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The Attorney General of Texas 

March 26, 1981 

MARK WHITE 

Attorney General 

Honorable Lias B. “Bubba” Steen 

Commissioner 

Texas Department of Labor and 

Standards 

P. 0. Box 12157 

Austin, Texas 78711 

Opinion No. Mg- 316 

Re: Computation of gross receipts 

tax imposed under article 850~1, 

V.T.C.S. 

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 

e veri 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% 

“total gross receipts 

instead of the 3% levied by the statute on the 

” 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 

P. 1007