I.

LIMITATIONS ON TAXING POWER

A. INHERENT LIMITATIONS
1. Public purpose - proceeds must be used to pay for the cost of governance and
shall not benefit any private individual or entity. (public purpose)
2. Territoriality - a state can impose and levy a tax on property and persons under
its jurisdiction.
3. International Comity - property of a foreign state may not be taxed by another
state.
4. Non-delegation of taxing power - the power to enact tax laws is vested solely to
the legislative branch of the government.
5. Exemption - government agencies performing governmental functions are
exempted from taxation while those performing proprietary functions are subject to tax
unless expressly exempted from taxation.

B. CONSTITUTIONAL LIMITATIONS
-limitations expressly stated in the constitution or implied from its provisions.

A. Due process of law

B. Equal protection of law
C. Uniformity in taxation
D. Progressive scheme of taxation
E. Non-imprisonment for non-payment of poll tax
F. Non-impairment of the obligations of contracts
G. Free worship rule
H. Exemption of charitable institutions, churches, parsonages, or convents, mosques and
non-profit cemeteries and all lands, buildings and improvements actually, directly and exclusively used
in religious, charitable and educational purposes.
I. Non-appropriations of public funds or property for the benefit of any church, sect or
system of religion, etc.
J. No money shall be paid out of the Treasury except in pursuance of an appropriations
made by law.
K. Concurrence of majority of all members of congress for the passage of law granting tax
exemption.
L. Non-diversification of tax collections.
M. Non-impairment of the jurisdiction of the Supreme Court to review tax cases.
N. Appropriations, revenue or tariff bills shall originate exclusively in the House of
Representatives but the Senate may propose or concur with amendments.
O. Each local government unit shall exercise the power to create its own sources of
revenue and shall have a just share in the national taxes.