Taxability or Non-taxability of an Athletic Meet

May 14, 1959 BIR RULING NO. 258-59 The Regional Director Regional District No. 6 Naga City S i r : With reference to your letter dated February 2, 1959, I have the honor to inform you the following: The taxability or non-taxability of an athletic meet depends on who sponsors or conducts it and to whose benefit the proceeds will inure. Republic Act No. 1284 (Sec. 260-B) exempts from the payment of amusement tax, athletic meets only when conducted by public schools , provided that the net proceeds derived from the admission fees shall accrue to the athletic fund or library fund of the school in the discretion of the school authorities (emphasis supplied). It is a recognized rule of statutory construction that a proviso shall be confined to that which directly precedes it, or to the section to which it has been appended, unless it clearly appears that the legislature intended it to have a wider scope. (Black on Interpretation of Laws, p. 432). A proviso restricts or qualifies the provision immediately preceding it, hence, the word "school" in the above-cited proviso indubitably refers to public schools. It is very obvious that Congress never intended to include within the purview of Republic Act 1284 athletic meets sponsored by the Bureau of Private Schools. In view of the foregoing, the Private Schools Athletic Association (PRISAA) must be made to pay the amusement tax in accordance with the provision of Sec. 260 of the National Internal Revenue Code. LLjur Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue