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Reagan v. CIR

The petitioner, a US citizen working at Clark Air Base in the Philippines, sold his car to another US citizen working at the base and was assessed income tax by Philippine authorities. He argued the base was not part of Philippine territory. The Supreme Court ruled that while the US has rights over the base, it remains part of Philippine territory and subject to its laws, including income tax. As an archipelagic state, the Philippines has sovereignty over all waters enclosed by archipelagic baselines regardless of depth or distance from shore. Therefore, the income tax was properly collected.

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Rommel Mancenido Lagumen
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87 views1 page

Reagan v. CIR

The petitioner, a US citizen working at Clark Air Base in the Philippines, sold his car to another US citizen working at the base and was assessed income tax by Philippine authorities. He argued the base was not part of Philippine territory. The Supreme Court ruled that while the US has rights over the base, it remains part of Philippine territory and subject to its laws, including income tax. As an archipelagic state, the Philippines has sovereignty over all waters enclosed by archipelagic baselines regardless of depth or distance from shore. Therefore, the income tax was properly collected.

Uploaded by

Rommel Mancenido Lagumen
Copyright
© © All Rights Reserved
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CASE FACTS ISSUES RULING

Topic:
Philippine
State The petitioner is a citizen of the United State Yes, the decision of the CTA as of May 12, 1966 denying the refund of P2,979.00 as the income tax paid by petitioner is affirmed.
and an employee of Bendix Radio, Divison of Therefore the Supreme Court sustained the decision of the Court of Tax Appeals rendering the petitioner liable of the income tax arising
Bendix Aviation Corporation, which provided from the sale of his automobile that have taken place in Clark Air Field which is within our territory to tax.
Territory-The
technical assistance to the United States Air
Archipelago
Force was assigned at the Clark Air Base The Clark Air Base is one of the bases under lease to the American  armed forces by virtue of the Military Bases Agreement which
Concept
Pampanga, honor about July 7, 19. Nine states that a “national of the US serving or employed in the Philippines in connection with the construction, maintenance, operation, or
months, before his tour duty expires,
defense of the bases and residing in the Philippines only by reason such unemployment is not to be taxed on his income unless derived
petitioner imported a tax free 1960 Cadillac
car which valued at $6443.83. More than two in the bases which one clearly derived the Phil.
The months after the car was imported, petitioner
Philippine requested the Clark Air Base Commander for
Archipelago a permit to sell the car. The request was
Whether or RATIO DECIDENDI:  No. The said foreign military bases is not a foreign soil or territory for purposes of income tax legislation. Philippine
granted with the condition that he would sell not the said jurisdictional rights including the power to tax are preserved.  
it to a member of the United States Armed income tax
Forces or an employee of the U.S. Military of P2979.00 The Philippine is an independent and sovereign country or state. Its authority may be exercised over its entire domain. Its laws govern
Bases. was legally therein and everyone to whom it applies must submit to its term. It does not prelude from allowing another power to participate in the
collected by exercise of jurisdictional rights over certain portions of its territory. Such areas sustain their status as native soil and still subject to its
On July 11, 1960, petitioner sold the car to respondent authority. Its jurisdiction may be diminished but it does not disappear.
Reagan V.
CIR Willie Johnson for $6600, a private in US from
Marine Corps, Sangby Point, Cavite as petitioner. And, an archipelagic State has sovereign power that extends to the waters enclosed by
shown by a bill of sale executed at Clark Air
Base. On the same date William Johnson Jr. the archipelagic baselines, regardless of their depth or distance from the coast. It is
sold the car to Fred Meneses for P32,000 as further stated that the regime of archipelagic sea lanes passage will not affect the
evidence by a deed of sale executed in
Manila. status of its archipelagic waters or the exercise of sovereignty over waters and air
G.R. No. L-
26379    
space, bed and subsoil and the resources therein.
Petitioner questioned the payment of an
income tax assessed on him by public
  respondent on an amount realized by him on
a sale of his automobile to a member of the
 
December US Marine Corps, the transaction having
27, 1969 taken place at the Clark Field Air Base.
Petitioner contends that the base is outside
Philippine territory and therefore beyond the
jurisdictional power to tax. 

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