Taxability of a Home Industry and Other Retailers

September 22, 1966 BIR RULING NO. 036-66 Mr. Paterno M. Lamparas Loon, Bohol S i r : In reply to your letter dated January 27, 1966, I have the honor to inform you as follows: Generally, a home industry is subject to the same taxes as any similar industries carried elsewhere are subject. However, producers of commodities of all class working in their own homes, consisting of parents and children living as one family, when the value of each day's production by each person capable of working is not in excess of five pesos are exempt from the fixed and percentage taxes pursuant to Section 188(d) of the Tax Code. A home industry may also qualify as a cottage industry under Republic Act No. 3470 in which case, it is exempt from the fixed and percentage taxes for a period of five years from the date of the registration of the industry with the NACIDA. All persons subject to any internal revenue tax must keep books of accounts (Sec. 334, Tax Code) regardless of the business or occupation carried on or changes thereof. There is no such thing as percentage tax on P5, to be paid by a home industry in order to be exempt from the keeping of books of accounts. All home industries having a gross income of P1,800 or more per annum must keep books of accounts even if they qualify as an exempt industries, they being subject to income tax in all cases. There are no changes in the law as regards the keeping of books of accounts. A retail dealer in fermented liquors is liable to the B-7 fixed tax for retailers of fermented liquors and at the same time may be held liable also for the payment of the peddler's fixed tax of B-1(a) as retail peddlers of distilled manufactured, or fermented liquors because the tax on business is payable for every separate or distinct establishment or place where business subject to tax is conducted. (Sec. 178, Tax Code). The same holds true in the case of peddlers and dealers of vino or tobacco products either at wholesale or retail. In other words, the dealer's tax is distinct and different from the peddler's tax. A peddler may under his privilege tax-receipt peddle in all places in the country. A retailer may hold as many privilege tax-receipts corresponding to the products he retails. The legality, extent, or scope of tax ordinances are not within the province of this Office. cdtech Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue