Pelizloy Realty Corp. vs Province of Benguet, GR No.

183137, 10 April 2013

1. Pelizloy Realty Corporation owns Palm Grove Resort in Tuba, Benguet, which
has facilities like swimming pools, a spa and function halls.
2. Provincial Board of Benguet approved the Provincial Tax Ordinance No. 05-107
which includes “Amusement Tax on Admission.”
3. The tax ordinance levied a 10% amusement tax on gross receipts from
admissions to resorts, swimming pools, bath houses, hot springs and tourist
spots.
4. Pelizloy's being affected by the tax ordinance, filed an appeal/petition citing that
the Tax Ordinance is an ultra vires act but was denied by the RTC for lack of
merit.
5. Pelizloy filed another petition questioning the legality of the Tax Ordinance as
being a prohibited percentage tax
6. The Province of Benguet argued that the Tax Ordinance does not levy a
percentage tax because the imposition is not based on the total gross receipts
but only the gross receipt of the admission fees collected.
7. The Supreme Court defined percentage tax as a “tax measured by a certain
percentage of gross selling price or gross value in money of goods sold, bartered
or imported, or of the gross receipts or earnings derived by any person engaged
in the sale of services.
8. The amusement taxes are fixed at a certain percentage of the gross receipts
incurred by certain specified establishment are correctly argued by Pelizloy,
however, local governments are not barred from levying amusement taxes even
if these are forms of percentage tax.
9. Based on Section 140 of the Local Government code, it expresses that
amusement tax may be collected from proprietors, lessors or operators of
theaters, cinemas, concert halls, circuses, boxing stadia and other places of
amusement.
10. Whether or not Pal Grove Resort is considered as a place for amusement?
11. No, it is not considered as place for amusement, the Local Government Code
enumerated the business considered as “other places for amusement”, and it did
not include resorts, swimming pools, bath houses, hot springs and tourist spots.
12. In determining what is meant by “other places of amusement,” the doctrine
ejusdem generis is applied.
13. Ejusdem generis , “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.
14. The purpose of this doctrine is 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 word.
15. Applying the doctrine to the case at bar, the words connected to the term
amusement in the statute are, theaters, cinemas, concert halls, circuses, boxing
stadia where their commonalities are artistic expression, since resorts, swimming
pools, bath houses, hot springs and tourist spots are not forms of artistic
expression, we could conclude that the Tax Ordinance lacks the authority to levy
taxes in such business.