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FINALS 03.04 - TIME, MANNER, AND PLACE OF PAYMENT OF LOCAL BUSINESS TAX -…

- - - - 3. IN CASE OF RETIREMENT OF BUSINESS
        
        TERMINATE -> SWORN STATEMENT OF GROSS SALES/RECEIPTS
        SECTION 145. Retirement of Business. – A business subject to tax pursuant to the preceding sections shall, upon termination thereof, submit a sworn statement of its gross sales or receipts for the current year.
        
        DEFICIENCY -> BEFORE OFFICIAL RETIRE
        If the tax paid during the year be less than the tax due on said gross sales or receipts of the current year, the difference shall be paid before the business is considered officially retired.
      - JANUARY 1ST -> ACCRUAL
        SECTION 166. Accrual of Tax. – Unless otherwise provided in this Code, all local taxes, fees, and charges shall accrue on the first (1st) day of January of each year.
        
        NEW TAX -> NEXT QUARTER'S 1ST
        However, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates.
    - - JANUARY 1ST -> ACCRUAL
        SECTION 166. Accrual of Tax. – Unless otherwise provided in this Code, all local taxes, fees, and charges shall accrue on the first (1st) day of January of each year.
        
        20 FIRST Ds
        JANUARY
        SECTION 167. Time of Payment. – Unless otherwise provided in this Code, all local taxes, fees, and charges shall be paid within the first twenty (20) days of January...
        
        JUST REASON -> EXTENSION
        6-MONTHS MAX
        The sanggunian concerned may, for a justifiable reason or cause, extend the time for payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months.
        
        20 FIRST Ds of
        QUARTER
        ...or of each subsequent quarter, as the case may be.
        
        UNLESS OTHERWISE
        PROVIDED
        
        NEW TAX -> NEXT QUARTER'S 1ST
        However, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates.
      - UNLESS OTHERWISE PROVIDED
  - - - 1. LOCATION OF BRANCH OR SALES OUTLET
        
        2. ALLOCATION TO 2 OR MORE LGUs
        
        3. SALES BY ROUTE TRUCKS or VANS
        
        ROUTE SALES IN LGU-SALES BRANCH
        SALES :!: LGU
        ● Route sales made by trucks, vans or vehicles utilized for this purpose in a locality where a manufacturer, producer, wholesaler, retailer or dealer has a branch, sales office or warehouse, shall be recorded in such branch, sales office or warehouse and the tax due thereon be paid to the local government unit where such branch, sales office or warehouse is located. Art. 243(d), IRR of the LGC of 1991
        
        ROUTE SALES IN LGU-
        NO SALES BRANCH
        WITHDRAWN :!: LGU
        ● Route sales made by trucks, vans or vehicles in a locality where a manufacturer, producer, wholesaler, retailer or dealer has no branch, sales office or warehouse, shall be recorded in the branch, sales office or warehouse from where such route trucks, vans and other vehicles withdraw their products for sale, and the tax due on such sales be paid to the local government unit where such branch, sales office or warehouse is located. Ibid.
        
        SALES ALLOCATION APPLIES TO:
        
        MANUFACTURERS
        
        ASSEMBLERS
        
        CONTRACTORS
        
        PRODUCERS
        
        EXPORTERS with
        a. FACTORIES
        b. PROJECT OFFICES
        c. PLANTS
        d. PLANTATIONS
        
        IN PURSUIT OF THEIR BUSINESS
        (b) The following sales allocation shall apply to manufacturers, assemblers, contractors, producers, and exporters with factories, project offices, plants, and plantations in the pursuit of their business:
        
        30% SALES REC IN P.O.
        BY PO'S :!: CITY/MUNI
        (1) Thirty percent (30%) of all sales recorded in the principal office shall be taxable by the city or municipality where the principal office is located; and
        70% SALES REC IN P.O.
        BY FACTORY'S :!: CITY/MUNI
        (2) Seventy percent (70%) of all sales recorded in the principal office shall be taxable by the city or municipality where the factory, project office, plant, or plantation is located.
        
        DIFF LOC
        FACTORY-PLANTATION
        (c) In case of a plantation located at a place other than the place where the factory is located, said seventy percent (70%) mentioned in subparagraph (b) of subsection (2) above shall be divided as follows:
        
        60% FACTORY'S :!: CITY/MUNI
        (1) Sixty percent (60%) to the city or municipality where the factory is located; and
        
        40% PLANTA'S :!: CITY/MUNI
        (2) Forty percent (40%) to the city or municipality where the plantation is located.
        
        VOLUME PRO-RATING
        MULTI-FACTORIES/PLANTATIONS
        (d) In cases where a manufacturer, assembler, producer, exporter or contractor has
        two (2) or more factories, project offices, plants, or plantations
        located in different localities,
        the seventy percent (70%) sales allocation mentioned in subparagraph (b) of subsection (2) above shall be
        prorated among the localities where the factories, project offices, plants, and plantations are located
        in proportion to their respective volumes of production during the period for which the tax is due.
        
        NOT SALES-BASED
        (e) The foregoing sales allocation shall be applied irrespective of whether or not sales are made in the locality where the factory, project office, plant, or plantation is located.
        
        NOT SALES-BASED
        Regardless of where the sales occur, these are based on where the factories/plantations are.
        
        METHOD
        
        SALE BRANCH, SALE BRANCH
        
        IF NO BRANCH, 30-70 ALLOCATION
        a. NOT SALES-BASED
        (REGARDLESS IF SAME AS FAC/PLANT)
        Don’t forget the basic rule first, that the sale shall be taxable in the place where the sale is made. You use the allocation when faced with the scenario where there is no branch making that sale, and all the sales are recorded in the principal office, but the factory or plantation is located elsewhere.
        
        APPLIES TO
        "TOLL MANUFACTURERS"
        In case of manufacturers or producers that engage the services of independent contractors, otherwise known as “toll manufacturers”, to
        produce or manufacture some or all of their products on their behalf,
        the factory or plant and warehouse of the contractor or toll manufacturer
        utilized for the production and storage of the manufacturer’s products shall be considered as the factory and plant and warehouse of the manufacturer, and the rules on situs of taxation as stated above shall apply. Art. 243(7), IRR of the LGC of 1991
        
        SALES BRANCH/OUTLET
        WHERE: RECORD, ACCRUE, & PAY
        SECTION 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.
        
        NO BRANCH/SALES OUTLET -> PO
        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.
        
        SIR: EVERY PLACE OF SALE
        As a rule, where does it pay its local business tax? In every city or municipality where it has a branch that sells goods.
        EACH LGU IS LIMITED TO TJ
        Only the sales made within each territorial jurisdiction of each LGU are taxable by such each LGU
      - NO-SALE OUTLETS
        
        SHOWROOMS
        
        DISPLAY ROOMS
        (But,) those offices used merely as showrooms or display areas of the products and where no stocks or items are stored for sale are not considered as branch or sales offices, even if they take or receive orders therein for their products.
        [SIR]
        
        DISPLAY ONLY BUT TAKES ORDERS
        This is when you walk in, and want to order an item, and they cannot sell it to you because they do not have stock there.
        
        Of course, they can take your order and tell you that they will deliver the product (or the appliance) within a certain number of days
        
        WAREHOUSE ACCEPTING ORDERS
        A warehouse that accepts orders and/or issues sales invoices independent of a branch with sales office shall be considered as a “sales office”, and therefore, the sales therein will be taxable, ●
        Otherwise, if it does not accept orders and/or issue sales invoices as aforementioned, then it shall not be considered a branch or a sales office.
        A warehouse refers to “a building utilized for the storage of products for sale and from which goods or merchandise are withdrawn for delivery to customers or dealers, or by persons acting on behalf of the business.” Art. 243(3), IRR of the LGC of 1991
      - RP + LBT CONFLICT/
        TJ OVERLAP -> LOCATION IN OCT/TCT
        The location stated in the certificate of title should be followed until amended through proper judicial proceedings under PD 1529.
        [Cainta v. Pasig]
    - - (a) The taxes imposed under Section 143 shall be payable for every separate or distinct establishment or place where business subject to the tax is conducted and one line of business does not become exempt by being conducted with some other businesses for which such tax has been paid. The tax on a business must be paid by the person conducting the same.
        
        (b) In cases where a person conducts or operates two (2) or more of the businesses mentioned in Section 143 of this Code which are subject to the same rate of tax, the tax shall be computed on the combined total gross sales or receipts of the said two (2) or more related businesses.
        
        (c) In cases where a person conducts or operates two (2) or more businesses mentioned in Section 143 of this Code which are subject to different rates of tax, the gross sales or receipts of each business shall be separately reported for the purpose of computing the tax due from each business.