The payment of local business tax (LBT) to local government units (LGUs) is usually regarded as a lot less complicated than paying internal revenue taxes to the Bureau of Internal Revenue (BIR). However, failure to comply and pay the correct LBT may result in a more adverse and immediate effect on the issuance of the mandatory business permit that an ongoing enterprise needs to operate.
Given that a business may operate in various cities or municipalities in separate jurisdictions, it is important to understand situs, or the place of taxation relating to the payment of LBT. It is worth noting that for LGUs to each get a fair share of local business taxes from taxpayers whose businesses operate in more than one city or municipality, laws were enacted for the proper allocation of those taxes.
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