Oklahoma PPV tax declared unconstitutional

May 17, 2012

MMA Payout has learned that the Oklahoma PPV tax has been declared unconstitutional by the state Attorney General of Oklahoma.  The tax has been challenged by the UFC as it threatened litigation prior to a review of the issue by the Oklahoma AG.

In an email correspondence to MMA Payout, a representative from state representative Tom Newell’s office stated that after extensive research and legal analysis of the issue, an attorney on behalf of the Athletic Commission concluded that the law could not be successfully defended.

Representative Newell is sponsoring SB1533, a bill that would grant the Oklahoma Athletic Commission $200,000 to fund combat sports in the state. “SB1533 Oklahoma Athletic Commission PPV law is assigned to a conference committee with language deleting the unconstitutional fee.  We don’t anticipate having any problems,” stated Representative Newell in an email to MMA Payout.  Thus, despite striking down the tax, SB1533 should pick up for the loss of the tax revenue.

Below is the fiscal analysis from the Conference Committee Report from today:

The measure deletes the State Athletic Commission’s Gross Receipts Assessment as it pertains to certain telecasts and pay-per-views.  Prevailing legal opinion is that these assessments are unenforceable therefore; the measure brings current statutes into conformity with the prevailing legal opinion.  The Commission expects to loose (sic) approximately $240,000 annually in revenue as a result of the assessment no longer being collected; however this fiscal impact is not a result of HB 2746, but a result of the legal determination that the assessment is unenforceable.  The measure has no direct fiscal impact on the State Budget or Appropriations

Payout Perspective:

MMA Payout will have more on this news in the coming days.  It may have boiled down to an analysis of the Dormant Commerce Clause as it affected interstate commerce.  According to representative Newell’s office, the tax had been thoroughly examined by the state’s attorneys to determine the constitutionality of the law. The good news is that based on SB1533 it looks like combat sports will continue in Oklahoma.

6 Responses to “Oklahoma PPV tax declared unconstitutional”

  1. BrainSmasher on May 17th, 2012 3:18 PM

    Thats good news imo. However i wish the commission would look at their tax in ticket sales as a way to raise the money without going after state funding (tax payers). A reasonable tax on tickets to MMA events should cover this. But the state funding about isnt huge so its no big deal and i hope it pass’ so OK can continue business as usaul.

  2. The Fight Nerd | Friday Link Party- May 18, 2012 on May 18th, 2012 5:01 AM

    [...] Oklahoma PPV tax declared unconstitutional, read all about it on MMA Payout. [...]

  3. Bruce on May 18th, 2012 9:30 PM

    2 for 2! :)

    By the way “declared” in the title is a bit misleading; a court “declares” a holding, an attorney general issues an advisory opinion. There is no force of law here.

    P.S. Imho there’s some politics afoot here, the state could easily offer numerous grounds to defend the law if they really wanted to. UFC may not even sue.

    Waiting for the NY litigation to wrap. 3 for 3???

  4. Matt C. on May 19th, 2012 5:30 PM

    Thank you for the follow up on this.

  5. Jason Cruz on May 20th, 2012 7:07 PM

    @Bruce – headline use of “declare” merely used as a descriptive verb to fit in headline space not legalease. We didn’t mean to mislead anyone.

    @Matt C – your welcome

    For those wondering, a judge would not rule on the issue here as the AG in this state can give opinions on the constitutionality of a law. As you may recall, the UFC did not sue as it was waiting for an opinion of the law by the AG.

  6. Bruce on May 21st, 2012 6:52 PM

    No worries Jason. We good;)

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