18% Tax on Gross Receipts of Night or Day Club Business

March 17, 1988 BIR RULING NO. 108-88 123 71-001 108-88 S i r : This refers to your letter dated February 29, 1988 stating that you are intending to establish a business where a family can relax and have wholesome fun; that you are going to sell therein foods and drinks; that you shall allow your customers who come as one family to dance with one another if they want to; that you shall not employ receptionists and/or professional hostesses; that you do not intend to provide music by live musicians, instead, you shall use long playing records and/or tapes; and that you now request opinion on the kind and rate of taxes applicable on this particular business. In reply, I have the honor to inform you that paragraph (n) and (o) of Revenue Regulations No. 14-67, otherwise known as the Revised Amusement Tax Regulations provide as follows: "(n) 'Night Clubs' are resorts frequented by pleasure seekers at night where foods and wines and drinks are served and music furnished and the patrons allowed to dance whether with their own partners or professional hostesses furnished by such resorts. "(o) 'Day Clubs' are resorts frequented by pleasure seekers during the day where foods and wines and drinks are served and music furnished and the patrons allowed to dance whether with their own partners or professional hostesses furnished by such resorts." Inasmuch as you will serve foods and drinks, furnish long playing records and/or tapes and allow the members of the family to dance, then your business will fall under the category of a night or day club, as the case may be. Accordingly, you are subject to the 18% tax on your gross receipts pursuant to Section 123 (formerly Sec. 228) of the Tax Code as amended by Executive Order No. 273 and not merely to the 4% tax on sale of foods and 8% tax on the sale of drinks as prescribed by Section 114(c) of the same Code. aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner