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City of Manila v Coca-Cola Bottlers Philippines

Facts
Coca Cola Bottlers operates and maintains a sales office in the City of Manila. It has
been paying local business tax only under Tax Ordinance 7794, under the same
ordinance; it was exempted from paying business tax being a manufacturer of an
article of commerce. The ordinance was subsequently amended by the City of
Manila by enacting Tax Ordinance 7988, deleting the provision which granted an
exemption from paying business taxes. After a year, Tax Ordinance 8011 amended
Tax Ordinance 7988. Both Ordinances were then declared by the Court null and void
in a case filed by Coca-Cola being in contravention of the LGC and that tax
ordinance 8011 could not cure the defects of the law it amended. Before both
ordinances were declared null and void, the City of Manila assessed Coca-Cola of its
taxes together with the penalties and interest. Coca-Cola filed a protest on the
ground that the said assessment amounted to double taxation as it was taxed twice
under sections 14 and 21 of Tax Ordinance 7794 as amended by Tax Ordinance No.
7988 and No. 8011.

Issue:
a. Is there double taxation
b. Is double taxation constitutional

Held:
a. The Court held that there is indeed double taxation if Coca-Cola is subjected to the
taxes under both Sc. 14 and 21 of Tax Ordinance No. 7794, since these are being
imposed: (1) on the same subject matter the privilege of doing business in the City
of Manila; (2) for the same purpose to make persons conducting business within the
City of Manila contribute to city revenues; (3) by the same taxing authority
petitioner City of Manila; (4) within the same taxing jurisdiction within the territorial
jurisdiction of the City of Manila; (5) for the same taxing periods per calendar year;
and (6) of the same kind or character a local business tax imposed on gross sales or
receipts of the business.

b. No. Double taxation means taxing the same property twice when it should be taxed
only once; that is, taxing the same person twice by the same jurisdiction for the
same thing. It is obnoxious when the taxpayer is taxed twice, when it should be but
once. Otherwise described as direct duplicate taxation, the two taxes must be
imposed on the same subject matter, for the same purpose, by the same taxing
authority, within the same jurisdiction, during the same taxing period; and the taxes
must be of the same kind or character.

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