DocketNumber: Civ. No. 8013
Citation Numbers: 196 F. Supp. 329
Judges: Halbert
Filed Date: 5/3/1961
Status: Precedential
Modified Date: 11/26/2022
Plaintiff has instituted this action seeking a refund of admissions taxes allegedly paid in error. The case has been submitted to this Court for its decision upon a set of stipulated facts.
The Facts
Plaintiff was, at all times pertinent to this action, a California corporation, engaged in the operation of a professional
During the 1957 and 1958 seasons, plaintiff accounted for the money from the tickets as follows:
Upon sale of a ticket, the $30 purchase price was credited to an account called Box Seat Deposits and Advertising. During the seasons, a count was made of the number of adults occupying such seats on ordinary days, or of male adults occupying such seats on Ladies’ Days. For each such seat so occupied, Box Seat Deposits and Advertising was debited 5 cents and Admissions Tax Payable credited 5 cents. The accumulated credits on Admissions Tax Payable were paid to the Government for each quarter.
The Government assessed a deficiency against plaintiff on the basis that of the $30 paid for each ticket, $27.27 was the price of admission and $2.73 was the Federal admissions tax. This resulted in a deficiency and accrued interest of $5,-991.56 by April 9, 1959, when plaintiff paid that sum under protest. Plaintiff filed a timely claim for refund, which was denied. The asserted grounds for the refund claim were that “The basis for collecting these taxes was not predicated upon payment for admission.” No purchaser of a seat has received a refund from plaintiff, or consented to plaintiff’s obtaining a refund.
The Statutory Law
The statutes applicable to the time periods in which this dispute arose read, in pertinent part, as follows:
Title 26 Ü.S.C. § 4231
“There is hereby imposed:
“(1) General. — A tax of 1 cent for each 10 cents or major fraction thereof of the amount paid for admission to any place, including admission by season ticket or subscription. No tax shall be imposed under this paragraph on the amount paid for admission—
“(A) if the amount paid for admission is 90 cents or less, or
“(B) in the case of a season ticket or subscription, if the amount which would be charged to the holder or subscriber for a single admission is 90 cents or less.
“The tax imposed under this paragraph shall be paid by the person paying for such admission.”
Title 26 U.S.C. § 4232
“(a) Admission. — The term ‘admission’ as used in this chapter includes seats and tables, reserved or otherwise, and other similar aceom
Title 26 U.S.C. § 7501
“(a) General rule. — Whenever any person is required to collect or withhold any internal revenue tax from any other person and to pay over such tax to the United States, the amount of tax so collected or withheld shall be held to be a special fund in trust for the United States. The amount of such fund shall be assessed, collected, and paid in the same manner and subject to the same provisions and limitations (including penalties) as are applicable with respect to the taxes from which such fund arose.”
Title 26 Ü.S.C. § 6415
“(a) Allowance of credits or refunds. — Credit or refund of any overpayment of tax imposed by section 4231(1) * * * may be allowed to the person who collected the tax and paid it to the Secretary or his delegate if such person establishes, under such regulations as the Secretary or his delegate may prescribe, that he has repaid the amount of such tax to the person from whom he collected it, or obtains the consent of such person to the allowance of such credit or refund.”
Application of the Law to the Facts
The claim of plaintiff is that Federal admission taxes have been erroneously collected in excessive amounts. These taxes have been paid by the persons who paid for the reserved seats (§ 4231(1), supra; and see the legend on the tickets: “Federal taxes included where applicable”). Since it is clear that no purchaser has received a refund from plaintiff, or has consented to plaintiff’s being allowed a refund, plaintiff may not recover any refund of such allegedly erroneous tax (§ 6415(a), supra).
If plaintiff were the proper person to obtain a refund, the result would, however, be the same, for no less than two reasons. First, the claim for refund is defective for the purpose of stating plaintiff’s major argument. Second, the tax was properly assessed by the Government.
“Admission” includes a reserved seat. These payments were, then, for admission. Plaintiff now contends that they constituted, under certain circumstances, payment for admission of the amount of less than 90 cents. This is still a payment for admission, and therefore such an argument is outside the scope of a claim for refund on the ground that the basis of collection was not payment for admission. Such a contention may not be presented to this Court for the first time (Rogan v. Ferry, 9 Cir., 154 F.2d 974).
The refund claim might suffice to cover plaintiff’s argument that $6 of the cost of a ticket was for advertising.
Assuming arguendo that the refund claim is not legally defective, even then it is clear that plaintiff cannot prevail upon the merits of the case it seeks to establish.
In the instance of a season ticket, a tax is imposed if the amount which would be charged to the holder for a single admission is more than 90 cents (§ 4231 (1)). This amount is not set forth in the stipulations, hence plaintiff has failed to prove its case. According to plaintiff’s memorandum prior to trial, the amount so charged would be 50 cents plus $1.25 for a general admission for an adult, except that ladies on Ladies’ Day paid 50 cents for admission, and children invariably paid 50 cents. Such being the situation, it is evident that the total amount which would be charged to the holder for a single admission (if he or she paid for admission) would invariably be at least $1.
Counsel have made the mistake of spreading the $30 paid for the season ticket over some number (either 60 or 71) of games played, in an effort to figure the prorata cost of a single performance. They have disagreed as to how this should be done. However such a prorata cost is computed, it is irrelevant, since the plain language of § 4231(1) (B), supra, makes no provision for the exemption from tax of a season ticket, even if the amount of the season ticket, spread over the number of games in the season, should result in a charge of less than 90 cents for each game. The exemption from the tax cannot be fixed on the basis of a prorated charge made for the admission for each game. The tax must be collected in every instance where the charge for a single admission, paid as a single transaction, exceeds 90 cents (§ 4231(1) (B), supra).
It is, therefore, ordered that plaintiff take nothing by this suit;
■ It is further ordered that judgment be entered in this suit in favor of defendant;
And it is further ordered that defendant prepare all documents necessary for the complete disposition of this case in accordance with the provisions of this Memorandum and Order, and lodge such documents with the Clerk of this Court pursuant to the applicable rules and statutes.
. Plaintiff sold 1,414 tickets in 1957, and 793% not disclosed by tlie stipulated facts. in 1958. Who bought % of a seat is
. The refund claim contains no factual allegations worthy of the name. At least the condusionary allegations therein do apply to the contention that $6 was for advertising,
. See 26 CFR (1949) § 101.2(g), made applicable to tliis case by TD 6091, 19 Fed-Reg. 5167 (August 17, 1954), paragraphs 1-3.
. See 26 CFR (1949) § 101.4(d), made applicable to this case by TD 6091, supra.