Taxability of Atlantic Tobacco Flue-Curing and Redrying Corporation

October 29, 1958 BIR RULING NO. 638-58 The Atlantic Tobacco Flue-Curing & Redrying Corporation No. 2, 7th Avenue, Grace Park Caloocan, Rizal Gentlemen : This is in connection with your letter dated October 15, 1958 requesting a reinvestigation of the different activities undertaken by you to ascertain what taxes are covered by your tax exemption granted under Republic Act 901. This Office finds no necessity of conducting a reinvestigation in view of the following admissions in your letter: prcd 1. That storage fees are collected by you on tobacco stored in your bodega but not redried in your plant; and 2. That storage fees are also collected by you on tobacco stored in your bodega and redried in your plant. Under the facts admitted in your letter, there is no question that you are engaged in two distinct businesses, the warehousing business and the flue-curing and redrying of Virginia leaf tobacco. It appears that you were granted tax exemption by the Department of Finance in respect to flue-curing and redrying of Virginia leaf tobacco. The said exemption covers only all taxes directly payable by you in respect to said industry. It cannot apply to taxes paid by you in respect to the warehousing business. Accordingly, you are liable for the payment of the fixed tax of twenty pesos (P20.00) plus the percentage tax of 3% prescribed in Sections 182(A) and 191, respectively, both of the National Internal Revenue Code. The storage fees received by you on Tobacco redried in your plant and stored in your bodega is subject to the 3% tax. cdpr Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue