Bureau of Local Government Finance Opinion

February 10, 1994 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Rolando C. Cheng Exec. Vice-President Quinta Trading Co., Inc. 3453-55 V. Mapa St. cor. P. Sanchez St. Sta. Mesa, Manila S i r : This refers to your letter dated December 13, 1993 requesting a ruling on tax situs regarding a warehouse. It is represented that Quinta Trading Co., Inc. (QCTI), is a major distributor of industrial glass products manufactured by Republic - Asahi Glass Corporation (GAGC) whose manufacturing plant is located in Bo. Pinagbuhatan, Pasig Metro Manila. As part of business operations and for convenience, QTCI constructed its main warehouse in Bo. San Miguel, same municipality. The warehouse is for storage of glass products that QTCI distributes to its customers in various locations in Metro Manila and the provinces. Sales are, however, made documented and booked by QTCI sales force in its sales office in Manila. QTCI aims that it reports its gross sales and pay the corresponding sales tax in Manila where its business is located. The Municipal Treasurer of Pasig however, claims that QTCI's warehouse is a "Sales Warehouse" and should therefore file and record its gross sales and pay the corresponding sales tax in the municipality. In this connection, please be informed that the provisions of Section 150 of the Local Government Code of 1991, are implemented by Article 243 of the Implementing Rules and Regulations (IRR). Under subparagraph (3) of said Article 243 a "warehouse" is defined as: "A building utilized for the storage of products for sale and from which goods or merchandise are withdrawn for delivery to customers or dealers, or by persons acting in behalf of the business. A warehouse that does not accept orders and/or issue sales invoices as aforementioned, shall not be considered a branch or sales office." It is clear from the aforequoted rule that all products withdrawn from the Pasig warehouse and sold in Manila shall be taxable in Manila because of the existence of a sales office of the company therein. Conformably, if there are products withdrawn from the Pasig warehouse that are sold in places where the company does not have a branch or a sales office, the sale of such products shall be recorded in the warehouse in Pasig and shall be taxable by the municipality of Pasig. The Municipal Treasurer of Pasig is being furnished with a copy of this letter. Very truly yours, By authority of the Secretary: (SGD.) LORINDA M. CARLOS Executive Director Bureau of Local Government Finance