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PHILIPPINE BASKETBALL ASSOCIATION v. CA

FACTS:

The petitioner received an assessment letter from the Commissioner of Internal Revenue for the payment of deficiency amusement tax. The assessment included a 75% surcharge and a 20% interest on the amount due. The petitioner contested the assessment but it was denied by the respondent Commissioner. The petitioner then filed a petition for review with the Court of Tax Appeals (CTA) but it was dismissed. The CTA ordered the petitioner to pay the deficiency amusement tax plus the surcharge and interest. The petitioner filed a motion for reconsideration but it was also denied. The petitioner appealed the CTA decision to the Court of Appeals, which affirmed the decision of the CTA. The petitioner then filed a petition for review with the Supreme Court, raising various arguments against the assessment of the amusement tax.

ISSUES:

  1. Is the amusement tax on admission tickets to PBA games a national or local tax?

  2. Is the cession of advertising and streamer spaces to Vintage Enterprises, Inc. (VEI) subject to the payment of amusement tax?

  3. If ever petitioner is liable for the payment of deficiency amusement tax, is it liable to pay a seventy-five percent (75%) surcharge on the deficiency amount due?

RULING:

  1. The amusement tax on admission tickets to PBA games is a national tax. The authority to levy and collect amusement taxes on admission is limited to the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses, and other places of amusement as provided in Section 13 of the Local Tax Code. Professional basketball games, including PBA games, are not included in this provision. PD 1959, which amended PD 1456, explicitly includes professional basketball games in the list of activities subject to amusement taxes, thereby establishing national jurisdiction over such taxes.

  2. The cession of advertising and streamer spaces to Vintage Enterprises, Inc. (VEI) is subject to the payment of amusement tax. The term "gross receipts" as defined in Section 123 (6) of the Tax Code includes the income derived from the cession of advertising and streamer spaces inside the venue. Thus, such income is subject to amusement tax.

  3. It is unclear from the partial digest whether the court made a ruling on the issue of the surcharge.

PRINCIPLES: