LOCAL government units (LGUs) enjoy the constitutional mandate to levy taxes, fees, and charges subject to the limitations set by the Philippine Congress. (Section 5, Article 10, 1987 Constitution). Any dispute regarding the decisions of LGUs with respect to the imposition of local taxes may be brought to the Regional Trial Courts (RTCs).

The Court of Tax Appeals (CTA), on the other hand, is empowered to review decisions over local tax cases pronounced by the RTCs, pursuant to its power embodied in Section 7(a)(3) of Republic Act (RA) 1125, as amended by RA 9282.