GIRLIE A. NABUS F.

Classification of Taxes
No. 3. As to the object or subject
Section A-III matter of the tax
Villanueva V City Of Iloilo a. Property
b. Personal
(26 SCRA 578) c. Poll/Capitation
d. Excise
FACTS:
Relying on the passage of RA 2264 or the Local Autonomy Act, Iloilo enacted
Ordinance 11 Series of 1960, imposing a municipal license tax on tenement houses in
accordance with the schedule of payment provided by therein. Villanueva and the other
appellees are apartment owners from whom the city collected license taxes by virtue of
Ordinance 11. Appellees aver that the said ordinance is unconstitutional for RA 2264
does not empower cities to impose apartment taxes; that the same is oppressive and
unreasonable for it penalizes those who fail to pay the apartment taxes; that it
constitutes not only double taxation but treble taxation; and, that it violates uniformity of
taxation.

Issues:
1. Does the ordinance impose double taxation?
2. Is Iloilo city empowered by RA 2264 to impose tenement taxes?

Held:
While it is true that appellees are taxable under the NIRC as real estate dealers,
and taxable under Ordinance 11, double taxation may not be invoked. This is because
the same tax may be imposed by the national government as well as by the local
government. The contention that appellees are doubly taxed because they are paying
real estate taxes and the tenement tax is also devoid of merit. A license tax may be
levied upon a business or occupation although the land or property used in connection
therewith is subject to property tax. In order to constitute double taxation, both taxes
must be the same kind or character. Real estate taxes and tenement taxes are not of
the same character.
RA 2264 confers local governments broad taxing powers. The imposition of the
tenement taxes does not fall within the exceptions mentioned by the same law. It is
argued however that the said taxes are real estate taxes and thus, the imposition of
more the 1 per centum real estate tax which is the limit provided by CA 158, makes the
said ordinance ultra vires. The court ruled that the tax in question is not a real estate
tax. It does not have the attributes of a real estate tax. By the title and the terms of the
ordinance, the tax is a municipal tax which means an imposition or exaction on the right
to use or dispose of property, to pursue a business, occupation or calling, or to exercise
a privilege. Tenement houses being offered for rent or lease constitute a distinct form of
business or calling and as such, the imposition of municipal tax finds support in Section
2 of RA 2264.