FACTS
Veronica Sanchez was the owner of a 2-storey, four-door “accessoria” building in Pasay City which she constructed in 1947. She lived in one of the apartments and rented out the rest to others. In 1949, she derived an income therefrom of P7,540.
Aside from being a landlady, she also ran a small dry goods store in the Pasay market, from which she derived an annual income of about P1,300. In 1951, CIR made demand upon Sanchez for the payment of P163.51 as income tax for the year 1950, and P637 as real estate dealer's tax for the year 1946 to 1950, plus the sum of P50 as compromise.
Sanchez paid the taxes demanded under protest, and on October 16, 1951 filed an action in the CFI against the CIR for the refund of the taxes paid, claiming that she was not a real estate dealer. The CFI ruled that she was in fact a dealer as defined by the NIRC, and that the taxes in question were legal.
IN-ARTICLE AD (square)
RULING
The Court ruled in favor of CIR.
As per Sec. 194(s) of the NIRC, “real estate dealers” includes all persons who for their own account are engaged in the sale of lands, buildings or interests therein or in leasing real estate. Sanchez falls withing this description.
The nature of the building constructed by her — a four-door “accessoria” — shows that it was from the beginning intended for lease as a source of income or profit to the owner. Granted, the SC held there was no double taxation contrary to Veronica’s assertion.
License tax may be levied upon a business or occupation although the land or property used therein is subject to property tax, and that the state may collect an ad valorem tax on property used in a calling, and at the same time impose a license tax on the pursuit of that calling, the imposition of the latter kind of tax being in no sense a double tax.
