Davis Signs Bill Capping Tax for Fight Promoters

In a measure aimed at bringing more big-name boxing to Los Angeles, Gov. Gray Davis signed a bill Thursday setting a $100,000 limit on the state tax promoters must pay for events.

Assemblyman Gil Cedillo (D-Los Angeles) carried the bill after promoter Bob Arum, who put on the Oscar De La Hoya-Shane Mosley fight in June at Staples Center, faced a $350,000 tax bill.

Arum and others contended that the hefty California tax dissuades promoters from booking big-name boxing matches in California. Instead, they hold most major matches in Las Vegas, where taxes are lower.

Current law says promoters must pay 5% of their gate receipts, with no cap. Initially, Cedillo sought to cap the tax that promoters must pay the state at $50,000. But with his bill facing opposition from several Democrats, the lawmaker agreed to raise the cap to $100,000.

The bill also says that if the tax exceeds $70,000, half the additional amount would be added to the boxers’ pension fund, with the other half going to finance the operations of the California State Athletic Commission, which oversees boxing.

In a statement, Cedillo lauded Davis for signing the measure, and said it “will enable California to compete with other states in attracting and hosting large-scale boxing.”