Cases assigned to Lilibeth R.

Carao
For Tax 2

Philippine Basketball Association vs Court of Appeals, Court of Tax Appeals and Bureau
of Internal Revenue
GR. 119122 August 8, 2000

FACTS:

The PBA received an assessment letter from the Commissioner of Internal Revenue (CIR) for the
payment of deficiency amusement tax.

The PBA contested the assessment by filing a protest with the CIR who denied the same. The
PBA then filed a petition for review with the Court of Tax Appeals (CTA), in which they held
against the PBA.

The PBA filed an appeal with the Court of Appeals which was also denied.

ISSUES: 

Whether the amusement tax on admission tickets to PBA games is a national tax.

Whether the cession of advertising and streamer spaces to Vintage Enterprises, Inc. subject to
amusement tax.

RULING:

YES. The Local Tax Code does not provide for professional basketball games but rather in PD
1959. It is clear that the "proprietor, lessee or operator of professional basketball games" is
required to pay an amusement tax of 15% of their gross receipts to the BIR, which payment is a
national tax. 

YES. The definition of gross receipts is broad enough to embrace the cession of advertising and
streamer spaces as the same embraces all the receipts of the proprietor, lessee or operator of the
amusement place. The law being clear, there is no need for an extended interpretation. 
DIGITAL TELECOMMUNICATIONS, INC. vs. CITY GOVERNMENT OF BATANGAS
GR. 156040 December 11, 2008

FACTS:

Petitioner was granted a 25-year franchise to install telecommunications systems under a law
which states that “The grantee shall be liable to pay the same taxes on its real estate, buildings,
and personal property exclusive of this franchise x x x.” As they were not being issued a Mayor’s
permit, Petitioner paid the Real Property Tax under protest arguing that the phrase “exclusive of
this franchise” means that only the real properties not used in furtherance of its franchise are
subject to Real Property Tax while those real properties which are used in its
telecommunications business are exempt from Real Property Tax.

ISSUE:

Are Petitioner’s real properties used in its telecommunications business exempt from Real
Property Tax?

HELD:

NO. Petitioner’s real properties, whether or not used in its telecommunications business, are
subject to Real Property Tax. The phrase “exclusive of this franchise” qualifies the term
“personal property.” This means that Petitioner’s legislative franchise, which is an intangible
personal property, shall not be subject to taxes. This is to put franchise grantees in parity with
non-franchisees as the latter obviously do not have franchises which may potentially be subject
to realty tax. There is nothing in the first sentence of Section 5 which expressly or even impliedly
exempts Petitioner from Real Property Tax. Petitioner’s reliance on the BLGF’s opinion stating
that real properties owned by telecommunications companies are exempt from Real Property Tax
is without basis as the BLGF has no authority to rule on claims for exemption from Real
Property Tax.