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8/10/2019 Taxation Law Case Digests
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Case Digest for August 10, 2013
Victorias Milling v Victorias
Doctrine:"License tax" has not acquired a fixed meaning. It does not refer solely to a license for regulation. In many instances, it
refers to "revenue-raising exactions on privileges or activities." But, legally speaking, taxes are "for the purpose of raising
revenues," in contrast to license fees which are imposed "in the exercise of police power for purposes of regulation." Whenno
police inspection, supervision, or regulation is provided but any and all persons engaged in the business designated, without
qualification or hindrance are required to pay, the presumption is strong that the power of taxation, and not the police power, is
being exercised. Thus, the cost of regulation cannot be taken as a gauge, if the municipality intended to enact a revenue
ordinance.
Double taxation has been otherwise described as "direct duplicate taxation." 48 For double taxation to exist, "the same prope rty
must be taxed twice, when it should be taxed but once."
Facts:
1. Ordinance Amending Ordinance No. 25, Series of 1953 and Ordinance No. 18, Series of 1947 on Sugar Central by Increasing
the Rates on Sugar Refinery Mill by Increasing the Range of Graduated Schedule on Capacity Annual Output Respectively
was enacted pursuant to the taxing power granted by Commonwealth Act 472.
2. It requires persons and corpos operating sugar central or engaged in centrifugal sugar to pay annual municipal license tax
quarterly.
3.
Payment is based on annual output capacity. Progressively upward.4. Pet seeks the declaration of nullity of the ordinance bec:
a.
It exceeds the amounts fixed in Provincial Circular 12-A issued by theDoF
b. it is discriminatory since it singles out plaintiff which is the only operator of a sugar central and a sugar refinery
within the jurisdiction of defendant municipality;
c. it constitutes double taxation;
d.
the national government has preempted the field of taxation with respect to sugar centrals or refineries
5. RTC: a license tax should be limited to the cost of licensing, regulating and surveillance. If the defendant has the power to
tax the plaintiff for purposes of revenue, it may do so by proper municipal legislation, but not in the guise of a license tax
Issues:
1.
W/N the ordinance is a regulatory or revenue measure2. W/N the ordinance is a preemption of respondent from the natl govts power to impose percentage tax on sugar central
and refineries (NIRC Sec 189)
3. W/N it singles out petitioner
4. W/N there is double taxation since the cost of raw sugar is not deducted from the amount paid by the refinery
Ruling:
1. A. We rule that Ordinance No. 1, series of 1956 was promulgated not in the exercise of the municipality's regulatory power
but as a revenue measure a tax on occupation or business. It is within the power of the municipality to impose because
Commonwealth Act 472 grants respondent with that taxing authority.
B. It is not regulatory because its purpose is to raise revenue for the Municipality due to the heavy obligations whichconfront it because of the implementation of Minimum Wage Law on the salaries and wages it pays to its municipal
employees and laborers.
2. NO. The doctrine of preemption does not apply bec the tax imposed by the ordinace is not a percentage tax. The national
govt through Congress, in the wordings of CA 472, allowed municipalities to tax persons engaged in "the same businesses
or occupation" on which "fixed internal revenue privilege taxes" are "regularly imposed by the National Government."
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3. NO. Said ordinance is made to apply to any sugar central or sugar refinery which may happen to operate in the
municipality. The fact that plaintiff is actually the sole operator of a sugar central and a sugar refinery does not make the
ordinance discriminatory.
4. NO. The two taxes cover two different objects. Section 1 of the ordinance taxes a person operating sugar centrals or
engaged in the manufacture of centrifugal sugar. While under Section 2, those taxed are the operators of sugar refinery
mills. One occupation or business is different from the other.
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Villanueva v Iloilo
Doctrine: A real estate tax is a direct tax on the ownership of lands and buildings or other improvements thereon, not specially
exempted, and is payable regardless of whether the property is used or not, although the value may vary in accordance with such
factor.It is a fixed proportion of the assessed value of the property taxed, and requires, therefore, the intervention of assessors.
it constitutes a superior lien on and is enforceable against the property subject to such taxation, and not by imprisonment of the
owner.The same tax may be imposed by the national government as well as by the local government. License tax may be levied
upon a business or occupation although the land or property used in connection therewith is subject to property tax. At all
events, there is no constitutional prohibition against double taxation in PH. It is not favored but, provided some otherconstitutional requirement is not thereby violated, such as the requirement that taxes must be uniform.
Facts:
1. An Ordinance Imposing Municipal License Tax On Persons Engaged In The Business Of Operating Tenement Houses is being
questioned by petitioner
2. Before this case, SC has declared an earlier ordinance imposing license tax fees to tenement house operators null and void
for being ultra vires bec the charter of Iloilo did not clearly grant such authority to it
3. A similar ordinance was passed by resp believing that under the Local Autonomy Act, it now has authority to impose license
tax to tenement house operators
4. Pets are owners of 5 tenement houses w/43 apartments.
5. They wanted to declare the ordinance null for:
a.
It is an ultra vires as it imposes a levy "in excess of the one per centum real estate tax allowable under Sec. 38 ofthe Iloilo City Charter, Com. Act 158."5
b. unconstitutional for being violative of the rule as to uniformity of taxation
c.
for depriving said plaintiffs of the equal protection clause of the Constitution
6. RTC declared the ordinance null
Issues:
1. W/N it is illegal because it imposes double taxation
2. W/N resp is empowered by the Local Autonomy Act to impose tenement taxes
3. W/N it is oppressive and unreasonable because it carries a penal clause
4. W/N it violates the rule of uniformity of taxation
5. W/N it is an mere reproduction of the earlier ordinance declared by the Court null
Ruling:
1. NO. Although pets are taxable under the the NIRC as real estate dealers, and still taxable under the ordinance, double
taxation may not be invoked. The same tax may be imposed by the national government as well as by the local
government. There is nothing inherently obnoxious in the exaction of license fees or taxes with respect to the same
occupation, calling or activity by both the State and a political subdivision thereof.
Although pets are paying real estate tax and tenement tax, there is no double taxation bec the former is levied upon the
property while the latter is upon the use thereof for occupation.
2. YES. The Local Autonomy Act permits all chartered cities, municipalities and municipal districts to impose all municipal
license fees except those mentioned in the statute. The tax in question is not a real estate tax bec:a. It is not a tax on the land on which the tenement houses are erected, although both land and tenement houses
may belong to the same owner.
b. It is not a fixed proportion of the assessed value of the tenement houses, and does not require the intervention of
assessors or appraisers.
c. It is not payable at a designated time or date, and is not enforceable against the tenement houses either by sale or
distraint.
On the contrary, it is plain from the context of the ordinance that the intention is to impose a license tax on the operation
of tenement houses, which is a form of business.The ordinance finds authority in section 2 of the Local Autonomy Act
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which provides that chartered cities have the authority to impose municipal license taxes or fees upon persons engaged in
any occupation or business
3. NO. The Charter of Iloilo allows to the municipality to impose fines and imprisonment for violation of its ordinances. It is
not against the consti prohibition of imprisonment for non-payment of debt or poll tax bec tax is not a debt, so to speak
and is not a poll tax because the latter is a fixed tax on residents regardless of the property or occupation
4. UNTENABLE! Uniformity is met when all subjects of the same class are taxed at the same rate. And tenement house
operation constitutes a distinct class.
5. NO. The previous ordinance was enacted pursuant to the Iloilo Charter while the ordinance in question is pursuant to the
Local Autonomy Act
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Pepsi v Butuan
Facts:
1.
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