Taxability of a Restaurant and a Night Club to be Located Within the Same Hotel Building

March 7, 1967 BIR RULING NO. 013-67 Messrs. Sycip, Gorres, Velayo & Co. 6760 Ayala Avenue Makati, Rizal Attention : Atty . B . V . Abela Gentlemen : This refers to your letter dated February 21, 1967 requesting information on the following: "Our client, Manila Intercontinental Hotel, Inc., is planning to operate in its proposed hotel building now under construction a night club and a restaurant. Our client will establish and operate the night club in the uppermost floor or storey of its proposed hotel building and the restaurant on the lower floor of the building. The night club and restaurant will be operated separately and independently of the other and will not be accessible to the patrons or either by means of connecting doors or passages. The only means by which customers or patrons of the night club could have access to the restaurant and the customers and patrons of the restaurant could have access to the night club is by going to the upper floor from the lower or vice versa by means of the elevator. The restaurant will not be maintained within the premises of the night club and will be separated therefrom by several floors or storeys of the hotel building. "Under the foregoing facts and before advising our client, we wish to seek your confirmation that for purposes of the percentage tax our client will be subject only to the 3% tax on its gross receipts from the operation of the restaurant to be established and operated by it in the lower floor of its proposed hotel building." In reply, I have the honor to inform you that since the proposed restaurant to be operated by your client will not be maintained within the premises of the proposed night club and the said restaurant will not be accessible to the patrons of the night club by means of connecting doors or passages, your client will be subject only to 3% tax on its gross receipts from the sale of foods and refreshments and 7% on its sales of wines and liquors pursuant to Section 191 of the Tax Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue