IN THE SUPREME COURT OF FLORIDA TOP RANK, INC., AMERICA ) PRESENTS, LTD., and ) SHOWTIME NETWORKS INC., ) ) Petitioners, ) vs. ) Case No. SC03-494 ) FLORIDA STATE BOXING ) COMMISSION, et al., ) ) Respondents. ) ______________________________________________________________ ___ RESPONDENTS' ANSWER BRIEF ON JURISDICTION ______________________________________________________________ ___ CHARLES J. CRIST, JR. ATTORNEY GENERAL ERIC J. TAYLOR SENIOR ASSISTANT ATTORNEY GENERAL Fla. Bar No. 337609 LYNN C. HEARN DEPUTY SOLICITOR GENERAL Fla. Bar No. 0123633 Office of the Attorney General PL-01 The Capitol-Tax Section Tallahassee, FL 32399-1050 (850) 414-3300 (850) 488-5865 (FAX) TABLE OF CONTENTS TABLE OF AUTHORITIES ....................................... ii INTRODUCTORY STATEMENT .................................. 1 STATEMENT OF THE CASE AND FACTS ........................... 1 SUMMARY OF THE ARGUMENT ................................. 3 ARGUMENT .................................................. 4 ISSUE I THE COURT SHOULD NOT EXERCISE ITS DISCRETIONARY JURISDICTION TO REVIEW THE DECISION OF THE DISTRICT COURT BECAUSE THE GROSS RECEIPTS TAX AT ISSUE DOES NOT IMPLICATE THE FIRST AMENDMENT ................... 4 ISSUE II THE FIRST DISTRICT PROPERLY AFFIRMED SHOWTIME'S DISMISSAL DUE TO LACK OF STANDING ......................................... 7 CONCLUSION ................................................ 9 CERTIFICATE OF SERVICE ..................................... 10 CERTIFICATE OF COMPLIANCE ................................ 10 i TABLE OF AUTHORITIES CASES Campus Communications v. Department of Revenue, 473 So. 2d 1290 (Fla. 1985) ............................................... 8 Department of Revenue v. Young American Builders, 358 So. 2d 1096 (Fla. 1st DCA 1978) ........................................ 8 Pioneer Oil Co., Inc. v. State Department of Revenue, 401 So. 2d 1319 (Fla. 1981) ............................................... 8 Sarnoff v. Department of Highway Safety and Motor Vehicles, 825 So. 2d 351 (Fla. 2002) ............................................... 8 Top Rank, Inc. v. Florida State Boxing Commission, 837 So. 2d 496 (Fla. 1st DCA 2003) ..................................... 1,4,7 FLORIDA STATUTES Section 548.06 ............................................. passim Section 548.002 ...............................................1,2 RULES Florida Administrative Code R. 61K1-1.042 ............................ 8 Florida Rule of Appellate Procedure 9.030 .............................. 3 ii INTRODUCTORY STATEMENT The Respondent, Florida State Boxing Commission (“Commission”), respectfully states that this Court should decline to exercise its discretionary jurisdiction in this case because the First District Court of Appeal correctly decided the case below. See Top Rank, Inc. v. Florida State Boxing Commission, 837 So. 2d 496 (Fla. 1st DCA 2003). STATEMENT OF THE CASE AND FACTS Section 548.06(1), Fla. Stat. (2000), imposes a gross receipts tax upon “promoters” of boxing matches.1/ The tax is imposed upon various receipts by the promoters, including the receipts received by the promoters on the sale or lease of the promoters’ rights to broadcast fights to a third party. Only those persons defined as “promoters” in Section 548.002(15), Fla. Stat. (2000), are subject to the tax imposed by Section 548.06(1). 1/ The Petitioners’ statement that the Commission imposes and collects a gross receipts tax “on the pay-per-view fees collected from viewers in Florida” for the pay- per-view broadcasts (Petitioners’ Brief at 1) is flatly incorrect. If Petitioners’ statement were correct, the amount of tax collected would increase substantially, because the tax would be collected not only upon fees received by promoters for the sale or lease of broadcasting rights to broadcasters, but also upon fees received by broadcasters for the actual broadcast to cable television viewers. However, the statute does not impose a tax upon the money received from viewers. 1 Petitioner Top Rank, Inc. (“Top Rank”) and America Presents, Ltd. (“America Presents”) are licensed boxing promoters, as defined by Section 548.002(15). Petitioners sell or lease the broadcast rights for their respective professional boxing matches to television and cable companies, such as Petitioner Showtime Networks, Inc. (“Showtime”), and Home Box Office (“HBO”) for monetary consideration. Petitioner Showtime is a broadcaster. Showtime televises boxing matches to the public over its Showtime network. In order to televise such boxing matches, Showtime purchases or leases the right to broadcast the matches from promoters such as Top Rank and America Presents. After it purchases these broadcast rights, Showtime decides if and when it may televise or distribute the actual television feed to the general public. Usually, the telecast is sold on a pay-per-view basis for each boxing match. The Commission sought to collect the 5% gross receipts tax from Top Rank and America Presents pursuant to Section 548.06(1). The promoters refused to pay the tax, and filed suit asserting that the tax violates the First Amendment. Showtime also joined the suit, claiming that it could be assessed the tax by virtue of being deemed a “promoter” under an administrative rule promulgated by the Commission. The trial court entered summary judgment in favor of the Commission, finding that Section 548.06 did not violate the First Amendment. The trial court also 2 dismissed Showtime because it had not been assessed the challenged tax. The First District Court of appeal affirmed, and Petitioners now seek to invoke the discretionary jurisdiction of this Court pursuant to Rule 9.030(a)(2)(i) of the Florida Rules of Appellate Procedure. SUMMARY OF THE ARGUMENT This Court should not accept jurisdiction of this case because the First District's decision is not a departure from any decision of this Court or of the United States Supreme Court. The First Amendment does not prohibit taxation on the monetary receipts received by a presenter or promoter for presenting a professional sporting event. Petitioners mischaracterize the intent and effect of Section 548.06 in an attempt to create a First Amendment “content” issue where none exists. The tax is not on the broadcast - - in fact, no broadcast is necessary. All that is necessary under Section 548.06 is that a boxing match occur and that the promoter of the match sell or lease his broadcast rights. The First District correctly found that sporting events, in and of themselves, are not “speech” entitled to protection of the First Amendment. Because Section 548.06 imposes the tax upon the various receipts received by the promoter, and not upon any broadcast, the Florida tax does not implicate the First Amendment. 3 The First District also was correct in dismissing Showtime for lack of standing. Showtime claimed standing based upon an administrative rule promulgated by the Commission. Where an issue raised by a party is dependent upon an administrative rule, rather than a statute, the party must first exhaust its administrative remedies with the agency that promulgated the rule before proceeding to court. ARGUMENT The tax created by the Legislature in Section 548.06 does not tax speech protected by the First Amendment. As the First District held, this tax merely applies to the receipts of a sales transaction, and does not affect pure or symbolic speech. See Top Rank, 837 So. 2d at 502. I. THE COURT SHOULD NOT EXERCISE ITS DISCRETIONARY JURISDICTION TO REVIEW THE DECISION OF THE DISTRICT COURT BECAUSE THE GROSS RECEIPTS TAX AT ISSUE DOES NOT IMPLICATE THE FIRST AMENDMENT. Petitioners’ First Amendment argument fails because Section 548.06 does not tax the broadcast of a boxing match. Without a tax on the broadcast, there can be no improper taxation based upon content. All the cases cited by the Petitioners on this issue are, in fact, cases where the state attempted to place a tax upon a broadcast or on other speech subject to First Amendment protection. See Petitioners’ Jurisdictional Brief at 6-8. 4 Section 548.06, Fla. Stat. (2000), provides: (1) A promoter holding a match shall, within 72 hours after the match, file with the commission a written report which includes the number of tickets sold, the amount of gross receipts, and any other facts the commission may require. For the purposes of this chapter, total gross receipts include: (a) The gross price charged for the sale or lease of broadcasting, television, and motion picture rights without any deductions for commissions, brokerage fees, distribution fees, advertising, or other expenses or charges; (b) The portion of the receipts from the sale of souvenirs, programs, and other concessions received by the promoter; and (c) The face value of all tickets sold and complimentary tickets issued. (2) The written report shall be accompanied by a tax payment in the amount of 5 percent of the total gross receipts exclusive of any federal taxes, except that the tax payment derived from the gross price charged for the sale or lease of broadcasting, television, and motion picture rights shall not exceed $40,000 for any single event. (Emphasis supplied). In spite of the express language of Section 548.06 imposing the tax on “promoter[s],” Petitioners insist that this section imposes a tax upon television and pay-per-view broadcasts. In making this argument, Petitioners mischaracterize the very nature of Section 548.06 in order to attempt to create a First Amendment issue. 5 Section 548.06(1)(a) is a “gross receipts” tax. A gross receipts