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 following facts: 

"The Houston Chronicle in an ad appearing In their Sunday, December 4 issue 

advertised ti0 theatre tickets to the Majestic 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 follows: Five or six lines which were selected 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 received 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 corporation conducting a theatre, place 

of amusement, or any business enterprise 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 entertalnment, 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 business 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 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. * * *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 consideration, 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 

APPROVED NOV 7, 1939 

s/Gerald C. Mann 

By s/Glenn R. Lewis 

Glenn R. Lewis 

Assistant 

ATTORNEY GENERAL OF TEXAS 

Approved Opinion Committee By s/BWB Chairman