On Fri 14.10.2016, the Qld Supreme Court dismissed an appeal by the Appellant football club to payroll tax assessments, to the extent that it included, as wages, amounts paid for the use of images of players and coaches for the Club’s promotion and marketing.
There was a Collective Bargaining Agreement covering, amongst other things, the use of these images and payment for them (which found their way into the Standard Player Contracts and the Additional Services Agreements).
The Supreme Court dismissed the taxpayer’s appeal. It said the use of the players’ image was for purposes related or connected to the players’ actual performance of promotional or marketing activities. The Court arrived at the same conclusion for the coaches.
(Brisbane Bears – Fitzroy Football Club Ltd v Comr of State Revenue  QSC 231, Qld Supreme Court, Bond J, 14 October 2016).
[Austlii report of the Court decision] [LTN 199, 14/10/16]
Extracts from the Supreme Court report
TAXES AND DUTIES – PAYROLL TAX – LIABILITY TO TAXATION – WHAT ARE WAGES – where appellant employs players and coaches
- where players and coaches entered into agreements with the appellant whereby they agreed to provide promotion or marketing services
- where the relevant agreements permitted the use of image rights
- whether payment made by the appellant was payment in respect of the exploitation of an asset or was payment in respect of taxable wages [incidental to promotional or marketing services]
Murdoch v Commissioner of Payroll Tax (Victoria)  HCA 33; (1980) 143 CLR 629, cited
 The Club now appeals against the Commissioner’s decisions, but only to the extent that the decisions assert a liability for payroll tax on payments which the Club has made to various players and coaches (or their associated corporate entities) for the use of image rights. The Club contends that those payments were not payments of taxable wages and, accordingly, were not payments that were liable to payroll tax under the Act.
 Third, subject to one qualification and except where a payment might be said to fall within one of the subparagraphs of the definition, the question whether a payment falls within the definition of “wages” turns on whether it is a payment “paid or payable to an employee as an employee”. The qualification is that, for the first year, the words were of apparently wider ambit, namely “paid or payable … to, or in relation to an employee as an employee, or applied for the employee’s benefit”.
 Fourth, the question whether the payments falling within the definition of “wages” were rendered liable to payroll tax under s 9, turned on whether the payments were –
(a) paid or payable by an employer (as defined); and
(b) paid or payable for or “in respect of” (or, for the last few years, “in relation to”) services performed or rendered.
 As I have observed at ,  and  above, the indicia relevant to the characterisation of the payments made pursuant to Direct and Indirect Services Agreements were all one way. The Direct and Indirect Services Agreements were the means by which it had been agreed that the players could derive payments as a direct result of the provision of promotional or marketing services to the Club or its sponsors. The use of the player’s Image was for purposes related or connected to the player’s actual performance of promotional or marketing activities. In fact it was necessarily integral to that performance. The result was that it was correct for the payments made by the Club under the Direct and Indirect Services Agreements to be characterised as payments made by the Club directly or through the associated entity to the player as an employee and in consideration of promotional and marketing services performed or rendered by that employee. There was no warrant for a conclusion that payments made for the use of image rights were made other than in the course of the provision of such services, or independently from the provision of such services.