amusement taxes

Has anyone ever heard of this I am a businessman running an inland resort and have been told today that I must pay an amusement tax of 10% on top of the Bir and registered business taxes can anyone shed some light on this for me

before i will answer your question, let us define amusement tax UNDER THE LAW.

(g) AMUSEMENT TAX - Tax collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%)- AMENDED TO 10% BY RA 9640 of the gross receipts from admission fees.

CLEARLY, THE OPERATION OF BEACH RESORT IS NOT COVERED BY AMUSEMENT TAX (LOCAL TAX).

ONLY THOSE OPERATORS, LESSEES, PROPRIETORS OF
1. THEATERS,
2. CINEMAS,
3. CONCERT HALLS,
4. CIRCUS,
5. BOXING STADIA,
6. AND OTHER PLACES OF AMUSEMENT (SIMILAR TO THOSE ENUMERATED).


HENCE, IF THERE IS A MUNICIPAL, PROVINCIAL OR CITY ORDINANCE IMPOSING AMUSEMENT TAX ON BEACH RESORTS, THAT ORDINANCE IS NOT VALID FOR BEING CONTRARY TO RA 7160, AS AMENDED BY RA 9640.


BETTER CONSULT YOUR LAWYER ABOUT THIS 10% AMUSEMENT TAX THAT YOU WERE REQUIRED TO PAY.







NOTES ( ASSUMING YOU ARE ONE OF THOSE COVERED BY AMUSEMENT TAXES LIKE YOU HAVE A THEATER BUSINESS- NOT BEACH RESORT).


who assessed that 10% amusement tax?

if it is the province or the city who assessed that 10% amusement tax, that assessment is valid because section 140 of RA 7160, as amended by RA 9640, specifically grants to provinces and cities the right to assess amusement taxes (before 30%, now 10%). take note however that the proceeds (10% amusement tax) will be shared equally by the province and the municipality.

cities have the broadest powers because it has the specific powers of municipalities and the general tax powers as the province may impose under the local government code. (see section 151 of the Local government code).hence, if it is the city who made the assessment of amusement tax, that assessment is valid.


however, if it is the municipality that assessed the 10% amusement tax, that is not valid because it exceeded the statutory limits under the Code. the power to assess 10% amusement tax is not granted by law to municipalities. the said tax must be imposed by the province where the said municipality is located. [u][u][u]

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SECTION 140 OF RA 7160 (LOCAL GOVERNMENT CODE)

The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%- AMENDED TO 10% BY RA 9640) of the gross receipts from admission fees.

(b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the cinematographic films.

(c) The holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical presentations, except pop, rock, or similar concerts shall be exempt from the payment of the tax hereon imposed.

(d) The sangguniang panlalawigan may prescribe the time, manner, terms and conditions for the payment of tax. In case of fraud or failure to pay the tax, the sangguniang panlalawigan may impose such surcharges, interest and penalties as it may deem appropriate.

(e) The proceeds from the amusement tax shall be shared equally by the province and the municipality where such amusement places are located.





Republic Act No. 9640

AN ACT AMENDING SECTION 140 (A) OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS "THE LOCAL GOVERNMENT CODE OF 1991"

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

Section 1. Section 140 of Republic Act No. 7160, otherwise known as "The Local Government Code of 1991", is hereby amended to read as follows:

"SEC. 140. Amusement Tax. - (a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than ten percent (10%) of the gross receipts from the admissions fees

"(b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are devided between said proprietors, lessees, or operators and the distributors of the cinematographic films.

"(c) The holding of operas, concerts, dramas, recitals, paintings, and art exhibitions, flower shows, musical programs, literary and oratorical presentations, except pop, rock, or similar concerts shall be exempt from the payment of the tax herein imposed.

"(d) The sangguniang panlalawigan may prescribe the time, manner, terms and conditions for the payment of tax. In case of fraud or failure to pay the tax, the sangguniang panlalawigan may impose such surcharges, interest and penalties as it may deem appropriate.

"(e) The proceeds from the amusement tax shall be shared equally by the province and the municipality where such amusement places are located."[u]

I AM OPEN TO CORRECTION/SUGGESTIONS OR VEHEMENT REACTION. I MIGHT BE WRONG. THAT IS JUST MY HUMBLE OPINION.

THE DEFINITIONS OF AMUSEMENT TAX UNDER SECTION 125 AND SECTION 126 OF THE TAX CODE DID NOT MENTION ANYTHING ABOUT BEACH RESORTS.

I would like to say a thank you for your replies, my understanding is it is the local city admin that is stating that I must pay the tax but what I have a problem with is that there are resorts in my city that are not registered resorts and have the same facilities that I have.
when I mentioned this after seeking advice from the city administrator the impression I got was that they did not know just how many inland resorts are in their city.
Also according to the city administrator the reason for the so called amusement tax is because I charge an entrance fee for persons coming into and using my facilities when I asked if this tax included the likes of internet cafes I was told that they were not included if not WHY?? they also charge person for going into cafe and using their fcility the same as myself.

ganito kasi iyan mr. apat in the real world.

ang LGU business bureau, ang BIR, Customs, and other similar revenue generating government agencies, hard pressed iyan sila magmeet s collection goal nila. if they cannot meet their collection goal, definitely me sanctions iyan sila. either matanggal sila s puwesto nila or me low rating sila s PES (personal evaluation sheet ) nila. s BIR at CUSTOMS, me attrition law iyan sila.

kaya sa point of view nila, gagawin nila lahat para makuha lang nila ang collection goal nila. sa legal na paraan, they will try their best to meet that goal by collecting taxes from regular transactions and by issuing assessment after assessment notices. however, they can also do more by PERSUASION lalo na pag walang clear na legal grounds. either oral or written iyan. iyong mga me legal grounds sila, in writing iyan. iyong alam nila na hindi mag hold iyan s courts , oral iyan. kumbaga, request lang iyan to pay . ang problema niyang request na iyan is namimilit konti iyan sila. pero hindi ibig sabihin na tama si city admimnistrator dahil nagsabi sya na liable ka. dapat isipin mo din saan ang legal basis niya. kaya nga, itanong mo kung saan ang legal basis niya para malaman mo din if magbayad ka ba talaga o hindi. try mo itanong ano legal basis niya s pag assessment ng amusement tax s beach resorts. ask him the specific legal provisions din.


iyang sabi ni city administrator is baka walang legal ground iyan. so what kung nagcharge ka ng entrance fee s customers na mag enter s resort mo. it does not change the nature of your business from beach resort to that mentioned under SECTION 140 OF RA 7160 (LOCAL GOVERNMENT CODE), as amended. definitely, hindi maging theater iyan, circus, boxing, cinema. iyong other places of amusement, hind kasali jan ang beach resort. sa rules on statutory construction, where merong ginaenumerate ang law at saka me sinabing and me words na "and other ", ang other na iyan should be similar to those enumerated. hindi ka puwedeng magextend by implication. ang cinema ba or theater same ba sa beach resort?

just bear in mind this rule for interpretation and application of tax laws:

"Tax burdens shall neither be imposed nor presumed beyond what the statutes expressly and clearly state because status should be construed strictly against the government. (CIR vs. CA, central vegetable mfg co, GR no. 122161, february 1999).

" a tax cannot be imposed without clear and express words for that purpose and the provisions of a taxing act are not to be extended by implication." ( Income Taxation by Edwin G. Valencia 5th edition -2009-2010)[u][u]

please refer your case to a real lawyer.

PHILIPPINE BASKETBALL ASSOCIATION, petitioner, vs. COURT OF APPEALS, COURT OF TAX APPEALS, AND COMMISSIONER OF INTERNAL REVENUE, respondents.


http://sc.judiciary.gov.ph/jurisprudence/2000/aug2000/119122.htm (pls click the abovementioned link)


The laws on the matter are succinct and clear and need no elaborate disquisition. Section 13 of the Local Tax Code provides:
"Sec. 13. Amusement tax on admission. -The province shall impose a tax on admission to be collected from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement xxx."
The foregoing provision of law in point indicates that the province can only impose a tax on admission from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement. The authority to tax professional basketball games is not therein included, as the same is expressly embraced in PD 1959, which amended PD 1456 thus:
"SEC. 44. Section 268 of this Code, as amended, is hereby further amended to read as follows:
‘Sec. 268. Amusement taxes. -- There shall be collected from the proprietor, lessee or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai, race tracks and bowling alleys, a tax equivalent to:
‘1. Eighteen per centum in the case of cockpits;
‘2. Eighteen per centum in the case of cabarets, night or day clubs;
‘3. Fifteen per centum in the case of boxing exhibitions;
‘4. Fifteen per centum in the case of professional basketball games as envisioned in Presidential Decree No. 871. Provided, however, That the tax herein shall be in lieu of all other percentage taxes of whatever nature and description;
‘5. Thirty per centum in the case of Jai-Alai and race tracks; and
‘6. Fifteen per centum in the case of bowling alleys of their gross receipts, irrespective of whether or not any amount is charged or paid for admission. For the purpose of the amusement tax, the term gross receipts’ embraces all the receipts of the proprietor, lessee or operator of the amusement place. Said gross receipts also include income from television, radio and motion picture rights, if any. (A person or entity or association conducting any activity subject to the tax herein imposed shall be similarly liable for said tax with respect to such portion of the receipts derived by him or it.)

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From the foregoing it is clear that the "proprietor, lessee or operator of xxx professional basketball games" is required to pay an amusement tax equivalent to fifteen per centum (15%) of their gross receipts to the Bureau of Internal Revenue, which payment is a national tax. The said payment of amusement tax is in lieu of all other percentage taxes of whatever nature and description.
[b]While Section 13 of the Local Tax Code mentions "other places of amusement", professional basketball games are definitely not within its scope[/b]. Under the principle of ejusdem generis, where general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned. [9] Thus, in determining the meaning of the phrase "other places of amusement", one must refer to the prior enumeration of theaters, cinematographs, concert halls and circuses with artistic expression as their common characteristic. [b]Professional basketball games do not fall under the same category as theaters, cinematographs, concert halls and circuses as the latter basically belong to artistic forms of entertainment while the former caters to sports and gaming.


COMMENT (HINDI ITO KASALI S SUPREME COURT DECISION): SAME S PROFESSIONAL BASKETBALL, DI BA ANG BEACH RESORT hindi rin kasali s artistic forms of entertainment? )
[[u]

siguro namali lang ang city administrator when he said na me 10% amusement tax kayo bayaran s beach resort niyo. definitely, hindi ho puwede iyan.


PERO if sinabi mo na na nag assess sila ng tax s beach resort , puwede ho iyan (basta hindi 10% na amusement tax)

ang municipality is empowered to impose a tax on any business ( [/u] (local tax). provided however that in case of any business subject to excise, VAT or percentage under the NIRC, the rate of the tax shall not exceed 2% of the gross sales or receipts for the preceding calendar year. cities are authorized specifically to impose taxes, fees and charges that provinces and municipalities may levy, at rates that may be above the maximum established for provinces and municipalities but not exceeding 50% of such maximum rates (except the rates of professional and amusement taxes).

in addition, the barangay may levy reasonable fees and charges on places of recreation which may charge admission fees (beach resort included).

S argao cebu , me council resolution sila. tabular ang tax nila. me fixed rate ang tax nila depende s gross receipts mo. ito ang sample nila

On Amusement Places or Amusement Devices:

1. Day and Night Club …………… 11,700.00
2. Day Club and Night Club ……………………. 5,200.00
3. Cocktail Lounge or Bar ……………………. 1,300.00
4. Cabaret, Dance or Ballroom Hall ……………………. 1,300.00
5. Bath House and/or Swimming Pool
Resort or other similar places …………………. 780.00
[u]

PARAGRAPH K - ON HOTELS, MOTELS, RESORTS, APARTELS, TOURIST INNS AND PENSION HOUSES

Section 19. DEFINITION OF TERMS – When used in this Code:


c. Resorts – any place or places with pleasant environment and atmosphere conducive to comfort, healthful relaxation and rest, offering food, sleeping accommodation and recreational facilities to the public for a fee or remuneration.


Section 20. RATE OF TAX – The tax on hotels, motels, resorts, apartels, tourist inns and pension houses shall be computed on the basis of the receipts for the preceding quarter in accordance with the following schedule:

GROSS RECEIPTS FOR THE AMOUNT OF TAX PER
PRECEDING QUARTER ANNUM

Less than P 2,500.00 ……………………………………………… P 39.00
2,500.00 or more but less than 5,000.00 60.00
5,000.00 or more but less than 7,500.00 83.00
7,500.00 or more but less than 10,000.00 104.00
10,000.00 or more but less than 12,500.00 125.00
12,500.00 or more but less than 15,000.00 146.00
15,000.00 or more but less than 17,000.00 161.00
17,000.00 or more but less than 20,000.00 187.00
20,000.00 or more but less than 22,500.00 208.00
22,500.00 or more but less than 25,000.00 229.00
25,000.00 or more but less than 30,000.00 278.00
30,000.00 or more but less than 35,000.00 328.00
35,000.00 or more but less than 40,000.00 377.00
40,000.00 or more but less than 45,000.00 426.00
45,000.00 or more but less than 50,000.00 476.00
50,000.00 or more but less than 55,000.00 525.00
55,000.00 or more but less than 60,000.00 575.00
60,000.00 or more but less than 65,000.00 624.00
65,000.00 or more but less than 70,000.00 673.00
70,000.00 or more but less than 75,000.00 723.00
75,000.00 or more but less than 82,000.00 770.00
82,000.00 or more but less than 90,000.00 816.00
90,000.00 or more but less than 97,000.00 863.00
97,000.00 or more but less than 105,000.00 910.00
105,000.00 or more but less than 112,000.00 957.00
112,000.00 or more but less than 120,000.00 1,006.00
120,000.00 or more but less than 127,000.00 1,050.00
127,000.00 or more but less than 135,000.00 1,097.00
135,000.00 or more but less than 142,000.00 1,144.00
142,000.00 or more but less than 150,000.00 1,191.00
150,000.00 or more but less than 160,000.00 1,243.00
160,000.00 or more but less than 170,000.00 1,295.00
170,000.00 or more but less than 180,000.00 1,347.00
180,000.00 or more but less than 190,000.00 1,394.00
190,000.00 or more but less than 200,000.00 1,451.00
200,000.00 or more but less than 210,000.00 1,503.00
210,000.00 or more but less than 220,000.00 1,555.00
220,000.00 or more but less than 230,000.00 1,607.00
230,000.00 or more but less than 240,000.00 1,659.00
240,000.00 or more but less than 250,000.00 1,711.00
250,000.00 or more but less than 275,000.00 1,820.00
275,000.00 or more but less than 300,000.00 1,927.00
300,000.00 or more but less than 325,000.00 2,036.00
325,000.00 or more but less than 350,000.00 2,150.00
350,000.00 or more but less than 375,000.00 2,311.00
375,000.00 or more but less than 400,000.00 2,369.00
400,000.00 or more but less than 425,000.00 2,478.00
425,000.00 or more but less than 450,000.00 2,587.00
450,000.00 or more but less than 475,000.00 2,696.00
475,000.00 or more but less than 500,000.00 2,805.00
For every P1,000.00 or fraction thereof
In excess of P500,000.00 …… P 3.00

In case of newly started business of hotels, motels, resorts, apartels, tourist inns, and pension houses, the initial tax for the quarter in which the business starts to operate shall not exceed ONE-FOURTH OF ONE TENTH OF ONE PERCENT OF THE CAPITAL investment but which shall not be less than P 50.00. In the succeeding quarter, the tax shall be based on the gross receipts for the preceding quarter.