BIR Ruling No. 078-62

June 25, 1962 BIR RULING NO. 078-62 Messrs. Sycip, Gorres, Velayo & Co. Certified Public Accountants P. O. Box 589, Manila Gentlemen : This has reference to your letter dated March 21, 1962 stating, among other things, that your client, Islandia Hotels Corporation, is the lessee and operator of the new Davao Insular Hotel in Davao City; that as part of the operation of the Hotel, the management opened one of its rooms at the ground floor, known as the Maranew Room, as a combination of dining room and bar, that said room was opened to the public from morning to evening that a part of its promotional activities, the services of an orchestra was engaged for three months to provided music to the hotel guests who were allowed to dance, but only beginning from 8:30 in the evening. You now request opinion whether or not the Maranew Room should be considered a night club during the three month period and in the affirmative case, whether or not it should be considered only beginning 8:30 P. M. and, therefore, receipts from that time only were subject to the 10% tax under section 191 of the Tax Code. You also want to know when mere furnishing of music in a first-class restaurant and bar in a resort hotel does not convert such restaurant and bar into a night club. In answer thereto, I have the honor to inform you that under such set-up, the Maranew Room falls within the purview of the term "night club" as defined in section 2(n) of the Revenue Regulations No. V-57. The Revised Amusement Tax Regulations. However, only receipt from 8:30 in the evening are subject to the 10% tax. If music is being played merely for the listening pleasure of the guests but they are not permitted to dance, the restaurant and bar is not thereby converted into a night club for amusement tax purposes. aisadc Very truly yours, JOSE B. LINGAD Commissioner of Internal Revenue