OPCIÓN 3 — MEDICIÓN
7.1. Tabla completada de Certificación LEED
7.2.3 Energía y Atmósfera
c) Claim for refund of tax credit for erroneously or illegally collected tax, fee or charge
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Read Section 196, LGCQ: What is the rule on refunds?
The taxpayer must file a written claim within 2 years from the date of payment of tax or from the date when the taxpayer is entitled to refund.
--- 9. Civil Remedies by the LGU for collection of revenues
a) Local government’s lien for delinquent taxes, fees or charges
b) Civil Remedies, in general (i) Administrative action (ii) Judicial action
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Read Section 172-185, LGCQ: What is the nature of a local government’s lien?
Local taxes, fees, charges and other revenues constitute a lien, superior to all liens, charges, or encumbrances in favour of any person, enforceable by any appropriate administrative or judicial action (see Section 173, LGC)
Note: The lien may only be extinguished upon full payment of the delinquent local taxes, fees, and charges, including related surcharges and interest (see Section 173, LGC)
Q: What are the civil remedies available to the LGU for collection of revenues?
a. Administrative action
i. Distraint of personal property ii. Levy upon real property iii. Compromise
b. Judicial action
Note: Either of these remedies or both may be pursued concurrently or simultaneously at the discretion of the LGU concerned (see Section 174, LGC)
Q: How is the administrative remedy of distraint or levy exercised?
By administrative action thru distraint of goods, chattels, or effects, and other personal property or whatever character, including stocks and other securities, debts, credits, bank accounts and interest
in and rights to personal property, and by levy upon real property and interest in or rights to real property.
(see Section 174, LGC)
Note: (1) The remedies of distraint and levy may be repeated if necessary until the full amount due including all expenses is collected (see Section 184, LGC)
(2) For properties exempt from distraint or levy, see tax and the related charges. (Section 173, LGC) 2. Time for payment of Local taxes expires
3. Local Treasurer (LT), upon written notice, seizes sufficient personal property to satisfy the tax, and other charges (Section 175, LGC)
6. Officer posts notice in office of the chief executive of the LGU where the property is distrained and in at least 2 other public places specifying the time & place of sale, and distrained goods. The time of sale shall not be less than twenty (20) days after the notice. (Section 175, LGC)
7. Before the sale, the goods or effects distrained shall be restored to the owner if all charges are paid (Section 175, LGC)
Note: The next steps in the procedure will vary depending on whether the property distrained is disposed of within 120 days from distraint.
If disposed If not disposed 8. Officer sells the
goods at public auction to the highest bidder for cash. w/in 5 days, the local treasurer shall report sale to the local chief including all expenses, is collected. (Section 175, LGC)
Q: Outline the procedure for distraint of real property
1. Warrant of Levy issued by the Local Treasurer (LT), which has the force of legal execution in the LGU concerned. (Section 176, LGC) advertise sale of the property by:
a. posting notice at main entrance of LGU hall/building and in a conspicuous place in the barangay where property is located and b. by publication once a week for 3 weeks
(Section 178, LGC)
Note: In cases of levy for unpaid local taxes publication is once a week for 3 weeks
a. at the main entrance of the LGU building, or b. on the property to be sold, or
c. at any other place specified in the notice (Section 178, LGC)
Note: The next steps in the procedure will vary depending on whether, on one hand, there is a bidder and on the other, there is no bidder or the highest bid is insufficient to cover the taxes and other charges.
If there is a bidder If there is no bidder OR the LT shall report the
sale to the
7. LT shall purchase the property in behalf of the LGU (Section 181, LGC)
sanggunian (Section 178, LGC)
8. LT shall deliver to purchaser certificate of sale
9. Proceeds of sale in excess of delinquent tax, interest &
expenses of sale remitted to the owner (Section 178, LGC) 10. Within 1 year from
sale, owner may
redeem upon
payment of the 1.
delinquent tax, 2.
interest due, 3.
expenses of sale (from date of delinquency to date of sale) and 4. add’l interest of 2% per month on the purchase price from date of sale to date of redemption.
Delinquent owner retains possession and right to the fruits (Section 179, LGC) 11. LT returns to the
purchaser/bidder the price paid plus interest of 2% per month (Section 179, LGC)
12. If property is not redeemed, the local treasurer shall execute a deed of conveyance to the purchaser (Section 180, LGC)
Note: in cases of levy for unpaid local taxes, LT may purchase if there is no bidder or if the highest bid is insufficient (Section 181, LGC)
8. Registrar of Deeds shall transfer the title of the forfeited property to the LGU without need of a court order (Section 181, LGC)
9. Within 1 year from forfeiture, the owner, may redeem the property by paying to the local treasurer the full amount of the tax and the related interest and the costs of sale otherwise the ownership shall be vested on the local government unit concerned. (Section 181, LGC)
10. Sanggunian
concerned may, by ordinance sell and dispose of the real property acquired under the preceding section at public auction. (Section 182, LGC)
Note: (1) In both cases, levy may be repeated until the full amount due, including all expenses, is collected.
(2) This is important! To make our lives easier, I want you to note that the procedure for levying real properties to satisfy local taxes is….wait for it….the SAME as the levy procedure for satisfying RPT. Wait hindi pa tapos! It’s the same EXCEPT for two things: (1) Publication is once a week for 3 weeks for local taxes while it is once a week for 2 weeks for RPT and (2) for local taxes, the LGU may purchase levied property for two reasons– there is no bidder OR the highest bid is insufficient to cover the taxes
and other charges – but for RPT, the LGU may purchase for only one reason – there is no bidder! It’s that simple.
So memorize the procedure and just take note of these two distinctions between levying for local taxes and levying for RPT.
Q: How is the remedy of judicial action exercised?
The LGU concerned may institute an ordinary civil action with the regular courts for the collection of delinquent taxes within 5 years from the date the taxes, fees or charges become due (see Section 138 in relation to Section 194, LGC)
--- B. REAL PROPERTY TAXATION --- Q: What are real property taxes?
These are direct taxes imposed on the privilege to use real property such as land, building, machinery and other improvements unless specifically exempted.
Note: Before we can even talk about real property taxation, I would have to state the obvious that this tax only applies to, well, real property. In any problem involving real property taxation, you must first determine if it’s real property or not. If it’s not real property, then it’s not subject to real property taxation. Thus, I’ll discuss what are considered real properties for purposes of RPT.
Q: What are considered real properties?
There is no definition provided for in the LGC.
Reference must be made to Article 415 of the Civil Code, to wit.
Article 415. The following are immovable property:
(1) Land, buildings, roads and constructions of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable;
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object;
(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements;
(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant;
(9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes and other real rights over immovable property.
Note: Personal property may be classified as real property for purposes of taxation.
Q: Are the steel towers of an electric company real property for the purpose of RPT?
No. In BOARD OF ASSESSMENT APPEALS V. MERALCO[JAN.311964], the Supreme Court held that the steel towers of MERALCO do not constitute real property or the purpose of the real property tax.
The steel towers were regarded as poles and under its franchise Meralco's poles are exempt from taxation. Moreover, the steel towers were not attached to any land or building. They were removable from their metal frames.
Q: Define machinery.
Machinery embraces machines, equipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached, permanently or temporarily, to the real property. It includes the physical facilities for production, the installations and appurtenant service facilities, those which are mobile, self-powered or self-propelled, and those not permanently attached to the real property which are actually, directly, and exclusively used to meet the needs of the particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes (see Section 199(o), LGC)
Q: What types of machinery are subject and not subject to RPT?
1. Machinery that is permanently attached to land and buildings is subject to the real property tax, even though this is actually, directly, and exclusively used for religious, charitable or educational purposes.
2. Machinery that is not permanently attached to real estate is:
a. Subject to the real property tax if it is an essential and principal element of an industry, work or activity without which such industry, work or activity, cannot function;
b. Not subject to the real property tax if it is not an essential and principal element of an industry, work or activity.
3. Notwithstanding rules 1 and 2, machinery of non-stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes is not subject to real property tax. (see DOF LOCAL FINANCE CIRCULAR 001-2002[APRIL 25,2002])
Q: Define improvement.
Improvement is a valuable addition to the property or an amelioration in its condition amounting to more than a repair or replacement of parts. (see Section 199(m), LGC)
Q: What are the requisites for taxability of an improvement?
1. It must enhance the value of the property 2. It must be separately assessable
3. It can be treated independently from the main property.