Tax Obligation of Cabugao (I. Sur) Facoma, Inc.

July 21, 1960 BIR RULING NO. 330-60 The Information Department Philippine Free Press P. O. Box 457, Manila Gentlemen : With reference to your letter dated March 9, 1960, requesting this Office to answer the queries propounded by the Cabugao (I. Sur) Facoma, Inc., I have the honor to inform you as follows: A wholesale leaf tobacco dealer (L-3) dealing in Virginia leaf tobacco cannot engage in the business of buying Virginia leaf tobacco outside the place of business or province where the L-3 permit has been issued, without permit from the Commissioner of Internal Revenue. The same thing is true in the case of farmer's cooperative marketing association (L-3F). It may be stated that, pursuant to section 19 of Regulations No. 17, otherwise known as the Internal Revenue Leaf Tobacco Regulations, buying agents can purchase leaf tobacco for wholesale leaf tobacco dealers only within the province where the business of the latter is located. However, this does not in any way preclude one L-3 holder from buying leaf tobacco from another L-3 holder from another province, provided that such leaf tobacco is accompanied with the necessary official guia and the other requirements of standing regulations governing the same business are complied with. Likewise, an L-3 holder may sell or transfer leaf tobacco outside his place of business, provided that said requirements are complied with. The fact that a person has secured a municipal license to engage in the Virginia leaf tobacco business does not mean that he is already licensed under the internal revenue law to engage in that business, a municipal license being imposed in accordance with a municipal ordinance and not with the National Internal Revenue Code. The question of whether or not a municipal council may an ordinance imposing a license upon persons engaged in Virginia leaf tobacco business is not within the jurisdiction of this Office. Accordingly, the matter has, on even date, been referred to the Secretary of Finance who has jurisdiction over the same. cdta As requested, the basic inquiry is herewith returned to you. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue