PELIZLOY REALTY CORPORATION vs.PROVINCE OF BENGUET
G.R. No. 183137, April 10, 2013
Facts:
Petitioner Pelizloy Realty Corporation (“Pelizloy”) owns Palm Grove Resort, which is designed for recreation and which has facilities like swimming pools, a spa and function halls. It is located at Asin, Angalisan, Municipality of Tuba, Province of Benguet.
On December 8, 2005, the Provincial Board of the Province of Benguet approved Provincial Tax Ordinance No. 05-107, otherwise known as the Benguet Revenue Code of 2005 (“Tax Ordinance”). Section 59, Article X of the Tax Ordinance levied a ten percent (10%) amusement tax on gross receipts from admissions to “resorts, swimming pools, bath houses, hot springs and tourist spots.
Pelizloy filed an appeal/petition before the Secretary of Justice on January 27, 2006 and filed a Petition for Declaratory Relief with the Regional Trial Court. On December 10, 2007, the RTC rendered the assailed Decision dismissing the Petition for Declaratory Relief and Injunction for lack of merit. It further gave credence to the Province of Benguet’s assertion that resorts, swimming pools, bath houses, hot springs, and tourist spots are encompassed by the phrase ‘other places of amusement’ in Section 140 of the LGC. Aggrieved, Pelizloy filed the present petition on June 10, 2008 on pure questions of law.
Issue:
Whether or not provinces are authorized to impose amusement taxes on admission fees to resorts, swimming pools, bath houses, hot springs, and tourist spots for being “amusement places” under the Local Government Code.
No, provinces are not authorize to impose amusement taxes on admission fees to resorts, swimming pools, bath houses, hot springs and tourist spots.
In Section 140 (Amusement Tax) of the 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%) of the gross receipts from admission fees. Further, in Section 131 (c) of the LGC ‘amusement places’ is defined to include theaters, cinemas, concert halls, circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or performances.
In the case at bar, resorts, swimming pools, bath houses, hot springs, and tourist spots are not among those places expressly mentioned by Section 140 of the LGC as being subject to amusement taxes.
Therefore, the second paragraph of Section 59, Article X of the Benguet Provincial Revenue Code of 2005, which imposes amusement taxes on admission fees to resorts, swimming pools, bath houses, hot springs and tourist spots, is null and void.
Real LexEcon 