BIR Ruling

October 27, 1969 Miss Flora W. Icasiano St. Anne's Home for Ladies 891 Galicia, Sampaloc Manila M a d a m : This refers to your letter dated September 2, 1969, requesting information as to what taxes you should pay in connection with the operation of your dormitory. In reply thereto, I have the honor to inform you that you are not liable for the payment of any internal revenue tax on business, since in operating your dormitory you are not considered a keeper of a hotel or a lodging house which are, among others, subject to the fixed and percentage taxes prescribed in Sections 182(A)(1) and 191 of the Tax Code. It may be stated that the principal difference between hotels and lodging houses, on the one hand, and dormitories, on the other, is that, unlike the former, the latter is not open indiscriminately to the general public. Dormitories and similar boarding houses cater only to students, professors, and employees and they do not charge their boarders as high a fee as that charged by hotels and lodging houses. LLphil However, as operator of a dormitory, you are subject to the income and additional residence taxes. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue