Taxes to be Paid for Construction Whose Main Area of Concentration is in Oil Refinery and Chemical Plant

April 8, 1960 BIR RULING NO. 203-60 Mr. Howard P. Swanson Tax Manager The M. W. Kellogg Company 711 Third Avenue New York 17, N. Y. U. S. A. S i r : Reference is made to your letter dated March 28, 1960, which was received by this Office on April 4, 1960, requesting information what taxes are to be paid for construction whose main area of concentration is in oil refinery and chemical plant. In reply, thereto, I have the honor to quote hereunder portions of the pertinent provisions of our National Internal Revenue Code, which read as follows: Section 182. Fixed taxes . (A) On business (1) Persons subject to percentage tax. Unless otherwise provided, every person engaging in a business on which the percentage tax is imposed shall pay a fixed annual tax of twenty pesos. . . . Section 191. Percentage tax on road, building, irrigation, artesian well, waterworks, and other construction work contractors, proprietors or operators of dockyards, and others . Road, building, irrigation, artesian well, waterworks, and other construction work contractors; filling contractors; demolition and salvage work contractors; arrastre contractors; persons engaged in the installation of gas or electric light, heat, or power; persons selling water, light, heat or power; except those paying franchise tax; proprietors or operators of dockyards, mine drilling apparatus, smelting plants, engraving plants, plating establishments, plastic lamination establishments, vulcanizing and recapping establishments; establishments for washing and/or greasing of motor vehicles, battery and charging; . . . and other independent contractors, shall pay a tax equivalent to three per centum of their gross receipts. xxx xxx xxx In accordance with the above quoted provisions of law, a person engaging in any business shall pay a fixed annual tax of twenty pesos and shall pay it before the business can be lawfully begun or pursued. As a construction contractor in oil refinery and chemical plants, you are therefore subject to 3% tax of your gross receipts. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue