8/9/2019 Iloilo Bottlers v. City of Iloilo (1988)
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Iloilo Bottlers v City of Iloilo | G.R. No. L-52019 (August 19,
19 !
"AC#$
Iloilo Bottlers Inc., a company in the business of bottling and
selling soft drinks, wasdemanded by the City of Iloilo to pay an
amount of 59,505 in the form of an licensetax the city claims were
due to it under rdinance !o. 5, "eries of #9$0. It pro%idesthat
manufacturers, bottlers, and distributers of soft drinks in Iloilo
are sub&ect to amunicipal license tax of #0 centa%os per case
of '( bottles. Iloilo Bottling Inc.asserted howe%er that since
their plant base has mo%ed to municipality of )a%iashortly after
the aforementioned ordinance was enacted, they are not liable for
anytaxes. *he city howe%er, still demanded taxes and also demanded
back taxes underthe claim that Iloilo Bottlers is still
distributing in the city of Iloilo since its transfer.
Iloilo Bottlers paid the demanded license tax and back taxes
under protest.
I$$%&
+o! Iloilo Bottlers Inc. is free from liability and is thus
entitled to a tax refund.
' L)ING
N . "itus of taxation place of taxation- depends on %arious
factors including thenature of the tax and sub&ect matter
thereof both of which must be scrutini ed toreach a fair decision.
*he tax ordinance enacted by the City of Iloilo imposes a taxon
persons, /rms, and corporations engaged in the business of
distribution of softdrinks, manufacture of soft drinks, and
bottling of soft drinks within the territorial
&urisdiction of the City of Iloilo. *here is no 1uestion
that Iloilo Bottlers has mo%edout of Iloilo City2s &urisdiction
and into the municipality of )a%ia where its plant nowstands3
therefore, the latter two conditions for taxation are no longer
applicable.
*he ruling now depends upon whether or not Iloilo Bottlers can
be considered asdistributing its products within Iloilo city.
Iloilo Bottlers disclaims liability, saying thatit does not
independently distribute but rather acti%ely sells directly to
its
consumers. 4istribution is therefore only incidental to its
business. Iloilo Bottlers isindeed considered as distributing
within the city since while the manufacturing andbottling occurs
outside of Iloilo City, the drinks are sold in Iloilo city to
consumers ina mo%ing store6 fashion. *he transactions are
considered to occur within the city.
*he tax imposed under rdinance !o. 5 is an excise tax. By its
nature, the power tole%y an excise tax depends upon the place where
the business is done, or theoccupation is engaged in, or where the
transaction took place. In this case, it is a
