THEA-JXORNEY GENERAL
OF TEXAS
Hon. George H. Sheppard
Comptroller of Public Accounts
Austin, Texas
Dear Sir: Opinion No. O-97
Re: Prizes taxable under Article
7047f, Vernon's Annotated
Civil Statutes of Texas.
Your letter requesting our opinion sets forth the fol-
lowing facts:
"The Houston Chronicle in an ad ap-
pearing In their Sunday, December 4 issue
advertised ti0theatre tickets to the Ma-
jestic Theatre in Houston and a $5.00
merchandise prize to be awarded to the
winners of a contest which they operated
under the name of 'Find-the-Line Contest'.
"The plan of the contest was as fol-
lows: Five or six lines which were select-
ed from the advertisements in Everybody's
Gift Guide were printed In the ad. The
participants in the contest were asked to
find the ad or ads in which each of such
lines appeared. They were instructed to
keep the ads or cut them out, Indicating
which line went in which ad. The twenty
nearest correct and neatest solutions re-
ceived were to be awarded tickets to the
Majestic Theatre and the best answer was
to be awarded the $5.00 merchandise prize.
"I am attaching hereto 8 cop% of the
ad as It appeared in the paper.
You request our opinion as to whether the 20s prize,tax
levied by Article 7047f, Vernon's Annotated Civil Statutes,
is due upon such prizes or awards.
For your convenience we set out below the pertinent
portion of Article 7047f:
Hon. George H. Sheppard - Page 2 o-97
"(a) Every person, firm, or cor-
poration conducting a theatre, place
of amusement, or any business 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 m certain service, commodity, 2 enter-
talnment, 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 bus-
iness during the next preceding month.
"(b) There is hereby levied a tax
equal to twenty per cent (20s) of the value
of all such money, prizes, and awards given
in connection,with the operation of each and all
of the foregoing business enterprises, and at
the time of making the report to the Comp-
troller of Public Accounts, the owner or oper-
ator of any such business shall pay to the
State Treasurer such tax upon the total amount
of money, prizes, and awards so given during the
next preceding month. * * *I'
In the fact situation submitted to us, it is obvious
that certain participants, in their efforts to win the prize
offered, would exert more and better directed effort and
would perform more services than others would. In other
words, the services rendered to the paper in working out the
contest would not be equal on the part of all contestants,
but would be different in each Instance, and the prizes being
given to certain persons who had delivered an extra consid-
eration, the case would fall within the exception contained in
that part of the statute above underlined.
Your question is answered in the negative.
Very truly yours
ATTORNEY GENERAL OF TEXAS
GRL-MR-WC By s/Glenn R. Lewis
Glenn R. Lewis
APPROVED NOV 7, 1939 Assistant
s/Gerald C. Mann
ATTORNEY GENERAL OF TEXAS
Approved Opinion Committee By s/BWB Chairman