lodging house for internal revenue purposes; specific requirements and standards to be complied with in order to obtain a license/permit for a hotel or lodging place, and whether the placing of "hotel" in one's trade or business implies the operation of such business as a lodging house and not as a hotel. In reply, I have the honor to inform you that, for internal revenue tax purposes, there is no distinction or difference between hotels and lodging houses. Thus, under Section 191(14) of the Tax Code, as amended proprietors or operators of hotels, motels and lodging houses are subject to the P50.00 annual fixed tax prescribed in Section 182(A)(1) of the Tax Code and their gross receipts are subject to the 3% contractor's tax imposed in said Section 191 of the same Code. Said proprietors or operators of hotels, motels and lodging houses are required to keep guests or visitor's guest books, issue receipts to each individual guest lodging in a hotel, motel or lodging house, and affixed to each hotel receipt the necessary documentary and science stamps imposed in Section 226(b) of the Tax Code and Republic Act. No. 5448, respectively. With respect to specific requirements incident to the issuance of the privilege tax receipt, Section 203 of the Tax Code provides that every person engaged in any business or occupation on which a privilege tax is imposed by law shall, on or before the commencement of the business or occupation, register with the Revenue District Officer, within ten days after securing his privilege tax receipts, his name or style, place of residence, business or occupation, and the place where such business or occupation is carried on. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue