Third-Class Theaters, Liability to the Fixed Tax

September 1, 1972 BIR RULING NO. 023-72 Third-class theaters, liability to the fixed tax For internal revenue purposes, theaters are classified as first run theaters, and second run theaters. In BIR Ruling No. 004-70, dated February 27, 1970, it was held that a first run theater is one where a picture is first exhibited in any given locality. A subsequent run theater is one in which there is a subsequent exhibition of the same picture in the same locality. (Interstate Circuit vs. United States Tex, 59 S. Ct. 475, 306 U. S. 208, 83 L. Ed.). A theater classified as a third class theater for municipal license purposes cannot be a first run theater under the above definition. At most, it is a second run theater, because pictures exhibited therein were already exhibited in other theaters in the same locality. Accordingly, a theater classified as a third class theater for purposes of the municipal license is subject to the annual fixed tax of P200.00 as a second run theater, in accordance with Section 182(A)(3)(hh) of the Tax Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue