PELIZLOY REALTY v.
BENGUET gross receipts from admissions to “resorts, swimming pools, bath houses, hot springs, and
G.R. No. 183137 / APR 10, 2013 / LEONEN, J. / LOCGOV / MLCAMITAN
NATURE Petition for review on certiorari of an RTC of La Trinidad,
Benguet, Br 62 decision
PETITIONER Pelizloy Realty Corp., represented by its Pres., Gregory K. Loy
RESPONDENT The Province of Benguet
SUMMARY. A Provincial Tax Ordinance provided for the levying of amusement taxes on
admission fees to resorts, etc. Pelizloy is protesting the imposition of tax upon it on the argument
that the Municipality of Tuba Benguet is levying upon it a percentage tax not provided among its
powers, hence ultra vires. Dean Leonen clarifies that percentage tax is within the power of the
municipal government to impose however, the subject of such tax is limited to amusement places,
and under the statutory interpretation of ejusdem generis Pelizloy doesn’t qualify under it being a
resort.
DOCTRINE.
GR: (133 (i)) No percentage tax may be levied on sales, barters or exchanges or similar
transactions on goods or services except as otherwise provided herein.
E: (140) 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.
Based on the principle of ejusdem generis, the resorts are not included in the enumeration of what
comprises places of amusement which are already defined by black letter law, and is further
clarified in jurisprudence which denotes “places of amusement” as where “one seeks admission to
entertain oneself by seeing or viewing shows or performances” In this case, the definition of'
amusement places' in Section 131 (c) of the LGC is a clear basis for determining what constitutes
the 'other places of amusement' which may properly be subject to amusement tax impositions by
provinces. There is no reason for going beyond such basis. To do otherwise would be to
countenance an arbitrary interpretation/application of a tax law and to inflict an injustice on
unassuming taxpayers.
FACTS.
• Pelizloy owns Palm Grove Resort, which is designed for recreation; it has swimming pools, a
spa, and function halls, located at Tuba Muni in Benguet.
• The Provincial Bd. Of Benguet approved Provincial Tax Ordinance No. 05-107: “Benguet
Revenue Code of 2005” (TO). Sec. 59, Art. X of the TO1 levied a 10% amusement tax on
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Art. 10: Amusement Tax on Admission
Sec. 59. Imposition of Tax. There is hereby levied a tax to be collected from the proprietors, lessees, or operators of
theaters, cinemas, concert halls, circuses, cockpits, dancing halls, dancing schools, night or day clubs, and other places of
amusement at the rate of thirty percent (30%) of the gross receipts from admission fees; and
A tax of ten percent (10%) of gross receipts from admission fees for boxing, resorts, swimming pools, bath houses, hot
springs, and tourist spots is likewise levied.
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Sec. 133. Common Limitations on the Taxing Powers of Local Government Units. - Unless otherwise provided herein,
the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the
following:
tourist spots.”
• Pelizloy filed an appeal/petition with the SoJ, stating that the 10% tax was an ultra vires act.
SoJ failed to act upon the petition, so Pelizloy filed a Petition for Declaratory Relief and
Injunction before the RTC.
• RTC: Petition dismissed. Although Sec. 59 imposes a percentage tax, Sec. 133 (i) LGC2
allowed for exceptions. What the LGC prohibits is not the imposition by LGUs of percentage
taxes in general but the imposition and levy of such on sales, barters, etc., on goods and
services only. Resorts, swimming pools, bath houses, hot springs, and tourist spots are
encompassed by the phrase “other places of amusement” in Sec. 140 LGC.
• Pelizloy: Sec. 59 is a prohibited percentage tax per Sec. 133 (i) LGC.
• Benguet: Sec. 59 does not levy a percentage tax because the imposition is not based on the
total gorss receipts of services of Pelizloy but solely and actually limited on the gross receipts
of the admission fees collected. Provinces can validly impose amusement taxes on resorts, SP,
BH, HS, and TS, these being ‘amusement places’.
ISSUES & RATIO:
WON Sec. 59 levies a percentage tax - YES
WON provinces are authorized to impose amusement taxes on admission fees to resorts,
SP, BH, HS, and TS, for being ‘amusement places’ under the LGC - NO
Taxing power of LGUs
LGUs have no inherent power of taxation. The charter or statute must plainly show an
intent to confer that power,or else the LGU can’t assume it. Such power is limited to the
extent that such power is delegated to it either by the Consti or statute. Sec. 5, Art. X Consti3
grants the power to tax to local legislative bodies, subject to such guidelines and limitations
Congress may provide. Sec. 130 LGC provides the ff fundamental principles governing the
taxing powers of LGUs:
1. Taxation shall be uniform in each LGU.
2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on the taxpayer's ability to pay;
b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive, or confiscatory;
d. not be contrary to law, public policy, national economic policy, or in the restraint
of trade.
3. The collection of local taxes, fees, charges and other impositions shall in no case be let
to any private person.
4. The revenue collected pursuant to the provisions of the LGC shall inure solely to the
benefit of, and be subject to the disposition by, the LGU levying the tax, fee, charge or other
imposition unless otherwise specifically provided by the LGC.
5. Each LGU shall, as far as practicable, evolve a progressive system of taxation.
xxx
(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services except
as otherwise provided herein.
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Sec. 5. Each local government unit shall have the power to create its own sources of revenues 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.
 Provinces not barred from levying amusement tax NOTES.
Sec. 133 LGC provides for the common limitations on the taxing powers of LGUs. (i) The LGC establishes the parameters of the taxing powers of LGUs
prohibits the levy by LGUs of percentage/VAT on sales, barters or exchanges, or similar 1. Sec. 130 – fundamental principles
transactions on goods and services except as otherwise provided by the LGC. a. Taxation shall be uniform in each LGU
What is percentage tax? It is a tax measured by a certain percentage of the gross selling b. Taxes, fees, charges, and other impositions shall:
price or gross value in money of goods sold, bartered, or imported; or of the gross receipts or (1) Be equitable and based as far as practicable on the taxpayer’s
earnings derived by any person engaged in the sale of services. The NIRC lists amusement ability to pay
taxes as among the other percentage taxes which are levied regardless of whether or not a (2) Be levied and collected only for public purposes
taxpayer is already liable to pay VAT. (3) Not unjust, excessive, oppressive, confiscatory
Even if amusement taxes are percentage taxes, provinces are not barred from levying (4) Not contrary to law, public policy, national
the such. Sec. 133 (i) prohibits the levy of percentage taxes “except as otherwise provided” 2. Collection of local taxes, fees, charges and other impositions shall in no case be let to any
by the LGC. Sec. 1404 carves a clear exception to the general rule in (i). It expressly allows for private person
the imposition by provinces of amusement taxes on “the proprietors, lessees, or operators of 3. Revenue collected pursuant to provisions of LGC shall inure solely to the benefit of, and be
theatres cinemas, concert halls, circuses, boxing stadia, and other places of amusement.” subject to the disposition by the LGU levying the tax, fee, charge or other imposition
a. Unless otherwise specifically provided for in the LGU
Resorts and the like are not encompassed in the phrase ‘other places of amusement’ 4. Each LGU shall, as far as practicable, evolve a progressive system of taxation
5. Sec, 133 provides the common limitations
SC used ejusdem generis5. The case of PBA v CA had the SC interpret a similar provi, The
SC there held that the enumeration’s common characteristic was artistic expression, and
basketball games don’t have that characteristic. However, in this case, Sec. 140 included
‘boxing stadia’, which also does not have artistic expression as its characteristic.
Sec. 131 (c) provides a clear definition of ‘amusement places’: 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. The enumeration in 140 are all venues
primarily for the staging of spectacles or the holding of public shows, exhibitions,
performances, and other events meant to be views by an audience. Thus, ‘other places of
amusement’ must be interpreted in light of that typifying characteristic. Based on the New
Oxford American dictionary, the definitions6 of the words ‘show’ and ‘performance’ denote
not only visual engagement (seeing/viewing), but also active doing (displaying,
staging/presenting) such that actions are manifested to, and perceived by the audience.
Applied: Resorts, etc. cannot be considered as venues primarily where one seeks
admission to entertain oneself by seeing or viewing the show or performances. While they
may be venues where people are visually engaged, they are not primarily venues for their
proprietors to actively display, stage or present shows and/or performances.
Thus, the 2nd par. of Sec. 59 imposing amusement taxes on admission fees to resorts,
etc. is void for lack of authority. But the tax on admission fees to boxing stadia must be
sustained, in light of Sec. 140.

DECISION.
Petition is granted.

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Sec. 140. Amusement Tax - (a) 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. xxx
5
where a general word or phrase follows an enumeration of particular and specific words of the same class or where the
latter follow the former, the general word or phrase is to be construed to include, or to be restricted to persons, things or
cases akin to, resembling, or of the same kind or class as those specifically mentioned.
Purpose of EG - to give effect to both the particular and general words, by treating the particular words as indicating the
class and the general words as including all that is embraced in said class, although not specifically named by the
particular words.
6
Show – a spectacle or display of something, typically an impressive one; Performance – an act of staging/presenting a
play, concert, or other form of entertainment.