Bureau of Local Government Finance Opinion

April 15, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned, thru the Municipal Treasurer, to the Municipal Mayor, both of Pila, Laguna. This refers to his letter dated February 13, 1997 requesting advice whether service stations such as Shell, retailing gasoline, diesel fuel, petroleum and oil to direct buyers are covered by the exemption from local taxation under Article 232(h) of the Implementing Rules and Regulations (IRR), implementing Section 143(h) of the Local Government Code (LGC) of 1991. In this connection, attached for reference and guidance is a copy of the 4th Indorsement dated July 11, 1994 of the Department addressed to the Regional Director for Local Government Finance of Region II, Tuguegarao, Cagayan, bearing on a similar query, the Pertinent portion of which is quoted hereunder: "In this connection, attention is invited to the provisions of Article 232(h) of the Implementing Rules and Regulations, implementing Section 143(h) of the Local Government code (LGC) of 1991, quoted hereunder: "`Art. 232. Tax on Business . . . . "'xxx xxx xxx. "'(h) . . . any business engaged in the production, manufacture, refining distribution or sales of oil, gasoline and other petroleum products shall not be subject to any local tax . . . .' "It is clear from the abovequoted provision that any business engaged in, among others, the distribution or sale of petroleum products shall not be subject to any local tax . . . ." In view of the foregoing, the Office of the Municipal Treasurer of that municipality is hereby instructed to cease and desist from collecting any tax on businesses engaged in the production, manufacture, refining, distribution or sales of oil, gasoline and other petroleum products. However, the business tax on sale of tires, batteries, and accessories (TBA) as well as for other services that gasoline dealers or stations are rendering to their customers or clientele imposed under duly approved local tax ordinances of that municipality may be collected. aATCDI We trust that this will clarify matters. Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director