Selected Barrow Sold to the Bureau of Public Highways

February 7, 1960 BIR RULING NO. 031-60 Mr. Arsenio Sico Dasmarias, Cavite S i r : Reference is made to your letter dated February 5, 1960 stating the following: "Pursuant to a contract with the Bureau of Public Highways, Manila, I furnished and delivered construction materials consisting of selected barrow, or soil mixed with sand. After the delivery of said materials on the road designated by the Bureau of Public Highways, I have nothing to do with the use of said materials. In other words, the selected barrow which I purchased from various persons and individuals, duly receipted for, were sold to the government. However, my sales of the said materials in the total sum of P31,864.40 were considered by the Bureau of Public Highways as subject to the contractor's tax prescribed by Section 191 of the Tax Code." Under the foregoing facts you cannot be considered an independent contractor within the purview of section 191 of the National Internal Revenue Code. Consequently, you are not subject to the 3% contractor's tax. However, inasmuch as the selected barrow which you sold to the Bureau of Public Highways were previously purchased from various persons, you are subject to the graduated annual fixed tax prescribed by section 182(A-2) of the National Internal Revenue Code. lexlib Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue