Single Establishment with Separate Businesses

October 12, 1959 BIR RULING NO. 480-59 The Regional Director Regional District No. 1 Baguio City S i r : Reference is made to your letter dated October 5, 1959 stating the following: "Lately, there is some confusion in the enforcement of the above quoted ruling where, in an establishment, separate businesses are being conducted. Thus, it is common in this City that a restaurant or refreshment parlor which is serving wines and liquors, is situated side by side with a sari-sari store (C-13) which sells cigars and cigarettes, located within the same compound or building, and owned by one and the same operator. In the face of such a set-up the question which arises is: Shall we subject to 7% tax the sales of cigars and cigarettes of the sari-sari store where such sales are made to the patrons of the adjacent restaurant or refreshment parlor which also serve wines and liquors?" In reply thereto, you are informed that, under the facts presented, the sales of the sari-sari store of cigars and cigarettes to the customers of the restaurant or refreshment parlor do not constitute part of the taxable receipts of the latter. This is for the reason that the sari-sari store is considered a distinct and separate business, pursuant to section 178 of the Tax Code. Your query is, therefore, answered in the negative. It is, however, understood that the sari-sari store should be provided with the retail tobacco dealer's privilege tax-receipt in addition to the C-13 privilege tax-receipt, pursuant to section 182(A)(3)(p) of the Tax Code. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue