LOCAL BUSINESS TAXES & REAL PROPERTY TAX

Atty. Vic C. Mamalateo July 14, 2011 ATENEO LAW SCHOOL

SCOPE OF PRESENTATION
BOOK II: LOCAL TAXATION AND FISCAL MATTERS
TITLE ONE: LOCAL GOVERNMENT

TAXATION
TITLE TWO: REAL PROPERTY TAXATION

LOCAL BUSINESS TAXES

Constitutional Basis Each local government unit shall have the power to create its own sources of revenue and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the local governments (Sec. 5, Art. X, 1987 Constitution; Sec. 129, LGC). However, local governments have no power to tax instrumentalities of the National Government like PAGCOR. This doctrine emanates from the supremacy of the National Government over local governments. The power to tax cannot be allowed to defeat an instrumentality or creation of the very entity which has the inherent power to wield it. Local government in such a system can only mean a measure of decentralization of the function of government (Basco v. PAGCOR). To implement the constitutional provision, Congress enacted RA 7160 (Local Government Code), effective Jan. 1, 1992.

LOCAL BUSINESS TAXES

FUNDAMENTAL PRINCIPLES
Taxation shall be uniform in each local government unit Taxes, fees, and charges shall be equitable and based as far as practicable on taxpayers ability to pay; levied and collected only for public purposes; not be unjust, excessive, oppressive or confiscatory; not be contrary to law, public policy and national economic policy, nor in restraint of trade The collection of local taxes, fees, charges and other impositions shall in no case be let to any private person The revenue collected under the Code shall inure solely to the benefit of, and subject to disposition by, the local government unit levying the tax, fee, charge or other imposition, unless otherwise specifically provided for in the Code; and Each LGU shall, as far as practicable, evolve a progressive system of taxation (Sec. 130, LGC).

LOCAL BUSINESS TAXES

Tax shall not otherwise specifically enumerated in LGC or in the NIRC, and the tax ordinance shall not be enacted without any prior public hearing conducted for the purpose (Sec. 186, LGC). Although the Sanggunian had the control of records or the better means of proof regarding the facts (that no public hearing was held) alleged, petitioners are not relieved from the burden of proving their averments (People v. Pajenado, 31 SCRA 812). Proof that public hearings were not held falls on petitioners shoulders (Reyes v. CA, 320 SCRA 486).

LOCAL BUSINESS TAXES

COMMON LIMITATIONS ON LGUs
Unless otherwise provided, the exercise of the taxing powers of LGUs shall not extend to the levy of the following: Income tax, except when levied on banks and other financial institutions Documentary stamp tax Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis causa, except as otherwise provided in the Code Customs duties, registration fees of vessels, etc. Taxes, fees and charges and other impositions upon goods carried into or out of, or passing through, the territorial jurisdictions of local government units in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon such goods or merchandise

LOCAL BUSINESS TAXES

COMMON LIMITATIONS ON LGUs
Taxes, fees and charges on agricultural and aquatic products when sold by the marginal farmers or fishermen Taxes on business enterprises certified to by the BOI as pioneer or non-pioneer for a period of 6 and 4 years, respectively, from the date of such registration Excise taxes on articles enumerated under NIRC and taxes, fees or charges on petroleum products Percentage tax or VAT on sales or exchanges of goods or services or similar transactions thereon, except as otherwise provided herein Taxes on gross receipts of transportation contractors and persons engaged in the transportation of passengers or freight for hire and common carriers by air, land or water, except as provided for in this Code Taxes on premiums paid for reinsurance or retrocession

LOCAL BUSINESS TAXES

COMMON LIMITATIONS ON LGUs
Taxes, fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the driving thereof, except tricycles Taxes, fees or charges on Philippine products actually exported, except as provided for in this Code Taxes, fees or charges on Countryside Business and Barangay Enterprises and on cooperatives duly organized and registered under RA 6810 and 6938 Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, and local governments (Sec.
133, LGC).

LOCAL BUSINESS TAXES

NIRC levies an excise tax on all quarry resources, regardless of origin, whether extracted from public or private land. However, Sec. 138, LGC expressly authorizes the provinces to impose excise tax on quarry resources extracted from public lands (Prov of Bulacan v. CA,
299 SCRA 442 (1998).

The 6-year tax holiday provided under Sec. 133(g) of LGC should commence on the date of its registration with BOI, not from the commencement of its actual commercial operations as certified to by the BOI (supra). Grantee of pipeline concession is a common carrier under the Civil Code and is exempt from local business tax under Sec. 133(j), LGC (First Phil Industrial Corp v CA, 300 SCRA 661 (1998). A common carrier is one who holds himself out to the public as engaged in the business of transportation of persons or property from place to place, for hire or compensation, offering services to all persons who may choose to employ and remunerate him. The true test is whether it is the legal duty to carry for all alike (US v Quinajon, 31 Phil 187; RA 386).

LOCAL BUSINESS TAXES

Sec. 133(e), RA 7160 prohibits the imposition, in the guise of wharfage, of fees as well as all other taxes or charges in any form whatsoever on goods or merchandise. It is irrelevant if the fees imposed are actually for police surveillance on the goods, because any other form of imposition on goods passing thru the territorial jurisdiction of the municipality is clearly prohibited by Sec. 133(e). Under Sec. 131(y), wharfage is defined as a fee assessed against the cargo of vessel based on quantity or weight. It is apparent that a wharfage does not lose its basic character by being labeled as a service fee for police surveillance on all goods (Palma Dev Corp v. Mun of Malangas, Zambo
del Sur, 413 SCRA 572 (2003).

Petron Corp v. Mayor of Navotas

FACTS Petron maintains a depot or bulk plant at Navotas Fishport complex and sells diesel fuels to vessels used in commercial fishing around Metro Manila. Navotas enacted Ordinance 92-03 (New Navotas Revenue Code) imposing business taxes on persons engaged in the sale of petroleum products. On Mar 1, 2002, Petron received assessment for P6.2 M. Petron protested assessment, but this was denied by Navotas Treasurer. It was followed by Final Demand to Pay from the Mayor within 5 days; otherwise, depot would be closed. Petron thru counsel replied to the Mayor, but the Mayor did not respond to this last letter. On May 20, 2002, Petron filed with Malabon RTC a complaint for cancellation of assessment for deficiency taxes with prayer for TRO. TRO was not issued by RTC upon manifestation of respondents that they would not proceed with closure until RTC shall have decided on the merits. However, case was pending, respondents refused to issue permits.

Petron Corp v. Mayor of Navotas

Petron thus filed supplemental complaint with Preliminary Mandatory Injunction. On May 5, 2003, RTC rendered decision dismissing Petrons complaint. Malabon RTC declared Art 232(h) of IRR void because the Code purportedly does not contain a provision prohibiting the imposition of business taxes on petroleum products. 11 days later, Petron received Closure Order. Petron sought TRO but was denied. MR filed by Petron, but was also denied. Petron went directly to SC on pure legal question the correct interpretation of Sec 133(h) of LGC and applicability of Art 343(h) of IRR. On Aug 4, 2003, SC issued TRO.

Petron Corp v. Mayor of Navotas

SC DECISION Sec. 133 prescribes the limitations on capacity of LGUs to exercise their taxing powers. Paragraph (h) of Sec 133 mentions 2 kinds of taxes which cannot be imposed by LGUs, namely: (a) excise tax on articles under NIRC, and (b) taxes, fees or charges on petroleum products. Art 232 of IRR enumerates list of businesses subject to business taxes and paragraph (h) thereof does not allow imposition of local business taxes on any business not otherwise specified in the preceding paragraphs which the sanggunian concerned may deem proper to tax, but subject to this qualification any business engaged in the production, distribution or sale of oil, gasoline and other petroleum products shall not be subject to any local tax imposed on this article. Petron argues that business taxes on its sale of diesel fuels partakes of an excise tax, which is a tax upon the performance, carrying on, or the exercise of an activity. Malabon Mayor argues

Petron Corp v. Mayor of Navotas

that what the provision prohibits is the imposition of excise taxes on petroleum products, but not the imposition of business taxes on the same, relying on the Court statement that a tax on business is distinct from a tax on the article itself. The meaning of excise tax has undergone a transformation, morphing from the Am Jur definition to its current signification which is a tax on certain specified goods or articles. As Nolledo pointed out, excise taxes are imposed directly on certain specified goods; they are taxes on property. An excise tax is not excise where it does not subject directly the produce or goods to tax but indirectly as an incident to, or in connection with, the business to be taxed. It is this concept of excise tax which we can reasonably assume that Congress had in mind and actually adopted when it crafted the Code. On second issue, the Court said there is no doubt that following the 1987 Constitution and the LGC, the fiscal autonomy of LGUs has

Petron Corp v. Mayor of Navotas

received greater affirmation than ever. Thus, respondent cites that in City Government of San Pablo v. Reyes, the SC stated in interpreting statutory provisions on municipal fiscal powers, doubts will have to be resolved in favor of municipal corporations. Such policy is also echoed in Sec 5(a) of the LGC, which states that any provision on a power of LGU shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower LGU. However, Sec 5(b) proceeds that in case of doubt, any tax ordinance or revenue measure shall be construed strictly against the LGU enacting it, and liberally in favor of the taxpayer. Evidently, local fiscal autonomy should not necessarily translate into abject deference to the power of local government units to impose taxes. Congress has the constitutional authority to impose limitations on the power to tax of LGUs, and Sec. 133 of LGC is one such limitation. The provision is the explicit statutory impediment to the enjoyment of absolute taxing power by LGU, not to mention the reality that such power is a delegated power. Another example is Sec 133(g), where LGUs are disallowed from levying business taxes on enterprises certified by BOI.

Petron Corp v. Mayor of Navotas

The phrase taxes, fees or charges on petroleum products does not qualify the kind of taxes, fees or charges. The absence of such qualification leads to the conclusion that all sorts of taxes on petroleum products, including business taxes, are prohibited by Sec 133(h), LGC. Where the law does not distinguish, we should not distinguish. The earlier reference in paragraph (h) to excise taxes comprehends a wider range of subjects of taxation (all excisable products), while the later reference to taxes, fees or charges pertains only to one class of articles, specifically petroleum products. Oil is a commodity whose supply and price affect the ebb and flow of the lifeblood of the nation. Its shortage of supply or a slight, upward spiral in its price shakes our economic foundation. There is an inevitable link between the fluctuation of oil prices and the prices of every other commodity. Subjecting petroleum products to business taxes apart from the taxes already imposed by Congress in this age of deregulation would lead to the same result had they been taxed during the era of oil deregulation.

Petron Corp v. Mayor of Navotas

While Sec 133(h), LGC does not generally bar the imposition of business taxes on articles burdened by excise taxes under the NIRC tobacco, alcohol, mineral and miscellaneous products, it specifically prohibits LGUs from extending the levy of any kind of taxes, fees or charges on petroleum products (Petron v. Malabon City, 2009).

LOCAL BUSINESS TAXES

TAXES THAT MAY BE IMPOSED BY PROVINCES Tax on transfer of real property ownership (Sec. 135)
Maximum rate is of 1% of valuable consideration. Transfer of real property must be reported within 60 days from execution of transfer document (Sec. 135, RA 7160). This transfer tax shall not apply to any sale or transfer of agrarian land pursuant to RA 6657 (Comprehensive Agrarian Reform Law). Rate shall not exceed 50% of 1% of annual gross receipts for preceding calendar year Gross receipts has same meaning in Tax Code, but deposits, excise tax and VAT are excluded (Sec 131, RA 7160). For newly started business, tax shall not exceed 1/20 of 1% of capital investments. Receipts from printing of books and reading materials prescribed by DECS as school texts or references are exempt. Franchise is a right or privilege, affected with public interest conferred upon the private person or corporation under such terms and conditions as the government and its political subdivision may impose in the interest of public welfare, security and safety. Same rules as in Sec. 136, except exemption by DECS on school texts or references.

Tax on business of printing and publication (Sec. 136)

Franchise tax (Sec. 137)

LOCAL BUSINESS TAXES

Tax on sand, gravel and other quarry resources (Sec. 138)
Maximum rate shall not be more than 10% of FMV of materials extracted from public lands or from beds of seas, rivers, and other public waters within the territorial jurisdiction of LGU. Permit shall be issued exclusively by Provincial Governor, pursuant to an ordinance by Sanggunian Panlalawigan. Proceeds of tax shall be distributed to province, 30%; component city or municipality, 30%, and barangay, where materials are extracted, 40%. Province has no power to impose tax on quarry resources extracted from private land (Lee v. Pres Judge, 145 SCRA 408) in view of the limitations imposed by Secs 133 and 151 of the NIRC (Zamboanga Electric Coop v. Buat, 243 SCRA 47).

Professional tax

(Sec. 139)

Professional is one who passes required government examination. Tax shall not exceed P300; it must be paid on or before Jan 31 of January. Person who has paid professional tax shall be entitled to practice his profession in any part of the Phil.

Amusement tax

(Sec. 140)

Annual fixed tax for every delivery truck or van of manufacturers or producers, wholesalers of, dealers or retailers in, certain products (Sec. 141).

LOCAL BUSINESS TAXES

Sec. 13 of Local Tax Code mentions other places of amusement, professional basketball games are definitely not within its scope.
Principle of ejusdem generis (general words are to be held as applying only to persons or things of the same kind or class as those specifically mentioned). One must refer to the prior enumeration of theaters, cinematographs, concert halls and circuses with artistic expression as their common characteristics. Basketball caters to sports and gaming. Even up to the present, category of amusement taxes on professional basketball games as a national tax (Sec. 125, NIRC) remains the same. Sec. 140 of LGC retains the same areas where provinces may levy amusement tax without including professional basketball games (PBA v. CA, 337 SCRA 358 (2000).

Iloilo City v. Smart Communications

But RA 7294 does not expressly provide what kind of taxes SMART is exempted from. It is not clear whether the n lieu of all taxes provision in the franchise would include exemption from local or national taxation. And the uncertainty of the clause in RA 7294 must be construed strictly against SMART which claims the exemption. The proviso in first paragraph of Sec 9 states it will continue to be liable for income taxes. Second paragraph states the filing of tax returns and payment of taxes to CIR, and such returns shall be subject to audit by BIR. Nothing is mentioned in Sec 9 about local taxes. The clear intent is for the in lieu of all taxes clause to apply only to taxes under the NIRC and not to local taxes (City of Iloilo v. SMART Communications, GR 167260,
Feb 27, 2009).

Good faith and honest belief that one is not subject to tax on the basis of previous interpretation of government agencies are sufficient justification to delete the imposition of surcharges and interest. In 1998, BLGF opined SMART should be considered exempt from tax. But in 2001 case, PLDT v. City of Davao, we declared that we do not find BLGFs interpretation of local tax laws to be authoritative and persuasive. Its function is merely to provide consultative services and technical assistance to LGUs. Unlike the CIR who has been given the express power to interpret the Tax Code, no such power is given to the BLGF. SMARTs reliance on BLGF interpretation was thus misplaced. Therefore, SMART is liable to pay surcharge and interest.

LOCAL BUSINESS TAXES

BUSINESS TAXES IMPOSED BY MUNICIPALITIES Manufacturers, assemblers, repackers, processors, etc. of any article of commerce of whatever kind or nature [Sec. 143(a)] Wholesalers, distributors, or dealers in any article of commerce Exporters, and manufacturers, millers, producers, wholesalers, etc. of essential commodities [Sec. 143] Retailers [Sec. 143(d)] Contractors [Sec. 143(e)] Banks and other financial institutions [Sec. 143(f)] Peddlers of any merchandise or article of commerce [Sec. 143(g)] Any business, not otherwise specified above. On any business subject to excise, VAT, or percentage tax under the NIRC, the rate shall be 2% of gross sales or receipts [Sec. 143(h)] Municipalities within MMA may levy taxes at rates not exceeding 50% of maximum rates prescribed above (Sec. 144, LGC).
[Sec. 143(b)]

LOCAL BUSINESS TAX

Sec. 4(k) of RA 4850 (LLDA Charter), PD 813, and EO 927 specifically provide that LLDA shall have exclusive jurisdiction to issue permits for use of all surface water for any projects or activities in or affecting said region, including navigation, construction and operation of fishpens, fish enclosures, corrals and the like. On the other hand, RA 7160 (LGC) has granted to municipalities the exclusive authority to grant fishery privileges in municipal waters. SC held RA 7160 do not necessarily repeal aforementioned laws. RA 7160 does not contain any express provision which categorically repeal the charter of LLDA. RA 4850 is a special law and RA 7160 is a general law. The enactment of a later law which is a general law cannot be construed to have repealed a special law, unless the intent to repeal or alter is manifest. The special law should prevail since it evinces the legislative intent more clearly than a general statute. Besides, the implementation of a cohesive and integrated lake water resource management policy is necessary to conserve, protect and sustainably develop Laguna de Bay (LLDA v. CA, 251
SCRA 42).

LOCAL BUSINESS TAXES

BUSINESS TAXES IMPOSED BY CITIES Except as otherwise provided in this Code, cities may levy the taxes, fees and charges which the province or municipality may impose, provided that taxes, fees and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code. The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than 50%, except the rates of professional and amusement taxes (Sec. 151, LGC).

LOCAL BUSINESS TAXES

REVIEW OF TAX ORDINANCES
Within 3 days after its approval, copies of the approved tax ordinance of the municipality or city shall be furnished to the provincial Sanggunian, and in the case of barangay ordinances, within 10 days from enactment, copies shall be forwarded to the municipal Sanggunian, or the city Sanggunian, for review of the ordinance (Sec. 56-57, LGC). The provincial or city or municipal Sanggunian shall review the tax ordinance within 30 days after receipt of a copy thereof. If, within the 30 day period, the provincial, municipal or city Sanggunian takes no action, the tax ordinance shall be deemed approved. If they find the barangay ordinance inconsistent with the law or city/municipal ordinance, the Sanggunian shall return the same with recommendations, in which case the barangay ordinance is suspended until such time the revision called for is effected (Sec. 57, LGC).

LOCAL BUSINESS TAXES

EFFECTIVITY OF ORDINANCES (Sec. 59, LGC)
Unless otherwise stated in the ordinance, the same shall take effect after 10 days from date a copy thereof is posted in all bulletin board at the entrance of the provincial capitol or city, municipal, or barangay hall, and in at least 2 other conspicuous places in the LGU concerned. The secretary to the sanggunian shall cause the posting not later than 5 days after approval thereof. The text of the ordinance shall be disseminated and posted in Filipino or English and in the language or dialect understood by the majority of the people in the LGU, and the secretary shall record such fact in a book kept for the purpose. Gist of all ordinances with penal sanctions shall be published in a newspaper of general circulation within the province where the

LOCAL BUSINESS TAXES

EFFECTIVITY OF ORDINANCES local legislative body belongs, and in its absence, posting shall be made in all municipalities and cities of the province where the sanggunian of origin is situated. In the case of highly urbanized and independent component cities, the main features of the ordinance duly enacted shall, in addition to being posted, be published once in a local newspaper of general circulation within the city: Provided, That in the absence thereof, the ordinance shall be published in any newspaper of general circulation.

LOCAL BUSINESS TAXES

TESTS OF VALID ORDINANCE

It must not contravene the Constitution or any statute It must not be unfair or oppressive It must not be partial or discriminatory It must not prohibit but may regulate trade It must be general and consistent with public policy; and It must not be unreasonable (Magtajas v. Pryce Properties Corp, 234 SCRA 225).

LOCAL BUSINESS TAXES

APPEAL TO SECRETARY OF JUSTICE Any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within 30 days from the effectivity thereof to the Secretary of Justice, who shall render a decision within 60 days from the date of receipt of the appeal. The appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee or charge levied therein. Within 30 days after receipt of the decision or the lapse of 60-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file the appropriate proceedings with a court of competent jurisdiction (Sec. 187, LGC) within 30 days.

LOCAL BUSINESS TAXES

The Secretary of Justice can only review the constitutionality or legality of the tax ordinance. If warranted, he can revoke it on either or both grounds, but he cannot substitute his own judgment for the local government (Drilon v. Lim, 235 SCRA 135). The three (3) periods in Sec. 187, LGC are mandatory (Hagonoy Market Vendors Asso v. Mun of Hagonoy, GR 137021, Feb 6, 2002). The power to tax is the most effective instrument to raise needed revenue. Any delay in implementing tax measures would be to the detriment of the public; hence, protests over tax ordinances are required to be done with certain time frames (Mactan Cebu Intl Airport v Marcos, 261 SCRA 667). The 3 separate periods are prerequisites before seeking redress in court (Reyes v CA, GR 118233, Dec 10, 1999) and are set to prevent delays as well as enhance the orderly and speedy discharge of judicial functions.

LOCAL BUSINESS TAXES

ACCRUAL AND PAYMENT OF TAX
Local taxes, fees and charges accrue on the first day of the calendar year. In case the effectivity of a new tax ordinance falls on any date other than the beginning of the quarter, the same shall be considered as falling at the beginning of the next ensuing quarter and the new tax levy or revised rate due shall begin to accrue therefrom (Sec. 166, LGC). The tax period of local taxes, fees and charges shall be the calendar year, except when otherwise provided in the Code (Sec. 165, LGC), and such levies may be paid on quarterly installments within 20 days of each subsequent quarter. The time for payment may be extended by the Sanggunian concerned, without surcharges or penalties, but only for a period not exceeding six months (Sec. 167, LGC). The sanggunian may impose a surcharge of 25% of the unpaid amount and 2% interest on unpaid taxes, but not to exceed 36 months (Sec. 168, LGC).

LOCAL BUSINESS TAXES

For any delinquency, the Sanggunian may impose surcharges of not exceeding 25% of the amount due and interest at a rate not exceeding 2% per month until the delinquent amount is fully paid but not to exceed a total interest corresponding to 36 months (Sec. 168,
LGC).

The non-payment of the tax liability on its due date subjects the taxpayer to corresponding surcharge and interest. The execution of a promissory note by a taxpayer and its acceptance by the City Treasurer did not relieve the taxpayer from its liability to pay the surcharge and interest. The PN binds the taxpayer but does not constitute a contract so as to bar the city government from suing the taxpayer for collection of tax liability (Pajaro v. Sandiganbayan).

LOCAL BUSINESS TAXES

The City of Pasig is authorized to impose business tax on contractor based on gross receipts. Thus, when the city assessed deficiency business tax based on taxpayers gross revenue as reported in financial statements, it committed a palpable error. It would result in double taxation (Ericsson Telecommunications v. City of Pasig, GR 176667, Nov. 22, 2007).

LOCAL BUSINESS TAXES

SITUS OF THE TAX
For the collection of taxes under Sec. 143 of this Code, manufacturers, contractors, etc. maintaining or operating branch or sales outlets 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 (where the principal office is located).

LOCAL BUSINESS TAXES

SITUS OF THE TAX
The following sales allocation shall apply to manufacturers, contractors, producers, and exporters with factories, project offices, plants, and plantations in the pursuit of their business:
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% 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.

In case a plantation located at a place other than the place where the factory is located, said 70% above shall be divided as follows:
60% to the city or municipality where the factory is located; and 40% to the city or municipality where the plantation is located

LOCAL BUSINESS TAXES

SITUS OF THE TAX In case where a manufacturer, assembler, producer, exporter or contractor has 2 or more factories, project offices, plants or plantations located in different localities, the 70% sales allocation shall be pro-rated 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. 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 (Sec. 150, LGC). Branch a place which conducts operations of the business as an extension of the principal office. Warehouse that accepts orders/or issues sales invoices independent of a branch with sales office is a sales office. But an office used only as display area of the products where no stocks or items are stored for sale, although orders for the products may be received thereat, is not a branch or sales office.

LOCAL BUSINESS TAXES

REMEDIES OF LGU FOR COLLECTION OF TAX Administrative remedy
Tax lien, and distraint and levy

Judicial remedy
Civil action

PRESCRIPTIVE PERIOD To assess:

Without fraud, 5 years from the date they became due In case of fraud, 10 years from discovery of fraud or intent to evade payment. This period may be suspended when (a) the Treasurer is legally prevented from making the assessment or collection; (b) taxpayer requests for reinvestigation and executes a waiver in writing before expiration of period; and taxpayer is out of the country or otherwise cannot be located (Sec. 194(d), LGC).

To collect:
No action for collection of the tax shall be instituted after the expiration of such period (5 years) without such assessment having been made

LOCAL BUSINESS TAXES

REMEDIES OF TAXPAYERS Prior to assessment
Question constitutionality or legality of ordinance (e.g., tax is unjust, confiscatory or oppressive) by filing an administrative appeal to Secretary of Justice within 30 days from date of effectivity (Sec. 187) Action for declaratory relief

After an assessment
Protest of the assessment within sixty (60) days from receipt of assessment (Sec. 195, LGC) Action for refund within 2 years from date of payment (Sec. 196, LGC) Injunction against the collection of tax. Unless such suit is forbidden by statute, a court of equity generally will interfere to prevent by injunction the collection of wrongful taxes, provided there is no other adequate remedy to redress the injury to property which would be inflicted by enforcing payment of the tax (Valley Trading Co v. CFI et al, 171 SCRA 501 (1989).

LOCAL BUSINESS TAXES

PROTEST OF ASSESSMENT
When the correct tax, fee or charge is not paid, the local treasurer shall issue a notice of assessment within the applicable prescriptive period (Sec. 194, LGC), stating the nature of the levy, amount of deficiency, surcharge, interest and penalty. Taxpayer may file a written protest against the assessment with the local treasurer; otherwise, the assessment shall become final and executory. The treasurer shall decide the protest within 60 days from the date of its filing. If the treasurer finds the assessment to be wholly or partly correct, he shall deny the protest with notice to taxpayer. The taxpayer shall have 30 days from date of receipt of the denial of the protest or from the lapse of the 60-day period within which to appeal with the court of competent jurisdiction; otherwise, the assessment becomes conclusive and unappealable (Sec. 195, LGC).

LOCAL BUSINESS TAXES

CLAIM FOR REFUND
The filing of a written claim for refund with the local treasurer is a condition precedent for maintaining a court action. If the treasurer does not act on the written claim for refund and the 2year period is about to expire, the taxpayer should initiate the court action for refund and consider the inaction of the treasurer as a denial of his claim. The LGC failed to specifically provide for a period of appeal in the event a decision is made by the treasurer on the claim for refund, similar to that obtaining in the case of a denial on a written protest of assessment. It would seem that the Court may entertain the appeal so long as the case for refund is filed with it within the 2-year period and written claim for refund or credit had earlier been submitted to the treasurer. The applicable Statute of Limitations could be filed within 6 years from payment thereof as a case of solutio indebiti (Art. 1145, NCC) [Puyat & Sons v. City of Manila].

REAL PROPERTY TAX

TITLE II: REAL PROPERTY TAXATION
Chapter I: General Provisions Chapter II: Appraisal and Assessment Chapter III: Assessment Appeals Chapter IV: Imposition of RPT Chapter V: Special Levies on Real Property Chapter VI: Collection of RPT Chapter VII: Disposition of Proceeds

REAL PROPERTY TAX

Real property tax is a tax on property. It is a national tax. The realty tax is enforced throughout the Phil and not merely in a particular municipality or city, but the proceeds of the tax accrue to the province, city or municipality and barrio where the realty taxed is situated. The province or city or a municipality within the MMA may levy an annual ad valorem tax on real property such as land, building, machinery, and other improvement not hereinafter specifically exempted (Sec. 232, LGC).

REAL PROPERTY TAX

UNIFORM RATE OF BASIC TAX Province: Not exceeding 1% of assessed value City or municipality within MMA: Not exceeding 2% of assessed value (Sec. 233, LGC) ADDITIONAL LEVIES 1% of assessed value, in addition to basic RPT. The proceeds hereof shall accrue exclusively to Special Education Fund (SEF) (Sec. 235, LGC). 5% of assessed value, in addition to basic RPT, as annual tax on idle lands (Sec. 237, LGC). Idle land, if of area is unimproved.
Agricultural lands more than 1 hectare, except grazing land Non-agri lands more than 1,000 sq.m. Residential lots (title transferred to individuals) regardless of area

REAL PROPERTY TAX

SPECIAL ASSESSMENTS
Imposed on lands specially benefited by public works projects or improvements funded by LGU concerned. Special levy shall not exceed 60% of cost It does not apply to lands exempt from basic RPT (Sec. 240, LGC) The test is that the assessment should not exceed the special benefit of the property. Special benefits refers to those which give to the property owner an uncommon advantage as distinguished from those benefits that are shared by non-assessed property owners. Special levy shall accrue on the first day of the quarter next following the effectivity of the ordinance imposing such levy (Sec. 245, LGC). Administrative remedies of taxpayer are the same and follow the same procedures as assessment of RPT.

REAL PROPERTY TAX

REAL PROPERTY SUBJECT TO RPT
The tax is imposed on real property such as land, buildings, machinery and other improvements not otherwise specifically exempted under the Code (Sec. 232, LGC). Machinery embraces machines, equipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached, permanently or temporarily, to the real property. It includes the physical facilities for production, the installations and appurtenant service facilities; those which are mobile, self-powered or self-propelled and not permanently attached to the real property but are actually, directly and essentially used to meet the needs of the particular industry, business or activity, and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, commercial, industrial or agricultural purposes (Sec. 199(o), LGC).

REAL PROPERTY TAX

REAL PROPERTY SUBJECT TO RPT
Improvements refers to valuable addition made to a property or an amelioration in its condition, amounting to more than a mere repair or replacement of parts involving capital expenditures and labor which is intended to enhance the value, beauty or utility or to adopt it for new or further purpose (Sec. 199(m), LGC).

REAL PROPERTY TAX

REAL PROPERTY
Two tanks not embedded in the land are real property, because they are improvements on the land, enhancing its utility and rendering it useful to the oil industry. They have been installed with some degree of permanence as receptacles for considerable quantities of oil needed by Meralco for its operations. Meralcos steel towers were not considered as real property, because they were regarded as poles and under Meralcos franchise, its poles are exempt from taxation. Moreover, the steel towers were not attached to any land or building. They were removable from their metal frames (Meralco v. CBAA, 1982)

REAL PROPERTY TAX

REAL PROPERTY Machinery and equipment consisting of underground tanks, elevated tanks, water tanks, gasoline pumps, computing pumps, water pumps, car washer, car and truck hoists, air compressors and similar articles, installed by Caltex in its gasoline stations, located on leased lands, are real property subject to tax (Caltex Phil v. CBAA)

REAL PROPERTY TAX

REAL PROPERTY Power barges, which are floating and movable, are real property subject to tax. Art 415(a) of NCC provides that docks and structures which though floating are intended by their nature and object to remain at a fixed place on a river, lake or coast are considered immovable property. The mere understanding with NPC under the Agreement that it shall be responsible for the payment of real property taxes and assessments does not justify its exception. The privilege granted to NPC cannot be extended to FELS. The covenant does not bind third persons not privy thereto (FELS Energy v. Prov of Batangas, 2007).

FELS Energy v. Prov of Batangas

Under Sec 226 of RA 7160, the last action of the local assessor on a particular assessment shall be the notice of assessment; it is this last action which gives the owner of the property the right to appeal to the LBAA. The procedure does not permit the property owner the remedy of filing a motion for reconsideration before the local assessor. To allow this procedure would invite corruption in the system of appraisal and assessment. It conveniently courts a graft-prone situation where values of real property may be initially set unreasonably high, and then subsequently reduced upon the request of the property owner (Callanta v Office of Ombudsman, Jan 30, 1998, cited in FELS Energy v. Prov of Batangas, 2007).

NPC v. CBAA, LBAA-La Union

Under the BOT Agreement, can the GOCC (NPC) be deemed the actual, direct and exclusive user of machinery and equipment for tax exemption? If not, can it pass on its tax-exempt status to its BOT partner, a private corporation, thru the BOT agreement? GOCC is exempt from RPT when it owns and/or actually uses the machinery and equipment for generation and transmission of electric power. In this case, it is BPPC, a non-government entity, which owns, maintains and operates the machinery and equipment. Using these, it generates electricity, which it then sells to NPC. NPC is not the registered owner of machinery and equipment. This is confirmed by BOT Agreement. Thus, Sec. 234 does not apply. Liability for payment of RPT is determined by law and not by agreement of the parties. It must be expressly granted by law. Tax exemption is also not transferable. And it is strictly construed. SC cited FELS Energy v. Prov of Batangas, where it was provided that NPC shall pay all of FELSreal estate taxes and assessments. Exemption of NPC was not recognized since it was not the actual, direct and exclusive user of the barge.

NPC v. CBAA, LBAA-La Union

That BOT Agreement is merely a financing scheme, where BPPC is the financier and NPC is the actual user of properties is belied by the BOT Agreement itself. The proponent will construct the project at its own cost and subsequently operates and manages it. At the end of 15 years, the proponent transfers the ownership of the facility to NPC. Thus, BPPC has complete ownership both legal and beneficial of the project (NPC v. CBAA, LBAA-La Union, GR 171470, Jan 30, 2009).

REAL PROPERTY TAX

REAL PROPERTY EXEMPT FROM TAX
Real property owned by the Republic of the Phil or any of its political subdivision, except when the beneficial use has been granted, for consideration or otherwise, to a taxable person Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit or religious cemeteries, and all lands, buildings and improvements actually, directly and exclusively used for religious, charitable or educational purposes All machineries and equipment that are actually, directly and exclusively used by local water districts and GOCC engaged in the supply and distribution of water and/or generation and transmission of electric power All real property owned by duly registered cooperatives under RA 6938; and Machinery and equipment used for pollution control and environmental protection (Sec. 234, LGC)

REAL PROPERTY TAX

Except as provided herein, any exemption from payment of RPT previously granted to, or presently enjoyed by, all persons, whether natural or juridical, including all GOCCs, are hereby withdrawn upon the effectivity of this Code (Jan 1, 1992). TESTS OF EXEMPTION
Ownership exemption (government and cooperatives) Character exemption (charitable institution, churches and nonprofit or religious cemeteries) Usage exemption (religious, charitable or educational purposes; local water districts and GOCCs engaged in water and electric power; pollution control and environmental protection)

REAL PROPERTY TAX

The test of exemption from taxation is the use of the property for the purposes mentioned in the Constitution (Abra Valley College v. Aquino, 162 SCRA 106). The term exclusively used does not necessarily mean total or absolute use for religious, charitable and educational purposes. Even if the property is incidentally used for said purposes, the tax exemption will apply. Corollarily, if a property, although owned by a religious, charitable and educational institution, is used for non-exempt purpose, the exemption from tax shall not attach (Herrera v. QC-BAA, 3 SCRA 187).

REAL PROPERTY TAX

Tax exemptions or incentives were withdrawn upon the effectivity of LGC, except those granted to LWDs, cooperatives under RA 6938, non-stock, non-profit hospitals and educational institutions, and unless provided in the LGC. Even as to real property owned by the RP or its political subdivisions, exemption is withdrawn if beneficial use has been granted to a taxable person for consideration or otherwise. SC noted the terms RP and National Government are not interchangeable. The former is broader and synonymous with the Govt of the RP. The latter refers to the entire machinery of the central government (Mactan Cebu Intl Airport Authority v. Marcos, 1996).

REAL PROPERTY TAX

Sec. 3, RA 470 (Local Tax Code) exempts from taxation property owned by the Republic of the Phil.. The law makes no distinction between property held in a sovereign, government or political capacity and those possessed in a private, proprietary and patrimonial character. Where the law does not distinguish, neither may we. Taxes are financial burdens imposed for the purpose of raising revenues with which to defray the cost of operation of the government, and a tax on the property of the government, whether national or local, would merely have the effect of taking money from one pocket to put it in another pocket (Board of
Assessment Appeals, Laguna v. CTA and NWSA).

Government instrumentalities are exempt from RPT, but GOCCs are subject to tax (MIAA case).

REAL PROPERTY TAX

CA 182, which created NDC, contains no provision exempting from payment of RPT on properties it may acquire. Besides, these properties are not devoted to public use but were acquired for resale to qualified persons. Also, NDC does not come under municipal or public corporations in the sense that it may sue and be sued (NDC v.
1. Prov of N Ecija, L-41223, 1983)

2. President reserved public land for warehousing purposes in favor of GOCC. Land is exempt from real property tax. The tax exemption of property owned by the Republic of the Phil. refers to properties owned by the government and by its agencies which do not have separate and distinct personalities (unincorporated entities). In this case, what appears to have been ceded to NDC was merely the administration of the property while the government retains ownership of what has been declared for warehousing purposes. The government does not part with its title by reserving the land for a certain purpose (NDC v. Pacis, 215 SCRA 382).

MIAA v. City of Paranaque

MIAA owns airport lands and buildings located in Paranaque City. MIAA is not a GOCC under Sec 2(13) of the Introductory Provisions of the Administrative Code because it is not organized as a stock or non-stock corporation. Neither is MIAA a GOCC under Sec 16, Art XII of the 1987 Constitution because MIAA is not required to meet the text of economic viability. MIAA is a government instrumentality vested with corporate powers and performing essential public services pursuant to Sec 2(10) of the Administrative Code. As a government instrumentality, MIAA is not subject to any kind of tax by local governments under Sec 133(o) of LGC. The exception to the exemption in Sec 234(a) does not apply to MIAA because MIAA is not a taxable entity under the LGC. Such exception applies only if the beneficial use of real property owned by the Republic is given to a taxable entity. The airport lands and buildings of MIAA are properties devoted to public use and thus are properties of public opinion, owned by the State or the Republic (MIAA v. CA, 2006).

MIAA v. Pasay City

MIAA owns airport lands and buildings located in Pasay City. Instrumentality refers to any agency of the national government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and GOCC. Instrumentality includes GOCC (Sec 2(10) Adm Code). This means that a government instrumentality may or may not be a GOCC. Obviously, the term government instrumentality is broader than the term GOCC. GOCC refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations to the extent of at least 51% of its capital stock.

MIAA v. Pasay City

Since MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions, MIAA is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers. When the law vests in a government instrumentality corporate powers, the instrumentality does not become a corporation. Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality exercising not only governmental but also corporate powers. Thus, MIAA exercises the governmental powers of eminent domain, police authority and the levying of fees and charges. At the same time, MIAA exercises all the powers of a corporation under the Corporation Law, insofar as these powers are not inconsistent with the provisions of this E.O. Hence, MIAA is not liable to pay RPT (GR No. 163072, Apr 2, 2009).

Phil Fisheries Dev Auth v. CA & Iloilo City

PFDA is not a GOCC but an instrumentality of the national government which is generally exempt from RPT. However, said exemption does not apply to the portions of the IFPC, consisting of breakwater, a landing quay, a refrigeration building, market hall, municipal shed, an administration building, water and fuel oil supply system and other port-related facilities and machineries; title to the land and buildings of the IFPC remained with the Republic, which PFDA leased to private entities. Nonetheless, the IFPC, being property of public dominion, cannot be sold at public auction to satisfy the tax delinquency.

PFDA v. Iloilo City

For an entity to be considered as GOCC, it must either be organized as a stock or non-stock corporation. Two requirements are need to create a stock corporation: (1) it has capital stock divided into shares; and (2) it is authorized to distribute dividends and allotments of surplus and profits to its stockholders. If only one requisite is present, it cannot be properly classified as a stock corporation. As for non-stock corporations, they must have members and must not distribute any part of their income to said members. PFDA is not a GOCC. It has capital stock but it is not divided into shares of stocks. It has no stockholders or voting shares; hence, it is not a stock corporation. Neither is it a non-stock corporation because it has no members (PFDA v CA & Iloilo City, GR 169836, July 31, 2007).

LRTA v. CBAA
Real property is classified for assessment purposes on the basis of actual use, which is defined as the purpose for which the property is principally or predominantly utilized by the person in possession of the property. Unlike public roads which are open for use by everyone, the LRT is accessible only to those who pay the required fare. It is thus apparent that petitioner does not exist solely for public service, and that the LRT carriageways and terminal stations are not exclusively for public use. Although petitioner is a public utility, it is nonetheless profit-earning. It actually uses those carriageways and terminal stations in its public utility business and earns money therefrom. Real property owned by the government or any of its political subdivisions and any GOCC so exempt by its charter is exempt from RPT, but this exemption shall not apply where the beneficial use has been granted, for consideration or otherwise to a taxable person.

REAL PROPERTY TAX

Records of the Constitutional Commission reveal that what is exempted is not the institution itself; those exempted from real estate taxes are lands, buildings and improvements actually, directly and exclusively used for religious, charitable or educational purposes. What is meant by actual, direct and exclusive use of the property for charitable institutions is the direct and immediate and actual application of the property itself to the purposes for which the charitable institution is organized. It is not the use of the income from the real property that is determinative of whether the property is used for tax-exempt purposes. In sum, SC ruled the portions of the land leased to private entities as well as those parts of the hospital leased to private individuals are not exempt from taxes (Lung Center of the Phil v. QC Assessor, GR 144104, June 29, 2004).

City Assessor of Cebu v. Association of Benevola de Cebu

SC DECISION Chong Hua Hospital Medical Arts Center (CHHMAC) is an integral part of CHH. It is undisputed that doctors and medical specialists holding clinics in CHHMAC are those duly accredited by CHH. This fact alone takes away CHHMAC from being categorized as commercial since tertiary hospital like CHH is required by law to have a pool of physicians. The fact that doctors are holding office in a separate building (100 meters away) does not take away the essence and nature of their services vis--vis the over-all operation of the hospital and the benefits to the hospitals patients. Their transfer to a more spacious and convenient place and location for the benefit of the hospitals patients does not remove them from being an integral part of the operation of the hospital. It would have been different if CHHMAC was also open for nonaccredited physicians.

City Assessor of Cebu v. Association of Benevola de Cebu

Although CHHMAC facility is not indispensable, it is definitely incidental to and reasonably necessary for the operation of CHH. The operation of a hospital is not only for confinement and surgical operations where hospital beds and operating theaters are required. The usual course is that patients have to be diagnosed, and then treatment and follow-up consultations follow or are required. Charging rentals for the offices used by its accredited physicians cannot be equated to a commercial venture. First, CHHMAC is only for its consultants or accredited doctors and medical specialists. Second, charging of rentals is a practical necessity to recoup investment cost of building, to cover rentals for the lot, and to maintain the building and its facilities. Third, it pays proper taxes for its rental income, and fourth, the net income, if any, does not inure to any private or individual person as it will be used for other charitable projects. Secs 215 and 216, LGC provides hospital shall be treated as special property subject to 10% special assessment level and not as commercial property subject to 35% level (City Assessor of Cebu v. Association of Benevola de Cebu, GR 152904, June 8, 2007).

REAL PROPERTY TAX

FUNDAMENTAL PRINCIPLES The appraisal (process of determining value of property; put in writing the value of property), assessment (notice that amount of tax is due and demand for payment), levy and collection of real property for taxation purposes shall be guided by the following:
Real property shall be appraised at its current and fair market value Real property shall be classified for assessment purposes on the basis of its actual use Real property shall be assessed on the basis of a uniform classification within each local political subdivision The appraisal, assessment and levy of real property and the collection of the real property tax shall not be let to any private person The appraisal and assessment of real property shall be equitable (Sec. 198, LGC)

REAL PROPERTY TAX

The RPT for any year shall accrue on the first day of January and from that date it shall constitute a lien on the property which shall be superior to any other lien, mortgage, or encumbrance of any kind whatsoever, and shall be extinguished only upon payment of the delinquent tax (Sec. 246, LGC). The collection of the RPT with interest and related expenses, and the enforcement of the remedies in this Title, shall be the responsibility of the city or municipal treasurer concerned. He may deputize the barangay treasurer for all taxes on real property located in the barangay, provided he is bonded and the premium on such bond shall be paid by the city or municipal government (Sec. 247, LGC).

REAL PROPERTY TAX

The provincial, city or municipal assessor shall prepare and submit to the treasurer of the local government unit, on or before Dec 31 of each year, an assessment roll containing a list of all persons whose real properties have been newly assessed or reassessed and the values of such properties (Sec. 248, LGC). The city or municipal treasurer shall post the dates the basic RPT and SEF may be paid without interest. Such notice shall also be published in a newspaper of general circulation in the locality once a week for 2 consecutive weeks (Sec. 249, LGC) Basic RPT and SEF may be paid on installments, without interest, as follows: Q1: March 31; Q2: June 30; Q3: September 30; and Q4: December 31, except the special levy, payment of which shall be governed by ordinance of the sanggunian concerned. Payment of RPT shall first be applied to prior years delinquencies and penalties (Sec. 250, LGC).

REAL PROPERTY TAX

If basic RPT and SEF are paid in advance, the sanggunian may grant a discount not exceeding 20% of the annual tax due (Sec. 251, LGC). Annual depreciation equivalent to 5% of the fair market value of the machinery shall be granted, provided that when the remaining value of machinery is at 20%, no further depreciation shall be allowed.

REAL PROPERTY TAX

REMEDIES OF GOVERNMENT IN THE COLLECTION OF RPT
Administrative remedies
Levy and sale or forfeiture of property Tax lien

Judicial remedies
Civil action

PRESCRIPTIVE PERIODS
To collect (administrative or judicial)
5 years from date they become due, without fraud 10 years from discovery of fraud or intent to evade payment

Prescriptive periods
RPT accrues on January 1 Special levy accrues on the first day of the quarter following the effectivity of the ordinance imposing the levy

REAL PROPERTY TAX

When RPT becomes delinquent, the treasurer shall immediately cause a notice of delinquency to be posted in the capitol or municipal hall and in a publicly accessible and conspicuous place. The notice of delinquency shall also be published once a week for 2 consecutive weeks in a newspaper of general circulation in the province, city or municipality. Such notice shall state that distraint or levy may be issued and unless the tax and penalties are paid before of the year for which the tax is due, the delinquent real property will be sold at public auction, except when the notice of assessment or special assessment is contested administratively or judicially. Transfer of title to the purchaser shall be subject to the right of redemption of the delinquent owner or any person having legal interest therein within one (1) year from the date of sale (Sec. 254, LGC). In case of failure to pay the tax, the unpaid amount shall be subject to 2% interest per month until the delinquent tax shall have been fully paid, but in no case shall total interest exceed 36 months (Sec. 255, LGC).

REAL PROPERTY TAX

REMEDIES OF TAXPAYER

No protest shall be entertained, unless the tax is first paid.

There are cases decided by the Supreme Court where the taxpayer is allowed to just file a surety bond, instead of paying the amount of real property tax being contested.

When a taxpayer desires for any reason to pay his tax under protest, he shall indicate the amount or portion thereof which he is contesting, and such protest shall be annotated on the tax receipts by writing thereon the word paid under protest. The amount paid under protest shall be held in trust by the treasurer. The protest shall be confirmed in writing, with a statement of the ground therefor, within 30 days from date of payment of tax.

REAL PROPERTY TAX

REMEDIES OF TAXPAYER The protest shall be filed with the provincial, city or municipal treasurers within the MMA, who shall decide the protest within 60 days from the receipt of the protest. If the protest is:
Decided in favor of the taxpayer, the amount of the tax protested against may be refunded or applied as tax credit to any other existing or future tax liability of the protestant, or Denied or upon the lapse of 60 days without the protest being finally decided, the taxpayer may appeal to the LBAA (Sec. 252, LGC).

REAL PROPERTY TAX

REMEDIES OF TAXPAYERS
If assessment is: Illegal or void (assessor has no power to act at all) and payment was already made, remedy is to sue for refund in competent court; Erroneous (assessor errs in the exercise of the power), file appeal to LBAA of the province or city within 60 days from receipt of assessment Petition under oath may be made by the owner or person having legal interest in the property to LBAA, attaching copies of Tax Declarations and such affidavits or documents in support of the appeal (Sec. 226, LGC). Failure to appeal within the statutory period renders the assessment final and executory (Victorias Milling Co v CTA, 22 SCRA 1008).

REAL PROPERTY TAX

REMEDIES OF TAXPAYER The LBAA shall decide the appeal within 120 days from receipt of the appeal. The decision of LBAA, which must be based on substantial evidence presented at the hearing or least contained in the records, may be appealed within 30 days from receipt thereof by the taxpayer to the CBAA, whose decision shall be final and executory (Sec. 229, LGC).

Decisions of CBAA are appealable to CTA within 30 days from date of receipt (RA 9282).

 END OF PRESENTATION Atty. Vic C. Mamalateo Mobile: 0918-9037436 Email: vic.mamalateo@vcmlaw.com.ph; vicmamalateo@yahoo.com