Computation of Residence Tax B of an Individual Who Has Several Income and Assets

August 12, 1960 BIR RULING NO. 422-60 Mr. Mar S. Yulip Atimonan, Quezon S i r: Receipt is hereby acknowledged of your letter dated April 7, 1960 requesting information regarding the amount of Residence Tax B from an individual who has the following income and assets. liblex "(a) Total assessed value of real property P14,730.00 "(b) Received from Sales of Copra, Rice, and other products, 4,728.75 Less: Cost of Labor 2,000.55 Realty taxes 105.90 2,106.45 Net Receipt from Farming 2,622.30 "(c) Received from Sari-Sari Store business: Total Sales during the year P44,061.33 Less: Cost of Sales Stock at the Beginning 12,250.75 Add: Purchases 40,595.08 Total Goods for Sale 52,845.83 Less: Stock at the end 12,735.12 Cost of Sales 40,110.71 Gross Income 3,950.62 Other Income 125.97 Total Gross Income 4,076.59 Deductions: Taxes 314.40 Depreciations 660.00 Sundries 284.20 1,258.60 NET INCOME FROM SARI-SARI STORE 2,817.99 "(d) Received from Rentals of his buildings: Total rents Gross for 1 year 600.00 Less: Depreciation & Repairs 200.00 Taxes 39.20 239.20 NET INCOME FROM BUILDING 360.80 "(e) Share from operation of a CINEMA BUSINESS, a partnership with: P. Santos 25% JUAN DELA CRUZ 75% Gross Sales of tickets 17,844.00 4,461.00 13,383.00 Less: Oper. Expenses 19,965.14 4,991.28 14,973.86 TOTAL (2,121.14) (530.28) (1,590.86) (1,590.86) In reply thereto, I have the honor to inform you that inasmuch as the total value of the real property owned by such individual is less than P15,000.00 no additional residence tax is due thereon. As regards gross receipts from business the Residence Tax Law provides that for every five thousand pesos of gross receipts or earnings in excess of ten thousand pesos an additional residence tax of two pesos shall be collected. Based on the gross receipts declared in your letter there is an additional residence tax due from Mr. Juan dela Cruz in the amount of P14.00, computed as follows: P4,728.75 Gross receipts from sales of agricultural products 44,061.33 Gross receipts from sari-sari store. P48,790.08 Total gross receipts 10,000.00 exempt 38,790.08 = 7 x P2.00 = P14.00 additional residence tax on gross receipts 5,000 The partnership is subject to the five pesos (P5.00) residence tax "C" on corporation plus the additional residence tax (C-1) based on the gross receipts of the partnership computed at the rate of two pesos (P2.00) for every P5,000.00 gross receipts. Based on the total gross receipts declared in your letter, there is due from the partnership the amount of P6.00 as additional residence tax (C-1), computed as follows: P4,461.00 13,383.00 _________ P17,844.00 Total gross receipts = 3 x P2.00 = P6.00 additional residence tax (C-1) P5,000 For the year in question Mr. Juan dela Cruz will, therefore, pay the total amount of P26.00 as residence tax, itemized as follows: P .50 Residence Tax A 14.00 Residence Tax B (on gross receipts) 5.00 Residence Tax on Corporation (C) 6.00 C-1 P25.50 Total residence tax due In reply to your second query, I have the honor to inform you that withdrawals from business capital are not subject to Residence Tax B. casia Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue