G.R. No. 183137 - Pelizloy Realty Corp. vs. Province of Benguet

Petitioner Pelizloy Realty Corporation, owner of Palm Grove Resort in Tuba, Benguet, challenged the Province’s authority to levy amusement tax on admission fees for resorts, swimming pools, bath houses, hot springs and tourist spots.
Respondent Province of Benguet enacted Provincial Tax Ordinance No. 05-107 (Benguet Revenue Code of 2005), effective January 1, 2006, imposing a 10% amusement tax on gross receipts from admission fees for the above venues and 30% on theaters, cinemas, concert halls, circuses, cockpits, dance halls and schools, night or day clubs.

Pelizloy filed an administrative appeal with the Secretary of Justice under Section 187, LGC, challenging the 10% tax as ultra vires. The appeal was deemed denied after 60 days lapsed.
On January 27, 2006, Pelizloy filed a Petition for Declaratory Relief and Injunction (Civil Case No. 06-CV-2232) before RTC, La Trinidad, Benguet, seeking to void Section 59(2), Article X of the Tax Ordinance.
On December 10, 2007, the RTC dismissed Pelizloy’s petition, upholding the Province’s authority under Section 140, LGC. Motion for reconsideration was denied on May 21, 2008.

Pelizloy elevated the case to the Supreme Court via Rule 45 petition on pure questions of law, contending:

Section 59(2), Article X imposes a prohibited percentage tax under Section 133(i), LGC.
Resorts and similar venues are not “other places of amusement” as defined in Section 140, LGC.

Province of Benguet contended that amusement tax on admission fees is expressly permitted by Section 140 and that the second paragraph of Section 59, Article X also validly applies to boxing stadia.

Does Section 59, Article X (second paragraph) of the Benguet Revenue Code of 2005 levy a prohibited percentage tax under Section 133(i) of the Local Government Code?
Are resorts, swimming pools, bath houses, hot springs and tourist spots covered by the “other places of amusement” clause in Section 140(a) of the Local Government Code, thereby authorizing provincial amusement tax on their admission fees?