Presumption of Lodgers Whose Names Appear in the Registry Book of Hotels or Motels

No date supplied BIR RULING NO. 127-60 Mr. Ng See 729 Rizal Avenue M a n i l a S i r : In answer to your letter dated February 3, 1960, please be informed as follows: Lodgers whose names appear in the registry book of hotels or motels shall be presumed, for the purposes of the percentage tax, paying customers. Receipts or invoices should be issued to these customers and the correct amount of documentary stamps should be affixed to the duplicate of said receipts or invoices. If the keeper or operator of the hotel or motel claims that some of his customers did not pay, then it is for him to satisfactorily prove such fact in order that the consideration which should have been paid by such customers may not be included in the taxable gross receipts. "Tips" which you allegedly give to taxi drivers and other persons bringing customers to your place are not deductible from your gross receipts because no deduction from gross receipts are allowed for purposes of the percentage tax. (Sec. 191, Tax Code). But, "tips" which you gave to persons recommending new customers to you may be considered ordinary and necessary expenses incurred in carrying on your business and, as such, may be deductible from gross income for purposes of the income tax if properly substantiated. (Sec. 30(a), Tax Code). cdta Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue