Real Estate Dealer's Fixed Tax — Lease of Cold Storage

August 21, 1981 BIR RULING NO. 160-81 238-a 000-00 160-81 Ms. Rosario N. Gabriel Rm. 409 Victoria Bldg. 11th Avenue, Caloocan City M a d a m : This refers to your letter dated August 5, 1980 requesting a ruling on whether or not the receipts issued by your clients, the Magsimpan Ice Plant and Cold Storage and the T.P. Marcelo & Co., Inc., both of Navotas, Metro Manila, are subject to the documentary stamp tax on warehouse receipts imposed by Section 238 of the National Internal Revenue Code as amended. You have represented that your clients maintain cold storage in their respective business establishments; that in said cold storage, your clients lease space or room for a fixed monthly rental for which a receipt is issued; that the lessee utilizes the space or room leased by storing his goods therein as long as he pays the monthly rental, that he controls the key to the room and can get the goods stored therein anytime he wants; and that your clients as owners of the cold storage, are not liable in case of loss of the goods. cdta In reply thereto, I have the honor to inform you that the documentary stamp tax prescribed by Section 233(a) of the Tax Code is imposed "on each warehouse receipt for property held in storage in a public or private warehouse or yard for any other person than the proprietor of such warehouse or yard himself". A warehouse receipt has been defined as a receipt given by a warehouseman for chattel placed in his possession for storage purposes. (Bouvier's Law Dictionary Vo. 2, p. 3425) In the case of your clients, the receipts issued by them cover the rental payments for leasing space or rooms in their cold storage. Said receipts were not issued by your clients for the goods placed in their cold storage. Accordingly, said receipts are not subject to the documentary stamp tax imposed by Section 238 of the Tax Code. It is understood, however, that for leasing their cold storage which is a real property, your clients are subject to the real estate dealer's fixed tax imposed by Sections 192(3) (as) of the Tax Code. Moreover, their rental payments are subject to the 5% withholding tax, if they exceed P500 per contract or payment which ever is greater, pursuant to Section 1(c) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, implementing Section 53(f) of the Tax Code. cd Very truly yours, RUBEN B. ANCHETA Acting Commissioner