Untitled Texas Attorney General Opinion ( 1957 )

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 -: LPL: cs