INCOME TAX

Otago Daily Times, Issue 26770, 13 May 1948, Page 6

INCOME TAX

TWO SPORTS BODIES DECISION OF DEPARTMENT P.A. AUCKLAND, May 12. Two sports bodies, the Auckland Rugby League and the Auckland Boxing Association, have recently been classified as professional sporting bodies by the Land and Income Tax Department. The league has been required to furnish returns of income derived during the financial years of 1947 and 1948 in order that its liability may be determined, and the Boxing Association has received an assessment of about £3BO as tax on its profits in the season ended March 31, 1947.

The departmental attitude was explained in a letter written by Mr N. J. Chapman, superintendent at Auck-

land, to the league. “ I have to advise," Mr Chapman wrote, “ that the liability for taxation of professional sporting bodies has been recently reviewed and it has been decided that such organisations are liable for income tax and social security charge on profits derived from outside the circle of membership.” Mr Chapman declined to discuss the decision to tax the two bodies. He explained that a section of the Land and Income Tax Act, 1923, provided that sports bodies could be held liable for tax where the participants in the sport were in receipt of pecuniary gain. The action of the department has created consternation in the two organisations. Mr D. A. Wilkie, chairman of the Rugby League Board of Control, said his board had made a protest against its classification. The league game was controlled on an amateur basis. He said rule 32 of the Auckland League’s constitution specifically forbade members from receiving pecuniary gain from the property or operations of the league. The sole exception was that members of the league’s representative team were permitted to receive £1 for out-of-pocket and travelling expenses for each game played in Auckland and 10s a day for each day spent on tour. “ I do not know of any instance of the league paying a member or a player except as provided in the rule since I was elected a member of the Control Board in 1933," said Mr Wilkie. “ I am well aware of the board's custom of paying amounts to clubs during a season’s competitions, and I know that these amounts usually vary from about £3OO for a season in tne case of a very successful club to about £6O for the club which finishes last in the championship. I am not officially aware of how the amounts are distributed by the clubs, but if each club paid its players the amount received by each player in a season would demonstrably be insufficient to make him a professional sportsman—that is. one who earns his living at the game.” Mr R. L. Farrell, immediate pasx president of the Boxing Association, said the objects of the association were to encourage and assist in the advancement of scientific boxing, to govern and regulate amateur and professional boxing, and to promote and carry out competitions under the rules of the New Zealand Boxing Association. “ I suggest that- the association is not a professional sporting body for the simple reason that the members do not get anything out of its activities.” Mr Farrell said. “ Professional boxers who receive monetary gain from bouts conducted by the association are already liable in the normal course for income tax and social security charge.”