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                       The Attorney                General of Texas
                                           March    26,    1981
MARK WHITE
Attorney General

                   Honorable Lias B. “Bubba” Steen                Opinion No. Mg- 316
                   Commissioner
                   Texas Department of Labor and                 Re: Computation of gross receipts
                     Standards                                   tax imposed under article 850~1,
                   P. 0. Box 12157                               V.T.C.S.
                   Austin, Texas 78711

                   Dear Mr. Steen:

                          You state that boxing and wrestling promoters are questioning the
                   Commission’s method of assessing three percent of the total gross receipts
                   of taxable athletic performances      in satisfaction of the tax imposed by
                   article 8501-1, section D(a), V.T.C.S. It appears that the promoters feel that
                   the tax should be calculated on the remainder of the total receipts after
                   deducting therefrom the three percent tax. That is, since the ticket price
                   necessarily includes the three percent tax, the tax of three percent should
                   be figured only on the net amount of the receipts. This method, they claim,
                   will avoid the erroneous imposition of a tax upon a tax.

                         Your question is as follows:

                               Does the terminology     ‘gross receipts’ as used in
                               section 11 of article 8501 mean the sum total of alI
                               admission charges for a given event?

                           Article 850~1, section 11(a), V.T.C.S., assesses and levies the tax in
                    question by directing that within 72 hours after the termination of the
                    taxable event, the Texas Department        of Labor and Standards shall be
                    furnished by the promoter thereof a verified report on a form furnished by
                    the department showing the number of tickets sold, prices charged, and
                    amOUnt    of gross receipts obtained from the event, and a cashier’s check or
                    money order made payable to the state of Texas in the amount of three
                       rcent of the total gross receipts of the event shall be attached tothe
                   everi led report.

                           It is hard to conceive how the next foregoing referred to language of
                   the statute could have been made more specific as to the subject matter of
                   the tax. A thorough search of the authorities, foreign and domestic, that
                   might have some bearing on the multiple term “total gross receipts,” has
                   revealed nothing as near in point as the commonly understood dictionary
                   definition of the word “gro.W: “It] he ‘gross’ earnings, receipts, or the like,




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        Honorable Lias B. “Bubba” Steen - Page Two (MW-316)




        are  the entire earnings, receipts, or. the like, under consideration,      without any
        deduction for expenses incurred:!’ Websters New International Dictionary,   954 (191B.

           It is obvious that the method of calcuation advanced by the promoters will
    produce a tax assessment of only 2.91% instead of the 3% levied by the statute on the
    “total gross receipts ” In fact, this 3% tax in question cannot be a tax on a tax for the
    simple reason that it is not paid by the purchaser of the ticket. It is assessed against
    the promoter of the athletic event and is paid from his profits, unlike the sales tax
    which is paid by the purchaser.     Many taxes similar to the boxing and wrestling tax
    have graced the state and federal governments for many years, Among these we will
    find the income tax and various types of gross receipts taxes, none of which seem to
    have ever been attacked on the grounds here raised by the boxing and wrestling
    promoters.    The mixed beverage gross receipts tax is imposed on the permittee and
    paid from his total gross receipts without any deduction for the amount of his tax. The
    customer who purchases a mixed beverage pays no tax at all on such beverage,
    consequently there can be no tax on a tax in such case, as there cannot be in the
    instant case where the ticket purchaser also pays no tax. The income tax is paid from
    the total taxable income of the taxpayer without any deduction for the amount
    calculated for. the tax. If such a deduction was provided by law, it would only serve to
    diminish the tax percentage specified in the tax levy. The legislature specified 3% of
    the total gross proceeds as the tax required by the Texas Boxing and Wrestling Act, not
    2.91% as urged by the promoters.

           We conclude that the term “gross receipts” as used in section ll(a) of article 8501-
    l, V.T.C.S., means the sum total of all admission charges for a given event.

                                           SUMMARY

                       The term “total gross receipts” denoting the subject matters
                   of the three percent tax levied by article 8501-1, section 11(a),
                   V.T.C.S., means the sum total of all admission charges to any
                   taxable athletic performance, without any deduction for tax.




                                                    ~MARK      WHITE
                                                     Attorney General of Texas

    JOHN W. FAINTER, JR.
    First Assistant Attorney General

    RICHARD E. GRAY III
    Executive Assistant Attorney General

    Prepared by Robert Lattimore
    Assistant Attorney General




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        Honorable Lias B. “Bubba” Steen - Page Three   (MW-316)




        APPROVED:
        OPINION COMMITTEE

        Susan L. Garrison, Chairman
        Jon Bible
        Rick Gilpin
        Robert Lattimore




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