Musical Presentations under Republic Act No. 722

May 30, 1973 BIR RULING NO. 019-73 Musical presentations under Republic Act No. 722. It is contended by the sponsor that the Victor Wood Special and the Parade of Stars (Florence Aguilar show) are exempt from the amusement tax on the ground that the same are musical programs. After a careful perusal of the facts and the law involved, this Office, is of the opinion as it hereby holds that the aforesaid shows are subject to the amusement tax. In the case of Wong & Lee vs. Collector of Internal Revenue, G.R. No. L-10155, August 30, 1958, the Supreme Court in affirming the decision of the Court of Tax Appeals that the presentation of the Xavier Cugat Show is not a musical program as contemplated by Republic Act No. 722 (now incorporated in Section 260 of the Tax Code, as amended by Republic Act No. 6110) ruled as follows: "Petitioners finally urge that under the provisions of Republic Act No. 722, Section 1, which 'exempts the holding of operas, concerts, recitals, dramas painting and dart exhibitions flower shows, and literary or oratorical or musical programs from the payment of any national or municipal amusement tax,' the performance and floor shows held by the Cugat Orchestra at the Riviera came under 'musical programs', and consequently, they (petitioners) were not liable to pay the amusement tax on the proceeds of the same. We fully agree with the Court of Tax Appeals that the exemption contemplated by Republic Act No. 722 refers to musical programs, operas, concerts, recitals, etc., where the exhibitions or performances have for their primary purpose the propagation and development of art and culture, and where the elements of profit is only incidental. The same may not be said in favor of petitioners. The purpose of petitioners in engaging the services of the Cugat Orchestra was not to propagate or promote art and culture among their patrons. As correctly said by the Court of Tax Appeals judging by the gross receipts realized by the petitioners during the period in question, which run to several thousand pesos, the conclusion is that the primary objective of the petitioners was to popularize their night club and to bolster the sale of drinks and food in their establishment, and that furthermore, the patrons of the Riviera during those nights, went there mainly to dine and 'dance to the tune of a world renowned orchestra,' because if their purpose was for culture and for the sake of art, they could and should have gone to the Philippine International Fair Auditorium to hear the same orchestra play with a better repertoire and at less expense to themselves." In the instant case, it cannot be said that the purpose of the sponsor in engaging the services of Victor Wood and Florence Aguilar is to propagate or promote art and culture among its patrons and that the profit is incidental. On the contrary, the fact that the performers of the shows are well-known stage and singing personalities, it is every evident that the sponsor wanted to draw big crowds for the shows. Said shows therefore, were an ordinary stage performance and having profit as the primary objective. Consequently, said shows cannot be considered musical programs within the contemplation of the tax exemption provisions of Section 260 of the Tax Code, as amended by Republic Act No. 6110.