Tax Liability of a Person Engage in Business as a Dealer in General Merchandise

August 11, 1959 BIR RULING NO. 368-59 Mr. Isabelo Lopez 2311 Int. 1, Pasig Line Sta. Ana, Manila S i r : This is in connection with your letter dated July 20, 1959 requesting information as to what internal revenue taxes will be paid by you if you engage in business as a dealer in general merchandise, particularly steel pins, hair pins, snap fastener and hook and eye. According to your letter you will purchase the above-mentioned merchandise in big boxes from direct importers and local dealers, after which you intend to repack them in smaller boxes or attach them to printed paper or cardboard before selling them to the public. The sales to be made by you under the above facts of your case are subsequent sales and, therefore, exempt from tax. However, for engaging in the aforesaid business, you will be liable to the payment of the graduated fixed tax prescribed in section 182(A)(2) of the National Internal Revenue Code, based on your gross annual sales during the preceding calendar year. The initial graduated fixed annual tax of ten pesos shall be paid by you before engaging in the aforesaid business. The gross income derived by you from the said business should also be declared for income tax and additional residence tax purposes. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue