374 

OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Hoaorabls ho. 

comptroller of 

Austin, T8xar 

H. Gbep9erll 

Public hooountr 

Opinion N 

Re: Liabi 

9, you raputmt our 

b;otor 00143~7 of Dallas, 

bp Artlole 70471, 

and olrouwstan 

r the following faots 

attaohsd oorrerpandpast 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 pmpared 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 aometimes, 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 memorandum of 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 *Alexander 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 foregoing businss4 enterprisea, etc.” Seotlon (a) of aald 

ArtiolSY ~aesfnea what is meant by the term “foregoing buslmesa 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 conduotizg 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, 

giver. lo prizes, 

showln~: the mount or tzoney 80 

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 queation heve earbreoed the 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 beaevolent 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 oontelepletion 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 entertainment” 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 observe 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 attreotione 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 turnstiles, can never be determine4 but we submit that the oonneotlon 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 Alexander 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,