Pepsi-Cola Bottling Co.

v.

Municipality of Tanauan

G.R. L-31156

PARTIES

Pepsi Cola is a domestic

corporation with offices and

principal place in the Quezon

City,

Municipality of Tanauan Leyte

is a municipal corporation

headed by the City Mayordefendant in this case.

FACTS

Levies and collects from

softdrinks manufactures and

producers a tax of

1/16 of a centavo for every

bottle of soft drinks

ISSUES &

RULING

Ordinance 23 Ordinance 27

Levies and collects from

softdrinks manufactures and

producers a tax of

P0.01 or once centavo on each

gallon of volume capacity.

These taxes are denominated as Municipal Production Tax

In this case, petitioners allege

that RA 2264 (2) is

unconstitutional because the

municipalitys power to tax is an undue delegation of the

taxing authority.

They also consider both

ordinances as illegal since they

constitute double taxation

Is the Municipality of

Tanauan not

empowered to tax?

The general rule is that taxation is vested to the

legislative authority.

However, because of doctrine of necessary

implication, municipal corporations are

empowered to tax since it as granted by the

Constitution, the local government has the

autonomous authority to create their own sources

of revenue and to levy taxes.

Does Ordinance 23 &

27 constitute double

taxation?

NOthe intention of the Municipality of Tanauan is to repeal Ordinance 23, even without express

words to that effect. The municipality is clear that

they only sought to enforce Ordinance 27

In this case, the Court noted that a sales tax is

void since it is beyond the municipalitys powers to exercise; but in this case Ordinance 27 taxes

the number of production and not on the saleswhich is allowable within the municipalitys powers.

G.R. L-31156 Pepsi Cola v. Municipality of Tanauan.vsdPage-1