THE Amro~m~ GENERAL
OF EIKAS
AnTI-IN 11.TEXAS
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August 28, 1956
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Honorable Robert 9. Calved Opinion No. S-214
Comptroller of Public Accounts
Capitol Station Re: Application of State Prize
Austin, Texas and Award Tax under Article
70471, V.C.S., to awards
Dear Mr. Calvert: under certain circumstances.
You request our opinion as to whether a State Prize and
Award Tax accrues on awards given under the following circum-
stances:
"1 . To win the TV set or trip, bring the car You
are driving, regardless of make, to Don
McMilllan, Inc. for an appraisal during this
Want 6 Day Event. Some lucky appraisal ~111
be drawn and will be the winner.
"2 . To win the 1956 FORD, every buyer who purchases
a 1956 FORD CAR OR TRUCK from Don McMllllan, Inc.
during the 6 days may complete the statement
"I bought my 1956 FORD from DON MCMILLIAN, INC.
because . . . in 25,,wordsor.less. .The best
statement judged by an independentboard of
judges will win the 1956 FORD they bought for
the person who writes It."
Article 7047f(a), Vernon's Civil Statutes, provides:
'Every person, firm, or corporation conducting
a theatre, place of amusement, or any buslness enter-
prise in connection with the operation of which a
prize In the form of money or something of value is
offered or given to one or more patrons of such theatre,
place of amusement, or business enterprise, and not
given to all patrons thereof paying the same charge
for any certain service, commodity, or entertainment,
shall make a verified monthly report on the twenty-fifth
day of each month to the Comptroller of Public Accounts
of the State of Texas, showing the amount of money so
given in prizes, and the value of all prizes or awards
so given in connection with such business during the
next preceding month."
Honorable Robert 5. Calvert, page 2 (Opinion No. S-214)
Article 7047f(b) levies a tax of twenty per cent of the
value of such prizes.
Since no "chargd'is required of the participants in the
first above mentioned situation, we do not believe the tax is
applicable to the award mentIoned therein.
However, as to the second above named situation, the re-
quirement of the purchase of an automobile or truck constitu-
tes a charge. The fact of a variance in the purchase prices
of the various types of automobiles and trucks sold would not
of itself remove the transaction from the application of the
statute, as long as such variance has no relation to a chance
for the award. Neither would the requirement of submission
by all contestants of statements of 25 words or less of the
reason for the purchase of the vehicle remove the transaction
from the statute. Therefore the tax Is applicable to the
second named situation.
Prior Attorney General's Opinions In conflict herewith,
including Opinions Numbered 0-378 and O-662, are hereby over-
ruled to the extent of such conflict.
SUMMARY
Article 7047f, V.C.S., does not levy a Prize
and award tax unless a charge is paid by the persons
oarticipating in the chance for the award. A prize
awarded to the purchaser of a car who submits the
reason eelected as best for the purchase of the car
is subject to the tax where all participants are re-
quired to purchase a car and submit a statement of
reason for the purchase.
Yours very truly,
APPROVED: JORRBEN SHEPPRRD
Attorney General
Will D. Davis
Reviewer
J. Arthur Sandlin BY
Reviewer As
L. N. Gray
Special Reviewer
Davis Grant
First AssIstant
John Ben Shepperd
Attorney General