                              E

                                      OF     TEXAS




    Hon. Robert S. Calv&rt                        Opinion     No,. WW-15
    Comptroller   of Public Accounts
    Capitol Station                               Re:   The conrtruction     applied to
    Austin, Texas                                       Article   7047.3-19, V.C&S.,
                                                        particularly   in regard to
                                                        whether or not b tax is due
                                                        on admissions     charged for
                                                        certain entertainments
                                                        offered to the public by
    Dear     Mr.   Calvert:                             rponpxlag        qrgaalcatlonr.

                   YOUr     Letter requesting our opinion       ruktive      to the captioned
    matter     reads,     in part, as follows:

                   “Article      7047a-19 as amended Ievks a taz on
           admissions         charged to attend various types of cnter-
           tainments.         ~,

                   “Exemption       provisions   of the Act    provide     as
           follows:
                   l&I
                     . . . no tax shall be &vied under this Act
           on any admission        collected for dancea, moving
           pictures,    operas, plays, and muskal         entertainments,
           all the proceeds of which inure exclusivo,ly to the
           benefit of state, religious,        educbtional or charitable
           institutions,   societies,    or organkbtions,     lf no part
           of the net earnings thereof inures to tho benefit
           of any private stockholder         or individual or for any
           type of exhibition or amusement conducted by and for
           which all of the net proceeds inure to the benefit of
           a non-profit     corporation     organized and chartered
           under the laws of the State of Texas, for the purposo
           of encouraging agriculture         by the mainteaaacs of
           public fairs and exhibitions of livestock.          ; .’

                 “This Department has ktorpreted      the above to
           meun - if any of the orgmbations,    entltlod to an
           exomption, sponsor a rhow or lnkrtainment       and pur-
           chase that show or ontertsinment   outright for a fixed
           fee, and all of the procoedr derived from admksions
,          charged inure to tho benefit of that organkstion,    then
           the tax is not due.

                    “If any of the organizations, entitled to an exemp-
           tion,   sponsor a show or entertainment      and contract
Hon. Robert      S. Calve,rt,     page 2 (WW*l5)



     with the show or entertainmtint            on   b   percentage
     basis the kx is due. l

           Article  70478-19,’ Vernon’s   Civil Statutes, imposes  a kx
upon adniissions   charged to *any place, of amusement      which charges
a price & foe for admission,      inclu+g   exhlbitn in theatres, motion
picture theatres, operb   halls. . . bnd including dance ‘halls, night
clubs, skbting rinks aad any bnd ail other pkcee of amusement
not, prohibikd     by’ law..

            Article    7@%7b-19       COnkiM  two seprak    tbX OXemptiOnh
The first   exempts     adlrdssioai      collectedfor dances, moviag pictures,
operas,   plays and musical         enkrtb,iameats, all the procoeds Of which
inure exclusively    to the benefit of state, re
charttable institutions,    soifetks oicbny
                                       oror gml%lil;b$E;F::                Or
exempts admissions       collockd f
amusement condutikd by mad for a non-profit            corporation orgbnised
and chartered under the lawr of Toxbr for ~t?u purpooo             Of uacourog-
ing agriculture   by the maiat~~nco       of ,public IaIrs hod oxbibttloas
of livestock when ail the net procerdr         Inure to the boruflt d such
corporations.     You will aoto thbt the first oxomptkn         prorldos thbt
“all tho proceeds” must iauro to the beaefit ,o( the Stat@, etc.,
w7iiie the rocoad oxomptlon provldoo that “all the Ut proc@ods”
must inure to tho boaoflt of euch non-pr~flf cOrporstloaa.

            You advise         us that there   bra   two mothoda      of payment:

            “1. The rpoaror lag orgxnlsatlon,  lntitlod to
     an oxomptioa purchbror the show outright and rotrlnr
     sll of the proceeds derlvod from   rdmiorlonr    chargod?

           “2. The sponsoring     organisatlon,  latitlod to
     exomption, ~splitr the sdmlrsionr    chargod on a for-
     contago bark with the rhow o r lntortblamont?

           AN to thr flrrt rxomption,     If the show is purcharod
outright mud all the procoodr are rahlaod        by (ho Stab, etc., tha
bdmisrions c h b r g   a or d
                            olxsm~ f-m     the tax,   &fOWUVOr~  if the
Stbk, o k ,,o nly rocotvor    l porcoukgo    of th admtrrlon~ chbrgod,
then all the procordr would not lnurr oxclurlvely        to lte boaoflt
and the exemptton would not bppiy.

            We wtll now discuss the recond lxomptlon portainlng to
the non-profit    corporattonr   organhod     for tha ‘purporo of oncourag-
ing agr iculturo . To be rntltlod to the lxomption, it lr only
necessary    for the sut procrode     to inure to tha beaeflt of ouch non-
profit corporhonr.        Ths net psocoodb of the eatortainment       would
               rocoedr loas the oxpengor incurrod La holding came.
                        thu  performerr    or   exhibltorr of the entertainment,
Hon. Robe.rt S. Calvert,    page 3 (WW-15)



whether paid in advance of the show by a percentage of the ,ad-
missions charged, or otherwise,   would be an expanse to be deducted
from the gross proceeds in arriving   at the net proceeds.     I&all the
net proceeds inure to the benefit of such non-profit  corporition,
the exemption would apply.



            No tax sha’ii be levied under Article         7047a-19,
            V.C.S., on admissions       collected for dances,
            moving pictures, operas, plays and musical
            entertainments     if the entertainment    is purchased
            outright and all the proceeds inure to the
            exclusive   benefit of state, religious,     educational
            or charitable   institutions and if no part of the
            net earnings inure to the benefit of private
            stockholders   or individuals.       However,   if the
            state, etc., only receives      a parcentage of the
            admissions    charged, then all the proceeds would
            not inure exclusively     to its benefit and the
            exemption would not apply.

            No tax shall be levied under said Article        on
            admissions    collected for exhibitions or amuse,-
            ments conducted by non-profit      corporatlonr
            organixed for the purpose of encouraging
            agriculture   whether the exhibition or amusement
            is purchased outright, or the entertainers        or show
            receives    a percentage of the admissions      coileckd
            if the net proceeds     inure to the benefit of such
            non-profit   corporation.    The expense of securing
            the entertainment     is an expense to be considered
            in arriving   at the net proceeds.

                                        Yours     very   truly,

                                        WILL      WILSON
                                       Attorney     General       of Texas




APPROVED:

OPINION    COMMITTEE

H. Grady    Chandler,   Chairman       -:

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