### 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 andall **iremeats,** hepaying the verSou8 a stipulated aa.larJ. The pm&Tar ir baeed upon abrtaln **quemtioaa** whlcrhhave beea pmpared or furnished the **anaouaaar** 

### prior thereto. Theasrrlatsnta go thro hthe studio errdimoo .and "4h seloot from those deelr 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 anctwerhe recslv44 ths stetsd sum. If his **answer** is inoorrsot hersoaives (1.00. Thedlfferenoe **between** the rtated sumand 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 makinguptho studio audl4ao4, from whlah the partlolpants are chosen, pay noedolission 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 an6ordsre of women*8hoes, whlah ars aometimes, In the case oi certain qusstioas, added to the pr6mIumor **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 Compan7andthe Etets Fair of Texas, whioh di64lo6ss fn full the **agrssm6nt** between those parties. Themethod of handlw ths broadoast in that **partioular lnstanoe,**  **by rsalloa**  of the size OSthe 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 announoertawere 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. Th8stub was dstaohed frorz the tloket andplaosd In a reeeptaele. Prior to the opening OS**tbe prograB**  sometwenty of these stubs wore withdrswn andthe holder4 oi the oorrsspondlng tlsket number8went downto ths stege to participate In anawsrlna the first twenty questions in the order their numbers wire drawn. After 44oi-ipartlolpant hadamwered, or failed to answer, a queetlon anadditional stublion. Geo. Ii. Sheppard, Page 3

numberwea oallad out andthe holder ofthat numberbeoamenumbertwenty uponthe list of the then partIoIpanta. At that broadoaat Alexander &otor Companyawarded 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&ahin the aggregate of $166.00, and onn4-door DeLuxsDodge sedan of e retail lI6ted market value of 4lO98,SO. At thla partloular bmadaast only, the unauooe44ful partloipanta whofailed to **answer** the queatfon propounded to themdid not reoelve the.uaual $1.00 fee, but the winners only raoelved awards.n In regard to the relation between the State Fair of l’exaa and **the** Alexander Motor CompanyIn thla conneotIon, It la pointed out, eddltioually, that the Stat4 Fair of Texas agreed to designate Tuesday, Oatober 19th, as *Alexander Motor CompanyDay, preasntlng Ir;r.Dodge **In** Parson” andto furnish withcut oharga to aaId Notor Cdmpanyths Cotton ‘BowlStadium on the Pair grounda, with **proper** illumination and loud spaekIng equipment; on the other hand, klexander.Xotor Companyagreed at this time andplaos to furnish the Wr. DodgeProgram- whioh hadbeen regularly broadcast over KRLDIn Dallas, Inoluding In addition to the usual cash awards andpremiums, one 1940 4-doer DeLuxs Dodge Sedan,all expenaea of this undertaking, suob as broadoas&lng time, ad&Itlonal wiring for the speakers; remote oontrol conncotlons, and the aompensetlon for the staff required In the undertaking, to be borne bythe Alexander Motor Company. With partloular relevanoy to the question at Issue hers, **we** point out tbat It **.wg@** apecifloally understood ana agreed that noadmission ohargs would be madeat the Cotton Bowlgate for thIH event. Section (b)of Article 90491,Vernouts Annotated Civil Statutea, levies a,tax “equal to twenty per cent (ZO$) Of the value of all suohmonay, prlzss, andawards given in conneotion with the’opWation of each and all of the foregoing **businss4** enterprisea, etc.” Seotlon (a) of aald ArtiolSY ~aesfneawhat is meantby the term “foregoing buslmesa enterpr14eaw and$iheoondltloaa 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 anybuslnesa enterprise iq connection with the operation or vi?:iohaprize in the rorx of moneyor something 

## 0rvalue 

## 16orfered or given to one or mom patrons of mch theetre

, place of amaenent, or buslnesa 

### enterprise,endnot givea to all petrone thereof paying the ease charge for any certein service, oomodlty, or ohtnrteinmnt, shall makeaverified xonthlg report 03the twenty-fifth 

### dayof each monthto the Comptroller or fubllc Account8 or the-State 

## 0rTexas, giver. lo prizes, showln~:the mount or tzoney80



### ena

## theYalue 

## 0rall 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 Compsnyto this tax levy under the reotuel statemmt appearing herein, endyou 40not 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 ha8been thus properly llmlte4, beaaure, ,011analysis of the feota, It appears that the Alexander Motor CompanyIs, apparently end actually, the donor ot the girt in question, ard tbe State Bair of Texas merely lends its taoillties with the expeotetion andhope 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, wewould be oonatreined to hold here, es we414 In Opinion Xo. 0-1637 to you, that ieira, as generally operate4 and conduoted, are eduaationel endbeaevolent enterprises rather then *bueIness enterprisea~wlthln the purview andmeaning of thts tax measure. Onthe other hand, Alexander 8:otor Companyof 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 awardtax to eeorue under the stetutehi:other oondltlons must appear. It Is not enoughthat a pries in the form of moneyor 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 awardmuetbe 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”

. Theletter 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 anyrefinement of reesonlng, be deemedWpetronsWor the Alexander kotor Company“peying the samecharge 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. Theconsideration ror this nominal admission charge wasthe right of the person paying semeto attend en4 observe the various attreotlone, show8end exhfblts which a great State Fair 

## couldorrer, andthe program eponeored by the Alexander b:otor Companyweeonly one of the manyattreotione or exhibits offered by the State Fair. Whether the ’ ***Mr. Dodge**  **Program ”**  or anyor 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 wesubmit that the oonneotlon betieen thie paymentandpossible 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 Companyof 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 andother prize8 given by se14 Alexander Notor Companyon **Ooteber 10,**  **1939, at**  the Cotton Bowl during the State Fair at Texes. Yotie very truly ATTO-XERAL OPTEXAS APPROVED

JAlp11,