I. Overview and practical significance

“Mayor’s permit” (often called a business permit) is the local government authorization required before a business may lawfully operate within a city or municipality. It is issued by the Local Government Unit (LGU) through the Business Permits and Licensing Office (BPLO) or equivalent office, typically after compliance with local tax, zoning/land use, building, sanitary, fire safety, and other regulatory requirements.

“Prescription” in this context refers to time limits affecting:

when the LGU may assess/collect local taxes, fees, and charges tied to permitting;
when the LGU may prosecute or penalize violations (administrative, civil, or criminal);
when a business may challenge the issuance, denial, suspension, closure, assessment, or collection actions connected to a mayor’s permit.

Because the mayor’s permit system sits at the intersection of local taxation, regulatory police power, and administrative law, the applicable prescriptive periods depend on the nature of the issue (tax vs. regulatory), the type of action (assessment vs. collection vs. appeal vs. prosecution), and the forum (LGU, courts, or quasi-judicial bodies).

II. Legal framework governing mayor’s permits and prescriptive periods

A. Core statutes and sources

Local Government Code of 1991 (LGC) (Republic Act No. 7160)
- Governs LGU power to levy taxes, fees, and charges; issue licenses and permits; regulate businesses; enforce ordinances; and impose penalties.
Local Tax Ordinances and Revenue Codes of each LGU
- Create the specific permit-related fees and local business taxes (LBT), define due dates, surcharge/interest, and local procedures.
Civil Code provisions on prescription (suppletory application)
- Applies to civil actions when no special law provides otherwise.
Revised Penal Code / Special Penal Laws / Local Ordinances
- Ordinance violations have their own limitation rules (often via special laws on ordinance violations and/or general penal prescription rules, depending on how the local ordinance is framed and enforced).
Administrative law principles (finality of administrative action, exhaustion of administrative remedies, due process)
- Often determine when a prescriptive period begins to run and whether a challenge is barred by failure to timely appeal.

III. The two “tracks” of mayor’s permit issues: regulatory vs. revenue

A mayor’s permit issue usually falls into one (or both) of these tracks:

Track 1: Regulatory/police power issues

Examples:

Denial, suspension, non-renewal, or revocation for violations of ordinance conditions, zoning, sanitation, building use, nuisance, or public safety;
Closure orders and padlocking;
Operating without permit or outside the scope of permit.

These may involve:

Administrative actions (permit denial/revocation/closure) and the periods to appeal;
Enforcement and penalties under ordinances, including possible criminal prosecution for ordinance violations.

Track 2: Revenue/local taxation issues

Examples:

Assessment of local business tax (LBT), community tax, and other local impositions linked to business operation;
Permit fees (license fees, regulatory fees, garbage fees, signage fees, occupational fees) and related surcharges/interest;
Collection actions (administrative collection measures, civil action in court).

These involve:

Prescriptive periods for assessment and collection;
Strict protest/appeal deadlines for taxpayers.

Understanding which track you are on is the first step, because tax prescription rules are usually more specific and rigid, while regulatory matters often hinge on appeal periods and due process more than on classical “prescription.”

IV. Prescription and time limits in revenue/local taxation issues tied to permits

A. Local Business Tax (LBT) and similar local taxes: assessment vs. collection

A business permit is often withheld until LBT (and other local taxes) are paid. Disputes commonly arise from:

alleged underdeclaration of gross sales/receipts;
reclassification of business activity into higher tax brackets;
retroactive assessments for prior years;
imposition of surcharges/interest/penalties.

Key distinction:

Assessment = the LGU’s formal determination of the amount due.
Collection = the act of enforcing payment (administratively or through court action).

Local tax ordinances usually provide:

when taxes are due (often annually, sometimes quarterly for certain businesses),
when penalties attach, and
what procedure the LGU must follow for assessment and collection.

Where the LGC or a valid ordinance sets prescriptive periods, those govern. In local tax controversies, the taxpayer’s right to protest is typically governed by short, mandatory deadlines, and missing them can bar the claim even if the tax is arguably unlawful.

1) Prescriptive period for assessment (general concept)

As a general framework used in Philippine tax systems (including local taxation under special rules), LGUs are typically limited to assessing within a certain number of years from the time the tax became due or from the filing of a required return/statement, subject to longer periods in case of fraud or failure to file when required. The exact number of years is controlled by the LGC and/or the implementing local ordinance and must be read alongside rules on discovery of underdeclaration and issuance of notices.

Practical takeaway: when an LGU attempts to assess “back taxes” as a condition for permit renewal, the first question is whether the assessment is still within the allowable period and whether proper assessment procedure (including notice and opportunity to be heard) was followed.

2) Prescriptive period for collection (general concept)

Even if an assessment is timely, the LGU must collect within the allowable period counted from the time the assessment becomes final/settled or from the time the tax became due, depending on the governing rule. Collection may be:

administrative (e.g., levy, distraint where authorized by ordinance and consistent with law), or
judicial (civil action).

Practical takeaway: “timely assessment” does not automatically mean “timely collection.” A stale collection effort may be barred even if the original assessment once existed.

3) Interruption/suspension of prescription

In tax settings, prescription can be interrupted or suspended by events such as:

taxpayer’s written acknowledgement of the debt;
filing of a protest/appeal that suspends collection while pending (depending on the rules);
execution of waiver/undertaking in some contexts (but validity depends on local rules and due process);
the LGU’s filing of the proper collection action in court within the period.

Practical caution: Businesses sometimes “settle” to get a permit released and later question the payment. Whether recovery is possible will depend on protest rules and whether payment was “under protest” and timely.

B. Fees, charges, and “permit fees”: regulatory fee vs. tax and how prescription differs

Many items paid at the time of permit application are labelled “fees.” Legally, they may be:

Regulatory fees (police power) meant to defray regulation costs; or
Revenue measures (taxes) in substance.

The classification matters because:

Challenges to taxes are subject to local tax protest procedures and strict time bars.
Challenges to regulatory fees may be treated as challenges to an administrative act or ordinance validity, and may follow different time limits and causes of action.

In practice, however, LGUs often integrate collection of both into a single permitting workflow. A business disputing a component must isolate:

the legal basis (ordinance section);
whether it is a tax/fee/charge;
the dispute mechanism and deadline.

C. Taxpayer remedies and their strict deadlines (protest and appeal structure)

Local tax disputes are commonly lost not because the taxpayer is wrong on the merits, but because the taxpayer missed a deadline.

1) Protest of assessment

When an LGU issues an assessment (e.g., deficiency LBT), the taxpayer typically must file a written protest within a short statutory/ordinance period from receipt of the assessment. Failure to protest on time usually makes the assessment final and demandable.

2) Appeal to higher authority / court

After denial or inaction on the protest, the taxpayer must elevate the matter within a further deadline. Depending on the statutory design and jurisprudence, local tax cases may be brought to the appropriate forum after exhaustion of the prescribed administrative steps.

Practical point: Many LGUs delay acting on protests. The rules often address inaction (deemed denial after a period), triggering the appeal clock. Businesses should track receipt dates and deemed denial dates carefully.

3) Payment under protest vs. refund

A business might pay to avoid closure or to secure renewal and then seek a refund. Refund actions generally require:

that payment was not “voluntary” in the sense of waiving rights (often done via “under protest” mechanisms); and
that the claim for refund is brought within the allowable period from payment or from the accrual of the cause of action.

If payment is made without following required protest/refund procedure, recovery is difficult.

V. Prescription and time limits in regulatory/police power permit issues

A. Denial, non-renewal, suspension, revocation: appeal periods and finality

Regulatory actions affecting a mayor’s permit are typically administrative in nature. The key “time-bar” is not always called “prescription” but rather:

period to appeal an administrative decision, and
doctrines of finality and exhaustion.

If a business does not timely appeal a denial or closure order within the available administrative channels (as set by ordinance, rules, or general administrative law), the decision can become final, and later court challenges may be dismissed for:

failure to exhaust administrative remedies,
lateness/laches, or
mootness if the period applied to a particular permit year has passed.

Practical pattern: A mayor’s permit is usually annual. A challenge to a denial for Year X can become academically moot if the business only litigates after Year X ends, unless the issue is capable of repetition yet evading review or involves continuing legal consequences.

B. Closure orders and padlocking: urgency, due process, and immediate remedies

Closure for operating without a permit or for violations is often enforced swiftly. Time limits matter because:

A closure order is typically immediately executory unless restrained.
Remedies (administrative appeal, motion for reconsideration where allowed, and court petitions seeking injunctive relief) are time-sensitive.

From a “prescription” lens, these disputes turn on:

timeliness of challenge, and
whether the business was afforded notice and hearing (or whether summary closure is allowed under specific conditions such as blatant lack of permit, nuisance, or threats to public health/safety).

C. Operating without a permit: ordinance offenses and criminal prescription

Operating without a mayor’s permit may be penalized under local ordinances. Enforcement may be:

administrative (closure, fines, denial of renewal), and/or
criminal (prosecution for ordinance violation, if the ordinance provides penal sanctions enforceable in court).

Whether and when prosecution prescribes depends on:

the penal provisions of the ordinance,
the classification of the offense and the applicable rule for prescription of offenses,
when the violation is deemed committed (single act vs. continuing offense), and
when proceedings are instituted.

Continuing violations: Operating daily without a permit can be treated as a continuing violation for certain enforcement purposes; however, the precise treatment depends on ordinance wording and prosecutorial practice.

VI. Civil actions related to mayor’s permit disputes: Civil Code prescription and special rules

Some disputes are framed as civil actions, such as:

damages for unlawful closure,
injunction to stop enforcement of an allegedly invalid ordinance,
declaratory relief on the validity of an ordinance provision,
recovery of sums paid, or
tort-like claims against officials (subject to immunities and conditions).

A. General Civil Code prescription (suppletory)

When no special law provides a period, the Civil Code supplies prescriptive periods depending on the cause of action (written contract, quasi-delict, etc.). But in permit disputes, courts often look first for:

special statutory procedures (especially for tax disputes),
administrative remedy exhaustion, and
whether the action is essentially a collateral attack on a tax assessment or permit denial.

B. Doctrine-driven “time bars” (laches and mootness)

Even if an action is not strictly prescribed, it may be barred by:

laches (unreasonable delay causing prejudice), and/or
mootness due to annual permit cycles.

These doctrines can effectively serve as time limits in practice.

VII. Common “mayor’s permit prescription” scenarios and how to analyze them

Scenario 1: LGU demands “back taxes” for permit renewal

Issues to check:

Is the demand based on a formal assessment for prior years, or merely an informal computation?
Is the assessment still within the allowable assessment prescription period?
Was proper notice issued and was the taxpayer given an opportunity to contest?
Has the taxpayer’s deadline to protest lapsed?
Is the LGU trying to collect beyond the collection prescription period?
Is the business paying under protest or compromising merely to secure the permit?

Scenario 2: Business paid contested fees for release of permit and now wants refund

Issues to check:

Was the payment made under the required protest/refund mechanism?
Is the claim filed within the refund prescriptive period counted from payment or accrual?
Is the exaction a tax in substance (triggering tax protest rules) or a regulatory fee?

Scenario 3: Closure order for alleged violations; business challenges months later

Issues to check:

What is the ordinance’s appeal mechanism and deadline?
Was there a final administrative action that became unappealed and final?
Is the case now moot because the permit year passed?
Did the business pursue immediate judicial relief when closure happened (timeliness affects equitable relief)?

Scenario 4: Ordinance violation case filed long after alleged unpermitted operation

Issues to check:

What prescription rule applies to ordinance violations and the penalty classification?
Was the violation continuing?
When was the case deemed instituted (complaint filing, information filing, etc.)?

VIII. Best practices for businesses and LGUs (time-limit compliance)

For businesses

Keep a compliance calendar: renewal deadlines, due dates for local taxes, and documentary submission dates.
Upon receiving any assessment or denial, document date of receipt; deadlines run from receipt.
If paying disputed items to secure a permit, consider formal payment under protest mechanisms and preserve evidence of compulsion.
Request in writing the legal basis (ordinance provisions) for each item demanded.
Avoid signing broad waivers/releases unless fully understood; they can undermine later remedies.

For LGUs

Ensure assessments are issued within prescriptive periods and comply with notice and hearing requirements.
Separate regulatory fees from tax assessments procedurally where possible.
Publish clear BPLO guidelines on appeals and timelines; due process failures frequently defeat enforcement actions.

IX. Key takeaways

“Prescription periods” for mayor’s permit issues depend on whether the matter is revenue (tax/fees/charges) or regulatory (police power).
In revenue disputes, the most critical time bars are the period to protest an assessment and the LGU’s assessment/collection prescription.
In regulatory disputes, the practical “prescription” is the appeal period and the doctrines of finality, exhaustion, laches, and mootness.
Many disputes turn less on the substantive correctness of the LGU’s demand and more on whether parties complied with deadlines and procedure.