OFFlCE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
lion.George kl.Sheppard
Comptroller of Public Accounts
Austin, Texas
Dear Sir:
dpinionX0. C-1666
Be: whether 2C$ award tax is due upon
prizes given at Zlks.Lodge party.
In your letter of December 12, 1939, you submit
the following facts:
'B. P. 0. I&, Elks Lodge No. 216, San Antonio,
have.~planneda Christmas party and dance to be
held Deceniher19 which is open to the general
public and at which time they will give prizes
consisting of two automobiles? a frigidaire, a
trip~to Cuba with expenses pad as well as many
other cash and merchandise prizes. The purpose
of the party, ,towhich fan admission is charged,
is to raise money for crippled and underprivileged
children and many other Charitable organizations.
The prizes will be awarded under the following
procedure. Tickets are being sold by means of
a punch board to the general public at prices
ranging from I# to 25#. The ticket entitles the
purchaser to a chance on one or more prizes.
"The purchaser punches one of the holes in
the punch board which may contain any number from
number 1 to number 25. The purchaser is requir-
ed to pay for the ticket in an amount equal to
the nuder he punches from the board. As an
example, if he punches number 1, he is required
to payI{ for the ticket; if he punches number
25, he is required to pay 25~!for the ticket.
*The night of the party the tickets bearing
the purchasers' nams will be placed in a con-
tainer or receptacle from which they will be
Hon. Geo. H. Sheppard, Page 2
Brawn by soms disinterested person, one by
one, until all the prizes have been awarded.
An admission charge is also n&e to the
party but the winner does not have to be
prosent when the prizes are awarded in order
to receive a prize."
In your letter ofDecember 16, 1939, you give us
the additional information that the party is not to be held
in the lodge hall of the Elks Lodge, but will be held upon
the stage of the hiunicipalAuditorium of the city of San
Antonio.
You request our opinion as to whether or not the
prizes to be so awarded will be subject to the 2C$ award
tax levied by Article 7G47f, Vernon's,Civil Statutes, which
reads, in part, as follows:
"(a) Bvery person, firm, or corpora-
tion conducting a theatre, place of amuse-
ment, or any business enterprise in con-
nection 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 Comp-
troller of Public Accounts of the State of Tex-
as? showing the amount of money so given in
prizes, and the value of all @.zes or awards
so given in connection with such business dur-
ing the next preceding month.
'(b') There is hereby levied a tax equal to
twenty per cent (26) of the value of all such money,
prizes, an& awards given in connection with the op-
eration of each and all of the foregoing business
enterprises, an& at the time of -king the report
to the Comptroller of Public Accounts, the owner
or operator 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. Q fi0"
?c&. Gee. H. Sheppard, Page 3
From a reading of the above statute, it is seen
that not every award or prize is taxable thereunder. The
statute does not purport to levy such tax unless the prize
is offered or given in connection with the operation of a
theatre, place of amsement , or some business enterprise.
We have heretofore pointed Out that the mere occasion of
making the award cannot in itself provide the business
enterprise in connection with the operation of which such
prize is given. Tax laws are to be construed striotly.
Yellow Cab Company v. Pengilly, 11 S. W. (26) 660; State
v. San Patricia Canning Company, 17 S. W. (2d) 160.
It is our opinion that these prizes will not be
subject to the tax of Article 7047f, Vernon's Civil Stat-
utes.
Yours very truly
ATTORNEY G:GNmAL OF TEXAS
BY
(Signed) Glenn R. Lewis
Assistant
GRL, pbp
APPROVED- Dec. 23, 1939 APPROVED -- Opinion
(Signed) Gerald C. Mann Oommittee - By BWB,
ATTORNEY GENERAL OF TEXAS Chairman