374
OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Hoaorabls ho. H. Gbep9erll
comptroller of Public hooountr
Austin, T8xar
Opinion N
Re: Liabi
9, you raputmt our
b;otor 00143~7 of Dallas,
bp Artlole 70471,
r the following faots
and olrouwstan attaohsd oorrerpand-
past Nr. Alsrandor, the
ompany, as an advertl~lag
thim Nr. Dodge program, nhloh
r puia type of
LD* payla&J
es for thirtq mlauter time over'
they to turnish the sfudlo and all
iremeats, he paying the verSou8
a stipulated aa.larJ. The pm&Tar ir
baeed upon abrtaln quemtioaa whlcrh have beea pm-
pared or furnished the anaouaaar prior thereto.
The asrrlatsnta go thro h the studio errdimoo .and
seloot from those deelr"4h g to takr part in the
program lndividaalrr to eaemr baoh guesti6n.
lion. Sea. I?. Sheppard, Page IS
Trim to the askhe ot the question the
value in money of 4UOh question is announaed and
Ii the lndlvI6ual partioipsnt gives the oorrsot
anctwer he recslv44 ths stetsd sum. If his answer
is inoorrsot he rsoaives (1.00. The dlfferenoe
between the rtated sum and the $1.00 In the ease
of an inoorraot 6aswsr iso, is adds4 to the value
of the next suooeedlng question end such additions
oerrled on until 4 oorrset answer to one of the
que4tIone Is given. The Indlvlduale making up tho
studio audl4ao4, from whlah the partlolpants are
chosen, pay no edolission aharge or other entry
charge of any character, thn atudlo, which In the
usual courss of events 14' the Junior Ball Rooln
ol the Adolphus Hotel, being open to the publlo.
In addition to the oesh awards oertaln merehanto
In this city bavs given to the klsxandsr Amtor
Company ~erohandlss, suoh as ordsrs of 6~~6
hats an6 ordsre of women*8 hoes, whlah ars aome-
times, In the case oi certain qusstioas, added to
the pr6mIum or value of lndivldual questions.
Filth rsspeot to the broedoast held at ths
State Yelr Grounds on Ootober 17, I ettaoh to this
letter a aopy of the wrlttsn memorandumof ooatraot
betwssn Alexander Notor Compan7 and the Etets Fair
of Texas, whioh di64lo6ss fn full the agrssm6nt
between those parties. The method of handlw ths
broadoast in that partioular lnstanoe, by rsalloa
of the size OS the gather&g p&06, together with
the unusual.ly lar64 aroud whloh was eas~bled, we6
altered to soms extsnt. For the rsason that the
program Is noosssarlly lirftsd In tims, the
assidaat announoerta were not sent through the
sudienoe .to abooao pertlolpant6 from the volunteers,
but ecob person entering the etadium Wa6 given a
tIoket with a stub aoataining a number. Th8 stub
was dstaohed frorz the tloket and plaosd In a
reeeptaele. Prior to the opening OS tbe prograB
some twenty of these stubs wore withdrswn and the
holder4 oi the oorrsspondlng tlsket number8 went
down to ths stege to participate In anawsrlna the
first twenty questions in the order their numbers
wire drawn. After 44oi-i partlolpant had amwered,
or failed to answer, a queetlon an additional stub
lion.Geo. Ii. Sheppard, Page 3
number wea oallad out and the holder of that
number beoame number twenty upon the list of the
then partIoIpanta. At that broadoaat Alexander
&otor Company awarded prizes In the following order;
seven orders for hats of a retail value of $6.00
each; nine ordera of boxes of hose at $3.30 saoh;
o&ah in the aggregate of $166.00, and onn 4-door
DeLuxs Dodge sedan of e retail lI6ted market value
of 4lO98,SO. At thla partloular bmadaast only,
the unauooe44ful partloipanta who failed to answer
the queatfon propounded to them did not reoelve
the.uaual $1.00 fee, but the winners only raoelved
awards .n
In regard to the relation between the State Fair of
l’exaa and the Alexander Motor Company In thla conneotIon,
It la pointed out, eddltioually, that the Stat4 Fair of
Texas agreed to designate Tuesday, Oatober 19th, as *Alex-
ander Motor Company Day, preasntlng Ir;r. Dodge In Parson”
and to furnish withcut oharga to aaId Notor Cdmpany ths
Cotton ‘Bowl Stadium on the Pair grounda, with proper
illumination and loud spaekIng equipment; on the other hand,
klexander.Xotor Company agreed at this time and plaos to
furnish the Wr. Dodge Program- whioh had been regularly
broadcast over KRLD In Dallas, Inoluding In addition to
the usual cash awards and premiums, one 1940 4-doer DeLuxs
Dodge Sedan, all expenaea of this undertaking, suob as
broadoas&lng time, ad&Itlonal wiring for the speakers;
remote oontrol conncotlons, and the aompensetlon for the
staff required In the undertaking, to be borne by the
Alexander Motor Company. With partloular relevanoy to
the question at Issue hers, we point out tbat It .wg@
apecifloally understood ana agreed that no admission ohargs
would be made at the Cotton Bowl gate for thIH event.
Section (b) of Article 90491, Vernouts Annotated Civil
Statutea, levies a,tax “equal to twenty per cent (ZO$) Of
the value of all suohmonay, prlzss, and awards given in
conneotion with the’opWation of each and all of the fore-
going businss4 enterprisea, etc.” Seotlon (a) of aald
ArtiolSY ~aesfnea what is meant by the term “foregoing busl-
mesa enterpr14eaw and $ihe oondltloaa under whlob the tar will
aoorue, In the following language:
eon. Geo. Il. Zhepperd, x'ege 4
%vary prraon, iinn, or corporation conduot-
izg a theatre, plaoe of amusement, or any buslnesa
enterprise iq connection with the operation or
vi?:ioh a prize in the rorx of money or something
0r value 16 orfered or given to one or mom patrons
of mch theetre , place of amaenent, or buslnesa
enterprise,end not givea to all petrone thereof
paying the ease charge for any certein service,
oomodlty, or ohtnrteinmnt, shall make a verified
xonthlg report 03 the twenty-fifth day of each
month to the Comptroller or fubllc Account8 or
the-State 0r Texas, showln~: the mount or tzoney 80
giver. lo prizes, ena the Yalue 0r all prizes or
awards so given in oonnectlon with suoh business
during the next preceding mnth.w
Your inquiry is lfmited to the liability ot Alexander
l&&or Compsny to this tax levy under the reotuel statemmt
appearing herein, end you 40 not inquire ee to tbe llabiilty
of the State Fair or Texea by reason or Its cooperative
pertlclpetlon in the awarding or the prize in question. Se
think your question ha8 been thus properly llmlte4, beaaure,
,011 analysis of the feota, It appears that the Alexander Motor
Company Is, apparently end actually, the donor ot the girt
in question, ard tbe State Bair of Texas merely lends its
taoillties with the expeotetion and hope of reaelvlng, ror
lteelf, swollen gate reeelpts by reason or the event. In
peeeing, houever, lt my be said that even should your quea-
tion heve earbreoedthe liability of the State Fair of Texee
ror this prize or ewar4 tax, we would be oonatreined to hold
here, es we 414 In Opinion Xo. 0-1637 to you, that ieira, as
generally operate4 and conduoted, are eduaationel end beaevo-
lent enterprises rather then *bueIness enterprisea~wlthln
the purview and meaning of thts tax measure.
On the other hand, Alexander 8:otor Company of Dallas,
Texae, is assuredly a "businem enterpriee", within the oon-
telepletion of Artlole 7040t, Vernon's Annotate4 Civil Stetutees,
but ia order ror the prize or award tax to eeorue under the
stetutehi:other oondltlons must appear. It Is not enough that
a pries in the form of money or eomethfng of value ie given
or awarded in connection with the operation of the Alexander
Rotor Coxpany as a +buslnem enterprise," but such pri8e or
award muet be orrereu or given "to one or rare patron8 of such
tbeetre , plaoe of emsement, or bualnesa enterprise, end not
given to all patrons thereof pagln& the ame oherge for any
3%
Bon. Coo. E. Sheppard, Page 6
eertaln service, ooomo4lty, or entertainment”. The letter
essential oon4ltlon to tax lleblllty is entirely wanting 5.n
the instant 0880. Persona entering the Cotton Bowl et the
Texas State Fair on October 17, 1939, either as eotual
pertloipents in a contest of nits, or es mere obeerverr of
the epeotaole, pal4 no entrahoe fee or admission oharges,
en4 thererore oan not, by any refinement of reesonlng, be
deemed WpetronsW or the Alexander kotor Company “peying the
same charge for any certefn service, commodity or entertain-
ment” within the language of the above quoted statute.
Nor is this essential condition or requlrement of the
statute for the accrual of a tax on prizes or awards met
by the faot that all persons entering the Cotton Bowl for
partialpatlon in or observation of the Wr. Dodge Programw
on October 17, 1939, were required to pay to the State Felr
of Texas e general edmlsslon charge et the gates of said
Fair. The consideration ror this nominal admission charge
was the right of the person paying seme to attend en4 ob-
serve the various attreotlone, show8 end exhfblts which a
great State Fair could orrer, and the program eponeored by
the Alexander b:otor Company wee only one of the many attreo-
tione or exhibits offered by the State Fair. Whether the ’
*Mr. Dodge Program” or any or all of the other various
ettraotlons of the State Fair of Texas was the inoltlng
oauee for the Fair vleitor~depoelting hlamoney in the turn-
stiles, can never be determine4 but we submit that the oon-
neotlon betieen thie payment and possible entranoe Into the
Cotton Bowl ror the program Involved here is too remote to
oonstlttite the pereona peylng same, QatronfP of the Alexan-
der rotor Company. tloreover, thle admission charge, or fee
is a oonslderetlon moving directly to the State Fair of Texas
en4 not to Alexaqaer Motor Company “for any oertaln eervloe,
00maity or entertainment * wbiob the Alexander Xotor Company
Is offering to the publlo.
It 1s eocordlngly our opinion that the Alexander Motor
Company of Dallas is not liable to the State of Texea for the
tax, under Article 70411, Vernon*s Annotate4 Civil Statutes,
of 20$ on the value of the Dcage Automobile and other prize8
given by se14 Alexander Notor Company on Ooteber 10, 1939, at
the Cotton Bowl during the State Fair at Texes.
Yotie very truly
ATTO-XERAL OP TEXAS
APPROVED
JAlp 11,