Dealer of the International Harvester Company

May 12, 1958 BIR RULING NO. 272-58 2nd Indorsement Respectfully returned to the Regional Director, Regional District No. 2, San Fernando, Pampanga, the within papers bearing on the commercial broker's tax case of Mr. Emeterio Morales. LibLex It appears from the papers of the case that Mr. Morales, as dealer of the International Harvester Company, brings about the sales, for compensation, of the products of the company. Mr. Morales is typically a commercial broker. The fact of whether he is paid by way of commission or the so-called 'trade discount' is immaterial. Although the word 'commission' as used in a mercantile sense is said to be without technical meaning, in business as well as the legal acceptation of the term, it has a well known and definite signification. It may refer to the compensation allowed an agent, factor, or other person who manages the affairs of another, in recompense for his services; the percentage, brokerage, or allowance made to a factor or other person for transacting business of another, a percentage on the price or value. It may be given a broader meaning than merely that of a per centum valuation of the services so as to include any advantages or profit resulting from the transaction. (Cal. Jenkins v. Locks-Paddon Co., 157 P. 537, 30 Cal. App. 52.) It was held to be equivalent to or synonymous with 'deduction' and 'discount'. (U.S.-Swift & Coutney & Seecher Co. v. U.S., Ct. C1., 4 S. Ct. 244, 111 U.S. 22, 25, 28 L. Ed. 341.) He is, therefore, advised to enforce the collection of the tax assessed against Mr. Morales. LLphil (SGD.) JOSE ARAAS Commissioner of Internal Revenue