Double Taxation: What Constitutes Double Taxation

TAXATION QUESTION 1996

X, a lessor of a property, pays real estate tax on the premises, a real estate dealer's tax based on rental receipts and income tax on the rentals. X claims that this is double taxation? Decide.

SUGGESTED ANSWER:

There is no double taxation. DOUBLE TAXATION means taxing for the same tax period the same thing or activity twice, when it should be taxed but once, by the same taxing authority for the same purpose and with the same kind or character of tax. The REAL ESTATE TAX is a tax on property; the REAL ESTATE DEALER'S TAX is a tax on the privilege to engage in business; while the INCOME TAX is a tax on the privilege to earn an income. These taxes are imposed by different taxing authorities and are essentially of different kind and character (Villanueva vs. City of Iloilo, 26 SCRA 578).