Bureau of Local Government Finance Opinion

March 24, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Pablo V. Nava Owner and General Manager PVN Enterprises 2366 C. L. Montelibano Avenue Capitol Heights Bacolod City S i r : This refers to your letter dated January 29, 1997, requesting opinion whether it is legal for cities and municipalities of Western Visayas to collect Mayor's Permit fees and impose taxes on sales generated within their localities. It is represented that PVN Enterprises is engaged in the Distribution of Pharmaceuticals and Medical Supplies in Western Visayas. It is represented further that said enterprise is paying its mayor's permit fee as well as its taxes on the total sales in the entire Western Visayas in Bacolod City, having no branch office outside the said city. However, you claim that other cities and municipalities are charging the mayor's permit fees and imposing taxes on PVN's sales generated in their localities. Hence, the above request. In this connection, it is informed that before any tax, fee or charge may be collected from a taxpayer, the same must first be levied under a duly-enacted tax ordinance. In the absence of such tax ordinance, there will be no basis for the collection of any tax, fee or charge. In the situation laid-out, and for purposes of information only there being no specific transaction herein referred to, the law applicable is Article 243 (d)(2),(3) & (4) of the Implementing Rules and Regulations (IRR) implementing Section 150 of the Local Government Code (LGC) of 1991, quoted as follows: "Art. 243. Situs of the Tax. (a) . . . " "(d) Sales made by route trucks, vans or vehicles "(1) . . . "(2) For route sales made in a locality where a manufacturer, producer, wholesaler, retailer or dealer has no branch, sales office or warehouse, the sales are recorded in the branch, sales office or warehouse from where the route trucks withdraw their products for sale, and the tax due on such sales is paid to the LGU where such branch, sales office or warehouse is located. "(3) Based on the foregoing, LGUs where route trucks deliver merchandise cannot impose any tax on said trucks except the annual fixed tax authorized to be imposed by the province under Article 230 of this Rule on every delivery truck or van or any vehicles used by manufacturers, producers, wholesalers, dealers or retailers in the delivery or distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and other products as may be determined by the sangguniang panlalawigan, and by the city, pursuant to Article 223 of this Rule. HAIaEc "(4) In addition to this annual fixed tax, cities may also collect from same manufacturers, producers, wholesalers, retailers, and dealers using route trucks a mayor's permit fee which shall be imposed in a local tax ordinance pursuant to Article 233 in relation to Article 237 of this Rule." We trust that this will help clarify matters. Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director