Local Government Taxes Review Flashcards

Comprehensive practice flashcards covering local government taxation concepts, procedures, legal rules, and remedies based on the provided lecture notes by Atty. C. Llamado.

Under Section 186 of the Local Government Code (LGC), what is mandatory prior to enacting an ordinance levying new local taxes, fees, or charges?

Prior public hearing conducted for the specific purpose of levying such taxes, fees, or charges.

What was the outcome of the Supreme Court ruling in Ongsuco, et. al. v. Hon. Malones, G.R. No. 182065 (October 27, 2009)?

The ordinance imposing 'goodwill fees' upon stall holders at a public market was declared void because no public hearing had been duly conducted prior to its enactment.

According to Section 131 of the LGC, how are 'Fee' and 'Charges' defined?

'Fee' means a charge fixed by law or ordinance for the regulation or inspection of a business or activity. 'Charges' refers to pecuniary liability, as rents or fees against persons or property.

What body holds the taxing authority to exercise the power to impose a tax, fee, or charge under the Local Government Code?

The sanggunian of the LGU concerned through an appropriate ordinance.

What is the tax base, maximum tax rate, and time of payment for the provincial Tax on Transfer of Real Property Ownership?

Tax base: Total consideration involved in the acquisition or fair market value, whichever is higher. Tax rate: Not more than $500\times 10^{-5}$ or 50% of 1%. Time of payment: Within 60 days from the date of execution of the deed or date of decedent's death.

What real property transfers are exempt from the provincial Tax on Transfer of Real Property Ownership?

The sale, transfer or other disposition of real property pursuant to R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988).

What are the tax base and rate limits for the provincial Tax on Business of Printing and Publication?

(a) For a newly started business: Not exceeding $\frac{1}{20}$ of 1% of capital investment. (b) In succeeding calendar years: Not exceeding 50% of 1% of the gross annual receipts for the preceding calendar year or any fraction thereof.

What is the maximum amount of Professional Tax that a sangguniang panlalawigan may impose?

An amount determined by the sangguniang panlalawigan, but in no case to exceed Three Hundred Pesos (₱300.00).

What are the rules regarding time of payment and exemptions for the provincial Professional Tax?

Paid annually on or before January 31st (or after Jan 31 if practice begins after Jan). Professionals exclusively employed in the government are exempt.

Which entertainment presentations are exempt from the provincial Amusement Tax, and what is the exception?

Operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical presentations are exempt. Exception: Pop, rock, or similar concerts shall not be exempt.

What is the maximum annual fixed tax that a province may impose on delivery trucks or vans of manufacturers, wholesalers, or retailers?

An amount not exceeding Five Hundred Pesos (₱500.00) per vehicle.

For manufacturers with gross sales or receipts of ₱6.5 Million or more, how is the municipal Local Business Tax (LBT) computed?

The tax shall equal the sales/receipts multiplied by a tax rate not exceeding 37.5% of 1.0%.

What are the LBT tax rates for retailers under Section 143(d) of the LGC?

A rate of 2% per annum on sales not exceeding ₱400,000, and 1% per annum on sales in excess of the first ₱400,000.

What are the gross sales thresholds where barangays have exclusive power to levy taxes on stores or retailers?

Gross sales or receipts of the preceding calendar year of Fifty Thousand Pesos (₱50,000.00) or less in city barangays, and Thirty Thousand Pesos (₱30,000.00) or less in municipal barangays.

How are newly started business entities taxed regarding initial Local Business Tax (LBT)?

They are not subject to initial LBT, and are only subject to Business Permit and other regulatory fees/charges (except for printing/publication and franchise businesses, which may be taxed on capital investment).

When may the Presumptive Income Level Assessment Approach (PILAA) be used to compute Local Business Tax?

Only if the taxpayer is unable to provide proof of gross sales/receipts, provided PILAA is embodied in a local tax ordinance that has undergone public hearings and publication.

How are sales allocated between LGUs for LBT when a company has a principal office in one LGU and a factory/plantation in another?

30% of sales recorded in the principal office are taxable where the principal office is located; 70% are taxable where the factory, project office, plant, or plantation is located.

What is the tax rate and scope of the Registered Business Enterprise (RBE) Local Tax under R.A. No. 12066?

A rate of not more than 2% of an RBE's gross income under ITH or EDR (not SCIT), which is in lieu of all local taxes, fees, and charges imposed under R.A. No. 7160.

What is the limit on tax rates that cities may levy relative to provinces or municipalities?

Cities may exceed the maximum rates allowed for provinces or municipalities by not more than 50%, except for professional tax (max ₱300) and amusement tax (max 10%), which are uniform.

What is the mandatory period for a Sangguniang Barangay to act upon an application for a Barangay Clearance?

Within seven (7) working days from filing. If not issued within said period, the city or municipality may issue the business license or permit.

Who is explicitly exempt from LGU toll fees or charges for using public roads, bridges, or ferries?

(a) Officers/enlisted men of AFP and PNP on mission; (b) Post office personnel delivering mail; (c) Physically-handicapped persons; and (d) Disabled citizens who are 65 years or older.

What is the basic rate, additional rate, and maximum cap of the Community Tax for individuals?

Basic tax of Five Pesos (₱5.00) plus an annual additional tax of One Peso (₱1.00) for every One Thousand Pesos (₱1,000.00) of income, not to exceed Five Thousand Pesos (₱5,000.00).

What is the basic rate, additional rate, and maximum cap of the Community Tax for juridical persons?

Basic tax of Five Hundred Pesos (₱500.00) plus Two Pesos (₱2.00) for every ₱5,000 of real property owned and ₱2.00 for every ₱5,000 of gross receipts, not to exceed Ten Thousand Pesos (₱10,000.00).

What is the interest rate and maximum cap for delinquency in paying the Community Tax?

Interest of 24% per annum from the due date until paid, with total interest capped at a maximum of 36 months (72%).

What are the standard prescriptive periods for assessment and collection of local taxes under the LGC?

Assessment: Within 5 years from the date taxes became due (10 years in case of fraud or intent to evade). Collection: Within 5 years from the date of assessment.

What are the steps and timelines for filing a protest against a local tax assessment?

File written protest with Local Treasurer within 60 days of receipt of assessment. Treasurer decides within 60 days. If denied or unacted upon, appeal to the RTC within 30 days. If RTC denies, appeal to the CTA within 15 days.

Within what period must a claim for refund or tax credit of local taxes be filed with the local treasurer?

Within two (2) years from the date of payment of the tax, fee, or charge.

Which municipal entities have the legal authority to levy Real Property Tax under Section 232 of the LGC?

(1) Provinces; (2) Cities; and (3) Municipality within the Metropolitan Manila Area (Pateros). Municipalities outside MMA have no power to levy real property taxes.

What is the maximum annual depreciation allowance permitted for machinery assessment, and what is its minimum remaining value?

Depreciation allowance shall not exceed 5% of original/replacement cost for each year of use. The remaining value shall be fixed at not less than 20% of original/replacement cost as long as useful and operating.

What are the maximum basic Real Property Tax rates allowed for provinces versus cities or MMA municipalities?

Provinces: Not exceeding 1% of assessed value. Cities or MMA Municipalities: Not exceeding 2% of assessed value.

What is the tax rate for the Special Education Fund (SEF) additional levy on real property?

An annual tax of one percent (1%) on the assessed value of real property, in addition to the basic real property tax.

How are non-agricultural idle lands defined for real property tax purposes under Section 238 of the LGC?

Lands located in a city or municipality, more than 1,000 square meters in area, one-half (1/2) of which remain unutilized or unimproved by the owner or person having legal interest.

What is the maximum limit for a Special Assessment / Special Levy imposed by an LGU on lands benefited by public works?

The special levy shall not exceed sixty percent (60%) of the actual cost of the projects and improvements.

What are the four equal installment deadlines for paying basic Real Property Tax and SEF without interest?

1st installment: March 31; 2nd installment: June 30; 3rd installment: September 30; 4th installment: December 31.

What is the complete administrative appeal chain and timeline for contesting a Real Property Tax assessment?

Pay tax under protest -> File written protest with Local Treasurer within 30 days -> Treasurer decides in 60 days -> Appeal to LBAA within 60 days -> Appeal LBAA decision to CBAA within 30 days -> File Petition for Review with CTA within 30 days.

Under R.A. No. 12001 (Sec. 30), what is covered under the RPT tax amnesty and what is the deadline to file?

Covers penalties, surcharges, and interests from all unpaid RPT (including SEF, idle land tax, special levies) prior to July 5, 2024. Delinquent owners must file within 2 years after effectivity, or until July 5, 2026.