Flashcards Studio

A city enacts Ordinance No. 2024-01 under Secs. 130 and 132 of the Local Government Code, imposing a local business tax on online travel platforms operating within its jurisdiction. The tax base is 0.5% of annual gross receipts from bookings processed in the city. The ordinance creates two tiers: large platforms with gross receipts over P100,000,000 are taxed at 0.6%, while small platforms with gross receipts at or below P100,000,000 are taxed at 0.4%. Platform A earns P120,000,000 and pays 0.6%; Platform B earns P90,000,000 and pays 0.4%. Platform B challenges the two-tier classification as arbitrary and discriminatory. The city defends the law as reasonably related to promoting local development and administrative feasibility.   (a)Identify the controlling doctrine governing local tax classifications under Secs. 130 and 132 and the test to apply. (b)Distinguish the controlling rule from other possible tax classifications. (c)Apply to Platform B’s challenge and state the likely outcome and rationale.