Regents of University System of Georgia v. Page, 770.

• Decision Date: 06 January 1937
• Docket Number: No. 770.,770.
• Citation: 18 F. Supp. 62
• Parties: REGENTS OF UNIVERSITY SYSTEM OF GEORGIA v. PAGE, Collector of Internal Revenue.
• Court: U.S. District Court — Northern District of Georgia

18 F. Supp. 62

REGENTS OF UNIVERSITY SYSTEM OF GEORGIA v. PAGE, Collector of Internal Revenue.

No. 770.

District Court, N. D. Georgia.

January 6, 1937.

Marion Smith and M. E. Kilpatrick, both of Atlanta, Ga., for complainant.

M. H. Eustace, Sp. Asst. to Atty. Gen., and M. Neil Andrews, Asst. U. S. Atty., of Atlanta, Ga., for defendant.

UNDERWOOD, District Judge.

The above case came on for hearing upon its merits, and evidence having been introduced, arguments of counsel had, and briefs filed, the court now finds:

Finding of Facts.

1. Complainant is a public corporation and an instrumentality of the State of Georgia, incorporated by an act of the Legislature of Georgia in the year 1931 (Laws 1931, p. 20). The University of Georgia and the School of Technology are branches of complainant, so made by said act, each of which colleges is, and at all times herein mentioned has been, operated under the supervision and control of complainant.

2. Defendant W. E. Page was appointed United States Collector of Internal Revenue for the Collection District of Georgia on June 20, 1933, and ever since that date has been and now is the duly appointed, qualified, and acting Collector of Internal Revenue for said district.

3. During the times alleged in the bill of complaint there was maintained at the University of Georgia, and at said School of Technology, athletic associations, incorporated by law, which were known as University of Georgia Athletic Association and Georgia Tech Athletic Association, respectively, except that the Georgia Tech Athletic Association operated as an unincorporated association prior to March 8, 1934, the date of its incorporation. Both associations have always functioned through a governing body composed of an equal number of faculty members and alumni of the respective colleges. These associations have control of physical education and athletic games at said colleges, including intercollegiate contests in football, to which spectators are admitted upon the payment of admission charges of varying amounts.

4. All health and athletic programs of the said two colleges were, during the year 1934, adopted and supervised by the faculties of said colleges, and approved by each of their presidents, and were, in turn, approved by complainant.

5. The health and athletic programs of the colleges included both intermural and intercollegiate athletics; and approximately 80 per cent. of the male students in each college engaged in some manner in the program of physical education during the year 1934. Approximately 30 per cent. of them engaged in intercollegiate athletics.

6. At both colleges participation in the physical education is required of all students that cannot qualify for R. O. T. C. training.

7. The physical education program also includes the women students, there being thirty courses in physical education for women.

8. The expenses of physical education and athletic programs at each college are supported in large measure from admission charges to athletic contests. In addition, a small student's fee is collected from each student, which is used for such purpose. The entire expenses of physical education and athletic programs in the two colleges are met by said admission charges and students' fees.

9. During and since the year 1934, each ticket of admission to such athletic events at the University of Georgia contained the following notice: "The University of Georgia, being an instrumentality of the government of the State of Georgia, contends that it is not liable for any admission tax. The amount stated as a tax is so stated because the University is required to do so by Treasury regulations pending a decision as to its liability in this respect. This amount is collected by the University as a part of the admission and will be retained as such unless it is finally determined that the University is itself liable for the tax." The same notice appeared on all of the tickets of admission to athletic contests at the School of Technology, except the name "School of Technology" is inserted in lieu of the name "University of Georgia."

10. Neither complainant nor either of said athletic associations, or any other of complainant's branches or instrumentalities, made any returns to defendant of the amounts stated on the admission tickets as a tax, but both associations kept all amounts so collected separate and apart from all other funds and deposited them to their respective accounts; the amount so collected by the University of Georgia Athletic Association, to wit, $895.37, being deposited in the Citizens & Southern National Bank in Athens, Ga.; and the amount collected by Georgia Tech Athletic Association, $3,914.63, being placed in the First National Bank, in Atlanta, Ga.

11. No part of either of these sums has been paid to defendant or to the United States.

12. Upon failure of complainant and its branches and instrumentalities to make returns and pay taxes on said...