Dealer Subject of the Graduated Fixed Annual Tax

August 27, 1958 BIR RULING NO. 448-58 Miss Felicula Lazaro Gen. Luna Street Malabon, Rizal M a d a m : Reference is made to your letter dated August 27, 1958 stating the following: cdpr "I am the operator of the Flying 'A' Floating Station in Malabon, Rizal. I own a landing barge which I purchased out of my fund and I buy crude oil from the Tide Water Associated Co. In turn, I sell the said crude oil direct to fishing boat operators. I do not make any profit out of my sales because I have an understanding with the Tide Water Associated that I should not make any overprice in my sales as I will get an allowance of one-half () centavo per liter out of my purchases from them. You will therefore note that my business is just like that of an ordinary gasoline station, except that while the gasoline station makes a profit in their sales plus the commission that they receive from the gasoline station, in may case, I do not make any profit out of my sales but what I get is the one-half centavos per liter allowance. "May I know therefore the sales that I am making without profit at that should be declared in my income tax return and whether the same shall be subject to graduated fixed tax? May I know also under that kind of tax will my operation be covered and the specific section of the Internal Revenue Code under which my business will fall?" In reply, I have the honor to inform you that, under the above facts, you are dealer subject to the graduated fixed annual tax prescribed by Section 182(A)(2) of the Tax Code. Your profits from the business which consist of the centavo allowance plus all other income you derived from all sources should be declared for the income tax. LexLib Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue