Documentary Stamp Tax on Hotel Receipts and Hotel Keepers

November 15, 1966 BIR RULING NO. 057-66 Mr. Fortunato V. de Ocampo 2150 A. Mabini Street Malate, Manila S i r : In reply to your letter dated September 5, 1966, I have the honor to inform you as follows: The clause "there shall be collected a documentary stamp tax of fifty centavos" found in Section 226(b) of the Tax Code applies not only to a hotel receipt for twenty pesos, but also to a hotel receipt for a fractional part of twenty pesos. In other words, although the amount charged is less than twenty pesos a receipt should be issued and the same is subject to the documentary stamp tax of fifty centavos. The cost of food and drinks served to a hotel guest does not form part of the hotel receipt if they are charged and served independently of the contract for lodging. In such case, the hotel keeper is deemed engaged in another line of business, that is, as operator of a bar and/or restaurant, subject to the taxes imposable on such business or businesses. If the contract for lodging include food and drinks and in some cases even laundry service, then the total contract price paid by a customer constitutes the hotel receipt which is subject to the 3% tax and documentary stamp tax. The documentary stamp tax paid by hotel keepers forms part of their gross receipts for purposes of the 3% tax, if the tax is charged to and paid by customers as part of the cost for lodging. The documentary tax is not, however, deductible from the gross receipts of the hotel keeper for purposes of the 3% tax. If the documentary stamp tax is not charged to the customer, then it does not form part of the receipt of the hotel keeper. aisadc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue