Tax Imposed in the Business of Buying Logs Out by Homestead Grantees

October 14, 1959 BIR RULING NO. 537-59 Mr. Manuel Sevedio Pitogo, Quezon S i r : In reply to your letter requesting, among others, information on what taxes you should pay if you will engage in the business of buying logs out by homestead grantees in your province for the purpose of selling the same, please be informed that for such business, you shall be subject to the graduated annual fixed tax (C-13) prescribed in section 182(A)(2) of the Tax Code. The amount of the tax which you will pay at the start of the business is P10.00. Thereafter, the said tax shall be based on your gross annual sales and is payable not later than January 20 of each year. The income derived from your business is also subject to the income and additional residence taxes as the case may be. In this connection, please be informed further that where the title to a homestead has been registered with the Bureau of Forestry in accordance with section 1829 of the Revised Administrative Code, no forest charges are due on the forest products cut or gathered therein. However, if timber and firewood cut or gathered in registered homesteads are to be transported to another municipality or are for commercial purposes the auxiliary invoices and the discharge permit shall be prepared and secured out the products nevertheless remain exempt from forest charges. (Sec. 15(a), Revenue Regulations No. 85) Where title to a homestead has not been registered with the Bureau of Forestry, all timber and firewood cut therein shall be considered as cut or gathered under a gratuitous license or under an ordinary license depending upon their use. If the products are for personal use or for public works, they shall be considered as cut under a gratuitous license and no forest charges shall be collected nor any invoice or discharge permit required, unless the products are shipped to another municipality or are of first group timber for personal use in any other municipality. If the products are used for any other purpose, the auxiliary invoices and discharge permit should be prepared and secured and the regular forest charges thereon collected. (Section 15(b), Ibid) With regard to the permits and licenses required of your business, if any, this Office is not the one charged with the duty of granting them. It is suggested that you refer the matter to the Department of Commerce and Industry which has jurisdiction thereof. Your query regarding customs requirements for your shipments which you stated as "pier inspection" should be addressed to the Bureau of Customs. prcd Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue