Bureau of Local Government Finance Opinion

February 23, 1994 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Ms. Teresita Lim Cabreros Finance Manager Emerald Pizza, Inc. 4th Floor Emerald Bldg. 14 Emerald Avenue Ortigas Office Bldg. Complex Pasig, Metro Manila M a d a m : This refers to the letter dated January 12, 1994 of Emerald Pizza, Inc. (EPI) requesting a ruling on the situs of the tax. cd i It is represented that EPI is a franchise of, Pizza Hut International and engaged in restaurant operations. It operates three (3) restaurants located at Greenhills Shopping Center in San Juan, Robinson's Galleria in Quezon City and Alabang Commercial Center in Muntinlupa. It has a head office where its Finance and Administration hold offices in Pasig. EPI contends that in previous years said company paid its business taxes to the municipalities where the restaurants (sales outlets) are located. It appears however, that the Municipal Treasurer of Pasig is obliging EPI to pay business taxes in said municipality representing 30% of the sales made in its three sales outlets. The City Treasurer of Quezon City likewise wants to collect 100% business tax on the same. Hence, the above request. casia In this connection, please be informed that the provisions of the law applicable in Section 150 of the Local Government Code (LGC) of 1991, quoted hereunder: "Sec. 150. Situs of the Tax . (a) For purposes of collection of the taxes under Section 143 of this Code, manufacturers, assemblers, repackers, brewers, distillers, rectifiers and compounders of liquor, distilled spirits and wines, millers, producers, exporters, wholesalers, distributors, dealers, contractors, banks and other financial institutions and other businesses maintaining or operating branch or sales outlet elsewhere shall record the sale in the branch or sales outlet making the sale or transaction, and the tax thereon shall accrue and shall be paid to the municipality where such branch or sales outlet is located. In cases where there is no such branch or "sales outlet in the city or municipality where the sale or transaction is made, the sale shall be duly recorded in the principal office and the taxes due shall accrue and shall be paid to such city or municipality." (Underscoring supplied.) Considering the abovequoted provisions of law and the representations made in the said letter, it is the view of this Department that EPI should pay business taxes on all sales made in its sales outlet at Robinson's Galleria to Quezon City not to the municipality of Pasig. Said municipality may only collect Mayor's permit fee and other regulatory fees provided for under existing local tax ordinances of the municipality. The City Treasurer of Quezon City and Municipal Treasurer of Pasig in separate letters of even date have been furnished a copy of this communication for their guidance. It is hoped that this clarifies matters. Very truly yours, By authority of the Secretary: LORINDA M. CARLOS Executive Director Bureau of Local Government Finance