Taxability of Separate Branches of a Business Establishment

July 16, 1971 BIR RULING NO. 011-71 Under Section 178 of the Tax Code, the tax on business is payable for every separate and distinct establishment or place where business subject to tax is conducted. This provision contemplates a case where a person, firm or company who or which, although engaged in only one particular class of business, nevertheless, maintains two or more separate and distinct branches or establishments for the operation of said business. The fact that the branches are located within the same city or municipality is immaterial as long as they are separate and distinct from each other. In such case, the fixed tax is imposed upon every separate and distinct branch or establishment where the business subject to tax is conducted. Therefore, the main store is subject to the annual graduated fixed tax based exclusively upon the amount of its gross sales during the preceding year. The two (2) separate branch stores are each subject to the graduated fixed tax based on their respective amount of gross sales during the preceding year. cdt