TAXATION II PART IV ( WITH ASSIGNED CASES) LOCAL AND REAL PROPERTY TAXATION Republic Act No.

7160, Local Government Code (LGC) of 1991, as amended Implementing Rules and Regulations of the LGC LOCAL TAXATION

PRELIMINARY MATTERS a. Power to Tax of Local Government Units i. Sec. 5 Art. X, 1987 Constitution (compare with 1935 and 1973 provisions) ii. Sec. 129, LGC Pepsi Cola Bottling vs. Municipality of Tanuan 69 SCRA 460 Mactan Cebu International Airport Authority vs. Marcos GR No. 120082, Sept. 11, 1996 Manila Electric Company vs. Province of Laguna GR No. 131359, May 5, 1999 NPC vs. City of Cabanatuan GR No. 149110, April 9, 2003 City Government of Quezon City vs. Bayan Telecommunications GR No. 162015, March 6, 2006 iii. Local Taxing Authority (Sec. 132) 1. Construction of Tax Ordinances (Sec. 5b) Petron Corp. vs. Mayor Tobias Tiangco GR No. 158881, April 16, 2008 iv. Procedure for Approval of and Effectivity of Tax Ordinances (Sec. 187) Hagonoy Market vs. Mun. of Hagonoy GR No. 137621, Feb. 6, 2002 v. b. Publication (Sec. 188)

I.

Other Preliminary Matters i. Residual Powers of LGUs Power to Levy Other Taxes, Fees or Charges (Sec. 186) ii. Doctrine of Preemption or Exclusionary Rule Victorias Milling Co., Inc. vs. Municipality of Victorias L21183, September 27, 1968 II. GENERAL PROVISIONS a. Scope of taxing powers (Sec. 128) b. Fundamental Principles (Sec. 130) c. Definitions (Sec. 131) d. Common Limitations i. Income Tax 1. Correlate with Sec. 143 (f) ii. Documentary Stamp Tax iii. Transfer Taxes 1. Correlate with Sec. 135 iv. Customs Duties v. Taxes, Fees and Charges (TFC) on Goods Passing Through the Territorial Jurisdiction of LGUs

1. Correlate with Sec. 155 Panaligan vs. City of Tacloban GR No. L9319, September 27, 1957 Palma Development Corp vs. Municipality of Malangas GR No. 152492, October 16, 2003 vi. TFC on products sold by marginal farmers of fishermen 1. Definition of Marginalized Fishermen (Sec. 122) City of Cebu vs. IAC 144 SCRA 710 vii. Taxes on BOIregistered enterprises viii. Excise taxes under the NIRC/TFC on Petroleum Products Petron Corp. Vs. Mayor Tobias Tiangco GR No. 158881, April 16, 2008 Province of Bulacan vs. CA GR No. 126232, November 27, 1998 ix. Percentage taxes and VAT Pepsi Cola Bottling vs. Municipality of Tanuan 69 SCRA 460 Matalin Coconut Co, Inc. vs. The Municipal Council of Malabang, Lanao del Sur, GR No. L28138 August 13, 1986 x. Taxes on transportation contractors and common carriers First Philippine Industrial Corporation vs. CA GR No. 125948, December 29, 1998 xi. Taxes on premiums xii. TFC for registration of motor vehicles and issuance of licenses for driving 1. Correlate with Sec. 458 (3)(vi) of the LGV and Art. 99(a)(3)(vi) of the IRR of the LGC LTO vs. City of Butuan GR No. 131512, January 20, 2000 xiii. Taxes, Fees, or Charges on Philippine Products Actually Exported; 1. Correlate with Sec. 143 (c) xiv. TFC on CBBEs under RA No. 6810 and RA 6983 xv. TFC on the National Government, its agencies and instrumentalities and LGUs Philippine Fisheries Devt Authority vs. CA GR No. 169836, GR No. July 31, 2007 Mactan Cebu International Airport Authority vs. Marcos GR No. 120082, Sept. 11, 1996 MIAA vs. CA GR No. 155650, July 20, 2006 MIAA vs. City of Pasay GR No. 163072, April 2, 2009 City of Davao City vs. RTC GR No. 127383, August 18, 2005 TAXING AND OTHER REVENUE RASING POWERS OF LGUS a. Provinces i. Local Transfer Tax (Sec. 135) ii. Business Tax on Printing and Publication (Sec. 136) iii. Franchise Tax (Sec. 137) NPC vs. City of Cabanatuan GR No. 149110, April 9, 2003 Quezon City vs. ABSCBN GR No. 166408. October 6, 2008 III.

Smart Communications vs. City of Davao GR No. 155491, September 16, 2008 (Also read decision on Motion for Reconsideration dated July 21, 2009) iv. Tax on Sand, Gravel and Quarry Resources (Sec. 138) Municipality of San Fernando vs. Sta. Romana LGR No. 30159, Mar. 31, 1987 Province of Bulacan vs. CA GR No. 126232, November 27, 1998 v. Professional Tax (Sec. 139) 1. Definition of Professionals (Sec. 238 (f) IRR of the LGC) 2. Professional practices his profession in several places (Sec. 228 (b) IRR of LGC)

vi. Amusement Tax (Sec. 140) as amended by RA No. 9640 dated May 21, 2009 PBA vs. CA GR No. 119122, August 8, 2000 vii. b. Annual Fixed Tax on Delivery Trucks / Vans (Sec. 141)

Municipalities i. Business Taxes (Sec. 143) Ericsson Telecommunication vs. City of Pasig GR No. 176667, November 22. 2007 Yamane vs. BA Lepanto GR No 154992, October 25, 2005 City of Manila vs. Coca Cola Bottlers, GR No. 181845 August 4, 2009 1. Catch all provision Sec. 143 (h) 2. Rates of Tax within Metropolitan Manila (Sec. 144) 3. Retirement of Business (Sec. 145) Mobil Phils. vs. City Treasurer of Makati GR No. 154092, July 14, 2005 4. Payment of Business Taxes (Sec. 146) 5. Situs of Tax (Sec. 150) Where to pay business tax? Shell Co vs. Mun. Of Sipocot 105 Phil. 1263 Phil. Match vs. City of Cebu L30745 Jan. 1888, 197778 Iloilo bottlers vs. City of Iloilo GR No. 52019 Aug. 18, 1988 (compare with current LGC provisions and IRR provisions on rolling stores) a. With Branch or Sales Outlet b. No Branch Sales or Outlet c. With Factories, Project Offices, Plants and Plantations d. Plantation Located at a place other than the place where factory is located e. Two (2) or more factories, project offices, plants or plantations in different localities f. See also IRR for rules on rolling stores (See Art. 243 of the IRR of the LGC) Fees and Charges (Sec. 147) Others (Sec. 148 and Sec. 149)

6. 7.

c. Cities (Sec. 151)

d.

Barangay i. Tax on retailers (Sec. 152 a) ii. Service Fees or Charges (Sec. 152 b) iii. Barangay Clearance (Sec. 152 c) iv. Other Fees (Sec. 152 b)

e. Common Revenue Raising Powers i. Service Fees and Charges (Sec. 154) ii. Public Utility Charges (Sec. 155) iii. Toll Fees or Charges (Sec. 156) f. Other Matters i. Public Hearings Necessary? (Art. 324 IRR of the LGC vs. Sec. 187) Figuerres vs. CA, GR No. 119172, March 25, 1999 ii. Authority to Adjust Tax Rates (Sec. 191) iii. Authority to Grant Tax Exemptions (Sec. 192) iv. Withdrawal of Tax Exemption Privileges (Sec. 193) PLDT vs. City of Davao GR No. 143867, August 22, 2001 NPC vs. City of Cabanatuan GR No. 149110, April 9, 2003 v. Community Tax 1. Who may impose(Sec. 156) 2. Individuals Liable to pay (Sec. 157) 3. Juridical Persons Liable to Community Tax (Sec. 158) 4. Exemptions (Sec. 159) 5. Place of Payment (Sec. 160) 6. Time of Payment (Sec. 161) 7. Community Tax Certificate (Sec. 162) 8. Presentation of CTC on certain occasions (Sec. 163)

IV.

COLLECTION OF TAXES AND REMEDIES a. Collection of Taxes i. Tax Period and Manner of Payment (Sec. 165) ii. Accrual of Tax (Sec. 166) iii. Time of Payment (Sec. 167) iv. Surcharges and Penalties (Sec. 168) v. Interests on Other Unpaid Revenues (Sec. 169) vi. Collection of Local Revenues by Treasurer (Sec. 170) vii. Examination of Books of Accounts and Pertinent Records (Sec. 171) b. Remedies of the Government i. Local Governments Lien (Sec. 173) ii. Civil Remedies (Sec. 174) iii. Distraint (Sec. 175) iv. Levy of Real Property (Sec. 176) v. Advertisement and Sale (Sec. 178) vi. Redemption of Property Sold (Sec. 179)

vii. viii. ix. x. xi.

Purchase of Property by LGU for want of bidder (Sec. 181) Resale of Real Estate Tax for TFC Judicial Action (Sec. 183) Further Distraint and Levy (Sec. 184) Personal Property Exempt from Distraint or Levy (Sec. 185)

c. Taxpayers Remedies i. Question Constitutionality of Ordinance (Sec. 187) Drilon vs. Lim GR No. 111249, August 4, 1994 ii. Publication (Sec. 188) CocaCola Bottlers vs. City of Manila GR No. 156252, June 27, 2006 iii. Periods of Assessment and Collection (Sec. 194) iv. Protest of Assessment (Sec. 195) San Juan vs. Castro GR No. 174617, December 27, 2007 PLDT vs. City of Balanga, CTA EB Case No. 413, June 3, 2009 v. Appeal to the CTA vi. Claim for Refund (Sec. 196)

REAL PROPERTY TAXATION PRELIMINARY MATTERS a. Definition of Real Property Tax Villanueva vs. City of Iloilo, L26521, December 28, 1968 b. Who should pay the real property tax? Baguio vs. Busuego, GR No. 29772, September 18, 1980 NPC vs. Province of Quezon, GR No. 171586, July 15, 2009 NPC vs. Province of Quezon, GR No. 171586, January 25, 2010 (Resolution) BALBA GSIS vs. City Treasurer and Assessor of Manila, GR No. 186242 December 23, 2009 c. Fundamental Principles (Sec. 198) Important Definitions (Sec. 199) i. Real Property for RPT Purposes (415 NCC) ii. Machineries Mindanao Bus vs. City Assessor and Treasurer L17870, Sept. 29, 1962 Caltex Philippines, Inc. vs. CBAA GR No. 50466, May 31, 1982 Manila Electric Co. vs. CBAA L47943, May 31, 1982 BAA vs. Manila Electric Co., L15334, January 31, 1964 iii. Actual Use Patalinghug vs. CA, GR No. 104786, January 27, 1994 iv. Appraisal v. Assessment vi. Assessed Value e. Appraisal of Real Property (Sec. 201) Sesbreno v. CBAA, 270 SCRA 263 d. I.

f. Declaration of Real Property i. By Owner or Administrator (Sec. 202) ii. In case improvements are made (Sec. 203) iii. By Assessor (Sec. 204) iv. Notification of Transfer of Real Property Ownership (Sec. 208) g. Assessment of Real Property i. Preparation of Schedule of Fair Market Values (Sec. 212) Lopez vs. City of Manila, GR No. 127139 February 19, 1999 ii. Classes of Real Property for Assessment (Sec. 215) iii. Special Classes of Real Property (Sec. 216) City Assessor of Cebu City vs. Association de Benevola de Cebu GR No. 152904, June 8, 2007 iv. Actual Use as Basis for Assessment (Sec. 217) Testate Estate of Concordia Lim vs. City of Manila GR No. 90639, February 21, 1990) Patalinghug vs. CA, GR No. 104786, January 27, 1994 LRTA vs. CBAA GR No. 127316, October 12, 2000 Allied Banking Corporation vs. Quezon City Government GR No. 154126, October 11,2005 v. Assessment Levels (Sec. 218) vi. General Revision of Assessments and Property Classification (Sec. 219) vii. Valuation of Real Property (Sec. 220) Allied Bank vs. Quezon City Government GR No. 154126, October 11, 2005 viii. Date of Effectivity of Assessment or Reassessment (Sec. 221) ix. Assessment of Property Subject to Back Taxes (Sec. 222) Sesbreno v. CBAA, 270 SCRA 263 x. Notification of New or Revised Assessment (Sec. 223) xi. Appraisal and Assessment of Machinery (Sec. 224) xii. Depreciation Allowance for Machinery (Sec. 225) Condonation of RPT i. Condonation and Reduction of RPT (Sec. 276) ii. Condonation or Reduction of RPT by President (Sec. 277)

h.

IMPOSITION OF REAL PROPERTY TAX a. Power to Levy Real Property Tax (Sec. 232) b. Rates of Levy (Sec. 233) UY Allied Bank vs. Quezon City Government GR No. 154126, October 11, 2005 c. Exemptions from RPT (Sec. 234) i. Proof of Exemption from RPT (Sec. 206) Provincial Assessor of Marinduque vs. CA GR No. 170532, April 4, 2009 ii. Constitutional Provisions on RPT Exemption

II.

1. Sec. 28, Art. VI Lung Center of the Philippines vs. QC 433 SCRA 119 2. Sec. 4(3), Art. XIV Fels Energy, Inc. vs. Province of Batangas GR No. 168557, February 16, 2007 NDC vs. Cebu City 215 SCRA 382 Philippine Fisheries Devt Authority vs. CA GR No. 169836, GR No. July 31, 2007 Mactan Cebu International Airport Authority vs. Marcos GR No. 120082, Sept. 11, 1996 MIAA vs. CA GR No. 155650, July 20, 2006 MIAA vs. City of Pasay GR No. 163072, April 2, 2009 City of Davao City vs. RTC GR No. 127383, August 18, 2005 Provincial Assessor of Marinduque vs. CA GR No. 170532, April 4, 2009 NPC vs. Province of Quezon, GR No. 171586, July 15, 2009 NPC vs. Province of Quezon, GR No. 171586, January 25, 2010 (Resolution) GSIS vs. City Treasurer and Assessor of Manila, GR No. 186242 December 23, 2009 d. e. Additional Levy for SEF (Sec. 235) RPT on Idle Lands (Sec. 236) i. Coverage of Idle Lands (Sec. 237) ii. Idle Lands Exempt from Tax (Sec. 238) f. Special Levies (Sec. 240) i. Ordinance Imposing Special Levy (Sec. 241) ii. Publication and Public Hearing (Sec. 242) iii. Fixing Amount of Special Levy (Sec. 243) iv. Taxpayers Remedies (Sec. 244) v. Accrual of Special Levy (Sec. 245) III. IMPOSITION OF REAL PROPERTY TAX a. Date of Accrual (Sec. 246) b. Notice of Time of Collection (Sec. 249) c. Payment of RPT in Instalments(Sec. 250) d. Tax Discount for Advanced Prompt Payment (Sec. 251)

REMEDIES a. Local Government Units Remedies i. Date of Accrual of Tax (Sec. 246) ii. LGUs Lien (Sec. 257) iii. Interest on Unpaid RPT (Sec. 255) iv. Period to Collect (Sec. 270) 1. Suspension of Period to Collect v. Levy on Real Property (Sec. 258) 1. Advertisement and Sale (Sec. 260) Puzon vs. Abelera 169 SCRA 789 Spouses Tan vs. Bantequi GR No. 154027 October 24, 2005 vi. Redemption of Property Sold (Sec. 261) vii. Purchase of Property by the Local Government Units for Want of Bidder (Sec. 263)

IV.

viii. Court Action for Collection (Sec. 266) Taxpayers Remedies i. Action Assailing Validity of Tax Sale (Sec. 267) ii. Action Involving Ownership (Sec. 268) iii. Payment under Protest (Sec. 252) Ramie Textile vs. Mathay 89 SCRA 586 Ty vs. Trampe GR No. 117577, December 1, 1995 Olivarez vs. Marquez 438 SCRA 679 NPC vs. Province of Quezon, GR No. 171586, July 15, 2009 NPC vs. Province of Quezon, GR No. 171586, January 25, 2010 (Resolution) b.

iv. Refunds (Sec. 253) Allied Banking vs. Quezon City Government GR No. 154126, September 15, 2006 Motion for Clarification of Decision v. Assessment Appeals 1. Appeal with the LBAA (Sec. 226) City Government of Quezon City vs. Bayan Telecommunications GR No. 162015, March 6, 2006 Manila Electric Co. vs. Barlis 433 SCRA 11 Systems Plus Computer College of Caloocan vs. Local Government of Caloocan, GR No. 146382. August 7, 2003 Fels Energy, Inc. vs. Province of Batangas GR No. 168557, February 16, 2007 2. Action by the LBAA (Sec. 229) 3. Appeal to the CBAA (Sec. 229) 4. Appeal to the CTA En Banc 5. Effect of Appeal on Payment of RPT (Sec. 231)