Taxability of the Bingo Prizes Offered by the Camp John Hay Air Base

October 27, 1958 BIR RULING NO. 612-58 1st Indorsement Returned to the Regional Director, Baguio City, his Memorandum dated October 23, 1958 relative to the taxability of the Bingo prizes offered by the Camp John Hay Air Base and the persons liable to the tax. cdpr This Office had already issued a ruling to the effect that automobiles imported by the U.S. Armed Forces which are to be offered as prizes are subject to the advance sales tax. This is for the reason that, under the Military Bases Agreement, exemption will lie only in respect of imported articles for use in the operation, maintenance, construction and defense of the bases. The one liable to tax in such case is naturally the U.S. Armed Forces, which is the importer. The same principle equally holds true in respect of the Bingo prizes offered by the Camp John Hay Air Base because at the time of the importation thereof the tax had already accrued and become payable. Accordingly, if anyone is to be held liable for the payment of the sales tax due on the prizes articles, it is the Camp John Hay Air Base. However, it may be stated in this connection, that the Camp authorities are certainly free to impose the terms and conditions connected with the Bingo games sponsored by it. In offering the prize articles, the Camp might have impliedly imposed the condition that prize winners shall be liable to the corresponding tax. Hence, its refusal to make delivery of the Hi-Fi radio-phone combination to the winner thereof without prior payment of the tax due thereon. On this score, this Office cannot properly intervene. It is purely a matter involving the Camp and the prize winners, although it may be said that the Camp should have made it known, for the information and guidance of all concerned, that prizes winners in the Bingo games must pay the corresponding tax on the prize articles. prcd He is, therefore, advised to be guided accordingly. (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue