Who has the burden of paying amusement tax?

Exempting a person or entity from tax is to relieve or to excuse that person or entity from the burden of the imposition. In Film Developer Council v. Colon Heritage Realty Corp.,[1] it cannot be said that an exemption from amusement taxes was granted by Congress to the producers of graded films. Take note that the burden of paying the amusement tax in question is on the proprietors, lessors, and operators of the theaters and cinemas that showed the graded films. Thus, per City Ordinance No. LXIX:

CHAPTER XI – Amusement Tax

Section 42. Rate of Tax. – There shall be paid to the Office of the City Treasurer by the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia and other places of amusement, an amusement tax at the rate of thirty percent (30%) of the gross receipts from admission fees.

Section 43. Manner of Payment. – In the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the city treasurer before the gross receipts are divided between said proprietor, lessees, operators, and the distributors of the cinematographic films.

Similarly, the LGC provides as follows: Section 140. Amusement Tax. -

(a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees.

(b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the cinematographic films.

Simply put, both the burden and incidence of the amusement tax are borne by the proprietors, lessors, and operators, not by the producers of the graded films. The transfer of the amount to the film producers is actually a monetary reward given to them for having produced a graded film, the funding for which was taken by the national government from the coffers of the covered LGUs. Without a doubt, this is not an exemption from payment of tax.

[1] G.R. No. 203754, June 16, 2015.