Tax Liability of a Person Engaged in the Business of Purchasing Phone Records from Local Manufacturers

April 8, 1960 BIR RULING NO. 156-60 Mr. Flor L. Gaudines P.O. Box 1381 M a n i l a S i r : In answer to your letter dated April 5, 1960, as supplemented by that dated April 6, I have the honor to inform you that, for engaging in the business of purchasing phone records from local manufacturers thereof and subsequently selling them to your dealers (or for that matter, to any other person or entity), you are subject to the graduated annual fixed tax (C-13) imposed in section 182(A)(2) of the National Internal Revenue Code. Said tax is payable on or before January 20 of each year and the rate thereof determined by the amount of your gross sales during the preceding calendar year. However, before commencing business, the initial rate of P10.00 should first be paid. The above holds true notwithstanding the fact that you are the exclusive sales distributor of one or more local concerns manufacturing phone records. Neither would there be any difference is such business is conducted by you on a wholesale or retail scale. For engaging in said business, you are also subject, in proper cases, to the income and additional residence taxes, pursuant to section 21 of the Tax Code and section 1 of the Residence Tax Law (C.A. No. 465). The fact that manufacturers of whom you are the exclusive sales distributor may produce certain kinds of records upon your request and/or suggestion would not of itself subject you to any other internal revenue tax. Having verbally manifested to this Office that you have already prepared a query addressed to the City Treasurer of Manila on the Matter of municipal licenses and that you are familiar with the requirements regarding the keeping of books of accounts and the issuance of sales invoices or receipts, we deem it unnecessary to touch on those matters here. cdtech Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue