BIR Ruling

November 4, 1975 Mr. Lino Onagan Dean, College of Commerce Union College, Sta. Cruz Laguna S i r : This refers to your letter dated October 13, 1975 requesting that the laboratory store which your school is contemplating to operate, to deal in school supplies and allied items be exempted from the payment of business tax and license fees. It is represented that the aforesaid store is purely laboratory in nature providing work experience and business practice to your students in accounting, marketing, retail merchandising and etc.,: that the laboratory store is non-profit and open exclusively to members (students, faculty members and employees) and that it is also designated to engage in research for various aspects of cooperative and small business management as its contribution to the advancement of the cooperative measurement and to the national effort to economic growth and development. In reply, I have the honor to inform you that the laboratory store to be operated and maintained by students, faculty members and employees of the college primarily for instructional purposes where locally purchased general merchandise are sold at retail is not subject to the payment of the graduated annual fixed tax imposed under Sec. 182(a)(2) of the Tax Code, considering the fact that the laboratory store is operated in a cooperative manner and not for profit. As regards your request for exemption from the payment of license fee, it is suggested that the same be addressed to the local government concerned. Very truly yours, (SGD.) EFREN I. PLANA Actg . Commissioner of Internal Revenue TAN-1456-040-3