Avalon Amusement Corporation v. United States, 9462.

• Decision Date: 28 January 1948
• Docket Number: No. 9462.,9462.
• Citation: 165 F.2d 653
• Parties: AVALON AMUSEMENT CORPORATION v. UNITED STATES.
• Court: U.S. Court of Appeals — Seventh Circuit

165 F.2d 653 (1948)

AVALON AMUSEMENT CORPORATION v. UNITED STATES.

No. 9462.

Circuit Court of Appeals, Seventh Circuit.

January 28, 1948.

Q. H. Hale, T. H. Skemp and R. E. Nietsch, all of La Crosse, Wis., for appellant.

Theron L. Caudle, Asst. Atty. Gen., Helen R. Carloss, George A. Stinson, John P. Wenchell, II and Hilbert P. Zarky, Assts. to Atty. Gen., and Charles H. Cashin, U. S. Atty., of Madison, Wis., for appellee.

Before SPARKS, KERNER, and MINTON, Circuit Judges.

MINTON, Circuit Judge.

This case presents two questions: whether the plaintiff-appellant's dance hall is a "roof garden, cabaret, or other similar place furnishing a public performance for profit" within the meaning of Section 1700 (e) (1) of the Internal Revenue Code,¹ and secondly, whether the checkroom service for which the plaintiff receives a charge is a service subject to the tax. Only the tax on the checkroom service is involved here. The tax was paid, and the plaintiff sued to recover. The District Court concluded that the plaintiff's dance hall and the checkroom service were within the statute and that the tax was properly assessed and gave judgment accordingly. From this judgment, the plaintiff has appealed.

The plaintiff operates a public dance hall in La Crosse, Wisconsin, for which an admission charge is paid by the public patrons. The plaintiff also charges for the checkroom service. Music is furnished by an orchestra provided by the plaintiff, to which music the patrons dance. No other form of entertainment is provided by the plaintiff. No meals or sandwiches are served. In a room adjacent to and opening off the dance floor the plaintiff operates for the benefit of its dance patrons a bar where beer, soft drinks, and confections are sold. Near the bar, at the end of the dance hall, the plaintiff provides booths, and at another location there are tables and chairs at which the dance patrons may be seated and served refreshments from the bar. When not used as a dance hall, the hall is sometimes rented by the plaintiff to individuals or groups for boxing and wrestling matches and other forms of entertainment.

The statute involved reads as follows:

"Sec. 1700. Tax.

* * * * * *

"(e) Tax on cabarets, roof gardens, etc. — (1) Rate.

"A tax equivalent to 5 per centum of all amounts paid for admission, refreshment, service, or merchandise, at any roof garden, cabaret, or other similar place furnishing a public performance for profit, by or for any patron or guest who is entitled to be present during any portion of such performance. The term `roof garden, cabaret, or other similar place' shall include any room in any hotel, restaurant, hall, or other public place where music and dancing privileges or any other entertainment, except instrumental or mechanical music alone, are afforded the patrons in connection with the serving or selling of food, refreshment, or merchandise. A performance shall be regarded as being furnished for profit for purposes of this section even though the charge made for admission, refreshment, service, or merchandise is not increased by reason of the furnishing of such performance. No tax shall be applicable under subsection (a) (1) on account of an amount paid with respect to which tax is imposed under this subsection."

It seems clear to us that the plaintiff's dance hall comes within the definition of a "roof garden, cabaret, or other similar place" as provided in the statute. The definition, to quote the statute, is as follows:

"The term `roof garden, cabaret, or other similar place' shall include any * * * hall * * * where music and dancing privileges * * * are afforded the patrons in connection with the serving or selling of * * * refreshment * * *."

The plaintiff argues that this definition applies to a situation in which a dancing privilege is a mere incident to the charge for food or refreshments. With this we are unable to agree. We can see no justification for so torturing the plain meaning of the phrase "in connection with" — it does not connote that those things connected are also in the relationship of primary and subsidiary. An establishment charging admission for dancing privileges and where refreshments are sold in connection therewith is a "roof garden, cabaret, or other similar place." The plaintiff's dance hall meets these specifications.

Was the operation of the dance hall under these circumstances "a public performance for profit?" We think that it was. A hall in...