Common Carriers as Franchise Grantees

1970 BIR RULING NO. 021-70 Common Carriers as Franchise Grantees Query: Whether or not common carriers, as franchise grantees by the Public Service Commission are subject to the P500.00 annual fixed tax imposed in Section 182(A)(3)(gg) of the Tax Code, as amended by Republic Act No. 6110. Ruling: Section 182(A)(3)(gg) of the Tax Code, as amended, which imposes a P500.00 annual fixed tax on franchise grantees, covers only franchise grantees who are subject to the franchise tax under Section 259 of the Tax Code and those who are paying special rates of percentage taxes on their gross receipts as provided in their respective legislative or municipal franchises. This conclusion is inferred from the fact that said sub-section (gg) enumerates taxpayers who are taxed under provisions of Chapters, I, II, III of Title VIII of the Tax Code. Inasmuch as common carriers are not taxed under the aforementioned provisions of the Tax Code, and considering that they are subject to the annual fixed tax of P50.00 prescribed in Section 182(A)(1) of the Tax Code, it is obvious that they are not subject to the annual fixed tax of P500.00 imposed by Section 182(A)(3)(gg). In other words, even if common carriers were to be considered franchise grantees under the Public Service Law, they are not the franchise grantees subject to the tax prescribed in the aforesaid provision of the Tax Code.