Did Texas's boxing admission tax apply to pay-per-view fees cable subscribers paid to watch fights at home?

Plain-English summary

The Texas Boxing and Wrestling Act put a three percent gross receipts tax on the admission fees people paid to watch a boxing match, whether live in Texas or on a closed-circuit telecast shown here. Section 11(b) also made anyone charging admission to a closed-circuit boxing telecast get a boxing promoter's license and a permit for each telecast. The Texas Department of Licensing and Regulation asked whether that section reached cable television companies that charged subscribers a special pay-per-view fee to watch a live fight at home. If it did, every pay-per-view cable company carrying a live boxing match would have to get a promoter's license, a permit, and pay the tax.

The whole question came down to two words: "admission fee." The Attorney General found no legislative history explaining what the Legislature meant by the term or what problem it was trying to address, so the answer turned on the plain, ordinary meaning of the words. An "admission fee," as people commonly use the phrase, is money you pay to get into a place, an arena, a theater, a concert hall. It is not what you pay to watch a movie, concert, or fight on your own television in your own living room. Reading "admission fee" to cover pay-per-view charges, the opinion said, would not be liberal construction; it would torture the plain language.

The opinion added a historical point: pay-per-view telecasts did not exist in 1977, when the Legislature added section 11(b), so the Legislature likely never had them in mind. The conclusion was that pay-per-view fees were not subject to the three percent gross receipts tax, and cable companies did not need a boxing promoter's license or a per-telecast permit.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Texas Boxing and Wrestling Act formerly at V.T.C.S. article 8501-1 was later repealed and recodified (combative-sports regulation now lives in the Occupations Code), and the taxing and licensing provisions have changed, so confirm the current statutes before relying on this opinion.

Background and statutory framework

The Texas Boxing and Wrestling Act, V.T.C.S. article 8501-1, required the Department of Licensing and Regulation to collect a three percent gross receipts tax on admission fees charged to view a boxing match, contest, or exhibition conducted in Texas or shown on closed-circuit telecast here. Sections 11(a) and (b). Section 11(b) applied specifically to persons charging admission to a live closed-circuit boxing telecast, requiring them to hold a boxing promoter's license, obtain a permit for each telecast shown in Texas, pay the gross receipts tax, and file a verified report within 72 hours of the event. Money from the tax went into the General Revenue Fund. Section 11(c). The request asked whether section 11(b) reached cable companies collecting pay-per-view fees from home subscribers, which reduced to whether such fees were "admission fees."

The opinion noted that the act strictly regulates boxing in Texas. Its predecessor, former article 614-1 of the Texas Penal Code (see S.B. 34, Acts 1973, 63d Leg., ch. 399), was described as having "strictly regulated" boxing, that is, designed to control all aspects of the professional boxing industry. Harvey v. Morgan, 272 S.W.2d 621, 622 (Tex. Civ. App.-Austin 1954, writ ref'd n.r.e.). The current statute continued to do so. V.T.C.S. article 8501-1, section 2.

Statutes are construed to accomplish the legislative intent, Attorney General Opinions M-119 (1967) and M-156 (1967) (citing Independent Life Ins. Co. of Am. v. Work, 124 Tex. 281, 77 S.W.2d 1036 (1934)), and in light of the evil the Legislature sought to avoid, Attorney General Opinion WW-516 (1958) (citing Wortham v. Walker, 133 Tex. 255, 128 S.W.2d 1138 (1939), and Texas & N.O. R.R. Co. v. Railroad Comm'n, 145 Tex. 541, 200 S.W.2d 626 (1947)). But the opinion found no legislative history showing the evil the act was meant to constrain, the Legislature's understanding of "admission fee," or the evil behind taxing admission fees to closed-circuit telecasts. So the term had to be construed on the plain language alone.

When construing a statute, words and phrases are presumed to carry their commonly understood sense. Government Code section 311.011(a). The phrase "admission fee" commonly means a sum paid to enter a place such as a theater, arena, or concert hall, and does not connote money paid to view a movie, concert, or sporting event on one's own television at home. Reading section 11(b)'s "admission fee" to include pay-per-view fees, the opinion concluded, would torture the plain language rather than liberally construe it. The opinion also observed that pay-per-view boxing telecasts were unavailable in 1977, when section 11(b) was added, so the Legislature may not have contemplated them. It therefore concluded pay-per-view fees were not subject to the section 11(b) gross receipts tax, and cable companies needed no promoter's license or per-telecast permit. Because the issue could be resolved on the meaning of "admission fee," the opinion did not decide whether "closed circuit telecast" could include pay-per-view or cable television.

Common questions

Did cable companies owe the Texas boxing tax on pay-per-view fights?
No. The opinion concluded pay-per-view fees were not "admission fees" under section 11(b) of the Boxing and Wrestling Act, so the three percent gross receipts tax did not apply to them.

Why weren't pay-per-view fees treated as admission fees?
Because, in common usage, an "admission fee" is money paid to enter a place like an arena or theater, not money paid to watch an event on your own television at home. The opinion said reading the term to cover pay-per-view would torture the plain language.

Did a cable company need a boxing promoter's license to carry a fight?
No. Since the pay-per-view fees were not admission fees under section 11(b), the opinion concluded cable companies did not need a boxing promoter's license or a permit for each telecast.

Did the opinion decide whether pay-per-view is "closed circuit television"?
No. The opinion resolved the question on the meaning of "admission fee" and expressly declined to decide whether "closed circuit telecast" could be read to include pay-per-view or cable television.

Citations

• V.T.C.S. article 8501-1, §§ 2, 11(a), 11(b), 11(c)
• Former article 614-1, Texas Penal Code; S.B. 34, Acts 1973, 63d Leg., ch. 399
• Government Code § 311.011(a)
• Harvey v. Morgan, 272 S.W.2d 621, 622 (Tex. Civ. App.-Austin 1954, writ ref'd n.r.e.)
• Independent Life Ins. Co. of Am. v. Work, 124 Tex. 281, 77 S.W.2d 1036 (1934)
• Wortham v. Walker, 133 Tex. 255, 128 S.W.2d 1138 (1939)
• Texas & N.O. R.R. Co. v. Railroad Comm'n, 145 Tex. 541, 200 S.W.2d 626 (1947)
• Tex. Att'y Gen. Ops. M-119 (1967), M-156 (1967), WW-516 (1958)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0110
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1992/dm0110.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

April 20, 1992

Mr. Larry E. Kosta
Executive Director
Texas Department of Licensing and Regulation
P. O. Box 12157
Austin, Texas 78711

Opinion No. DM-110

Re: Whether section 11(b) of the Texas Boxing and Wrestling Act, V.T.C.S. article 8501-1, applies to cable television companies collecting pay-per-view fees from subscribers viewing live telecasts of professional boxing performances (RQ-208)

Dear Mr. Kosta:

The Texas Boxing and Wrestling Act (the act), V.T.C.S. article 8501-1, requires the Texas Department of Licensing and Regulation (the department) to collect a three percent gross receipts tax on admission fees charged to view a boxing match, contest, or exhibition conducted in Texas or shown on closed circuit telecasts in Texas. V.T.C.S. art. 8501-1, § 11(a), (b). Section 11(b), which applies specifically to persons charging admission fees for exhibiting a live telecast of a boxing match on closed circuit television, also requires such persons to acquire a boxing promoter's license and to obtain a permit for each closed circuit telecast shown in Texas. Section 11(b) of the act states:

Any person who charges an admission fee for exhibiting a simultaneous telecast of any live, spontaneous, or current boxing match, contest, or exhibition on a closed circuit telecast must possess a boxing promoter's license issued pursuant to this Act and must obtain a permit for each closed circuit telecast shown in Texas. The [three percent] gross receipts tax . . . is applicable to said telecast, and the boxing promoter shall furnish to the department within 72 hours after the event a duly 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. A cashier's check or money order made payable to the State of Texas in the amount of the tax due shall be attached to the verified report.

The state deposits the money it receives as a result of the gross receipts tax into the General Revenue Fund. V.T.C.S. art. 8501-1, § 11(c). You request our opinion as to whether section 11(b) applies to cable television companies that collect from their subscribers special pay-per-view fees, entitling each paying subscriber to watch a simultaneous telecast of live boxing matches. If section 11(b) does apply to pay-per-view cable television companies, each pay-per-view cable television company offering simultaneous telecasts of live boxing matches must acquire a promoter's license, obtain a permit, and pay the three percent gross receipts tax. The ultimate issue is whether "admission fee," as section 11(b) of the act uses that term, includes the special pay-per-view fees cable television subscribers pay to cable television companies for the privilege of viewing simultaneous telecasts of live boxing matches.[1]

Former article 614-1 of the Texas Penal Code was the predecessor statute to article 8501-1, V.T.C.S. See S.B. 34, Acts 1973, 63d Leg., ch. 399, § 5, at 995, 996b. The Texas Court of Civil Appeals, in a case involving former article 614-1, stated that the article "strictly regulated" boxing activity, that is, the article was designed to control all aspects of the professional boxing industry in Texas. Harvey v. Morgan, 272 S.W.2d 621, 622 (Tex. Civ. App.-Austin 1954, writ ref'd n.r.e.). While the legislature has amended former article 614-1 of the Penal Code and its successor, article 8501-1, V.T.C.S., since the Court of Civil Appeals decided Harvey, the current statute continues to strictly regulate boxing in the State of Texas. See V.T.C.S. art. 8501-1, § 2.

Principles of statutory construction require us to construe statutes in such a manner as to accomplish the legislative intent. Attorney General Opinions M-119 (1967) at 2 (quoting 53 TEX. JUR. 2d Statutes § 134, at 195-6 (1964)); M-156 (1967) at 1-2 (citing Independent Life Ins. Co. of Am. v. Work, 124 Tex. 281, 77 S.W.2d 1036 (1934)). We must continually bear in mind, however, that statutes should be construed in light of the evil the legislature sought to avoid by enacting the statute. Attorney General Opinion WW-516 (1958) at 3 (citing Wortham v. Walker, 133 Tex. 255, 128 S.W.2d 1138 (1939); Texas & N.O. R.R. Co. v. Railroad Comm'n, 145 Tex. 541, 200 S.W.2d 626 (1947); 34 TEX. DIGEST Statutes § 184); see also Attorney General Opinion M-119 at 3. Here, while the act's statement of purpose indicates a legislative intent strictly to regulate the boxing and wrestling industry in this state, we have found no legislative history indicating the evil the legislature designed article 8501-1 or its predecessor to constrain. Furthermore, we have found no legislative history indicating either the legislature's understanding of the term "admission fee," as it used the term in section 11(b) of the act, or the evil the legislature seeks to avoid by taxing admission fees to closed circuit telecasts. Thus, we must construe "admission fee" solely on the basis of the plain language of the statute.

When construing a statute, we presume that the legislature used words and phrases in the sense in which they are commonly understood. See Gov't Code § 311.011(a); 67 TEX. JUR. 3d Statutes § 132, at 737 (1989). The phrase "admission fee" is commonly understood to connote a sum of money one pays to enter a place, such as a theater, an arena, or a concert hall. See WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY 57 (1987) (defining "admission"). In common usage, "admission fee" does not connote a sum of money one pays to view a movie, concert, or sporting event on one's own television, sitting in one's own home. In our opinion, to construe "admission fee" as it is used in section 11(b) of the act to include pay-per-view fees goes beyond liberally construing the statute; rather, it tortures the plain language of the subsection to construe the term in this way.

Accordingly, as far as we can ascertain the legislature's intent, the legislature enacted section 11(b) to impose a tax only on fees people paid to enter into a place for the purpose of viewing a simultaneous closed circuit telecast of a live boxing performance. We note that pay-per-view telecasts of live boxing matches were unavailable in 1977, when the legislature added section 11(b) to the act to impose a gross receipts tax on admission fees paid to view closed circuit telecasts of live boxing matches. Thus, at the time the legislature added section 11(b), it may not have contemplated that pay-per-view telecasts one day would be available. Consequently, we conclude that pay-per-view fees are not subject to the three percent gross receipts tax on admission fees imposed by section 11(b) of the act, and cable television companies need not acquire a boxing promoter's license and obtain a permit for each telecast of a live boxing performance.

SUMMARY

Cable television companies collecting a special pay-per-view fee from subscribers who wish to view a simultaneous telecast of a live boxing performance are not subject to V.T.C.S. article 8501-1, section 11(b).

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Kymberly Oltrogge
Assistant Attorney General

[1] We found conflicting authorities on whether the term "closed circuit telecast," as it is used in section 11(b) of the act, can be construed to include "cable television" as the consuming public understands the term "cable television." Compare E. Foster, UNDERSTANDING BROADCASTING 38, 455-456 (1979) (defining and discussing closed circuit television and cable television) and WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY 193, 200 (1987) (defining "cable," "cable television," and "closed circuit") with Inquiry into the Carriage of Sports Events, 34 F.C.C.2d 271, 280 para. 36 (1972) (distinguishing closed circuit television from subscription cable television for purposes of the anti-siphoning rule). As we can decide the issue you present on the basis of the meaning of the term "admission fee," we do not discuss whether "closed circuit telecast" can be construed to include pay-per-view telecasts.