Evening star., 1937-12-19
j. U..S.APPEALFA|LS
0NFOOTBALLLEW
Decision Denies Government
Admission Tax From
State Institutions.
BY the Associated Press,

i5y tne hSSOclated fress.
NEW ORLEANS, Dec. 1s.-The
United States Fifth Circuit Court of
Appeals held in a far-reaching deci-
sion today that the Federal Govern
ment had no right to collect the 10
per cent admission tax to football
games or other athletic events at uni
versities operated by a State.
The case before the high bar was
appealed by the collector OF internal
revenue for the district of Georgia
from final injunction against col
lection of the tax granted to the
regents of the university system Of
Georgia who control the University
Of Georgia and Georgia Tech.
The majority opinion held that the
regents of the university system of
Georgia formed constituted depart
ment of the State of Georgia and said
the tax on those institutions was con-
demned under the clause which bars
Federal Government from taxing State
government, or vice versa.
Written by Judge SibIey.
The majority opinion, written by
Judge Sibley, affirmed the Judgment
OF the lower court in granting the
injunction. Judge Holmes concur
red in it.
A minority opinion. written by Judge
Hutcheson, dissenting, held that It
would be lack Of uniformity TO ex-
empt State institutions and tax non
State universities whose teams play
each other and engage in post-season
games such as the Rose Bowl, Sugar
Bowl. Cotton Bowl and Orange Bowl.
Bureau Of Internal Revenue officials
IN Washington said the decision prob
ably would be appealed to the United
states Supreme Court, adding s1Is,-
1872 was involved in four pending suits
brought by State universities of
Georgia, Iowa, West Virginia and
Minnesota.
Amateurism Is Issue.
Aside from the question of the Fed
eral Governments taxing a State an
other chief issue was whether foot
oall players put on a show for the
favor OF the public like actors. pro-
fesslonal boxers, o. whether they per-
form as amateurs furtherinR the
cause of education.
The court agreed that college ath-
letlcs was performed as a feature of
education which reached back to the
times of the ancient Greeks. The
opinion of the majority said that al
though there had been abuse through
subsidizing of athletes, the practice
was abating.
Under the law, admissions to events
whose proceeds 60 exclusively to re-
ligious, charitable and educational
causes are exempt from the tax. The
appellate court held that where anv
college hires athletes the admissions
are subject to tax.
Admits Abuses Exist.
ut must be admitted" stated the
majority opinion. that there has ex-
isted in college football a practice
through the use of scholarships or
other things of securing football play
ers rather than students. This abuse
has been due more to enthusiastic
alumni than to college authorities. but
it has in general been corrected. There
can be no such charge made against
the management OF the regents as ex-
hibited in this record. $50
There are also many problems con-
nected with such games that have led
some institutions to reject them as
undesirable. but their value in the
educational program is for the judg-
ment Of the educational authorities.
Where the State government in
cludes them as useful and incidentally
uses them as a source of income it is
not for the Federal tax officers nor
for the judges to overrule their de-
cision.
Under long-established principles
the United States ought not to tax
these admissions, and the statute will
be held not to apply to a State uni
versity.'
The injunction was granted last
January 6 by Federal Judge E. Marvin
Underwood in Georgia District
Court. His order restrained the col
lector Of internal re enue from COL
lecting contested taxes of $4.810 ear
marked in Georgia during the 1884
football season.