OFFlCE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN

lion. George Comptroller Austin, Texas

kl.Sheppard of PublicAccounts

Dear Sir: dpinionX0. C-1666 Be: whether 2C$ award tax is due upon prizesgiven at Zlks.Lodge party.

In your letter ofDecember 12, 1939,you submit the following facts:

'B. P. 0. I&, Elks Lodge No. 216, San Antonio, have.~planned

a Christmasparty and dance to be held Deceniher19which is open to the general public and at which time theywill give prizes consisting of two automobiles?a frigidaire, a trip~to Cuba with expensespad as well as many other cash and merchandiseprizes. The purpose of the party, ,towhich fanadmission is charged, is to raise money for crippled and underprivileged children and many otherCharitable organizations. The prizeswill be awardedunder the following procedure. Tickets arebeing soldby means of a punchboard 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 purchaserpunches one of the holes in the punch board which may contain any number from number 1 to number 25. The purchaser is required to pay for the ticket in an amount equal to the nuder he punches from the board. As an example, if he punchesnumber 1, he is required to payI{ for the ticket; if he punchesnumber 25, he is required to pay 25~!for the ticket.
*The night of the party the ticketsbearing the purchasers'nams will be placed in a container or receptacle from which theywill beHon. Geo. H. Sheppard,Page 2

Brawnby somsdisinterested person, oneby one, until all the prizeshave been awarded. An admission charge is also n&e to the partybut the winner does not have tobe prosentwhen 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 isnot to be held in the lodge hall of the Elks Lodge, but will be held upon the stage of the hiunicipal Auditorium of the city of San Antonio.

You request our opinion as towhether or not the prizes tobe so awardedwill be subject to the 2C$ award tax leviedby Article 7G47f,Vernon's,Civil Statutes,which reads, in part, as follows:

"(a) Bvery person, firm, or corporation conductinga theatre, place of amusement, or any business enterprise in connectionwith 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 monthlyreport on the twenty-fifthday 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 @.zes or awards so given in connectionwith suchbusiness during the next preceding month. '(b') There is hereby levied a tax equal to twenty per cent (26) of the value of all suchmoney, prizes,an& awards given in connectionwith the operation of each and all of the foregoingbusiness enterprises, an& at the time of -king the report to the Comptroller of Public Accounts, the owner or operator of any suchbusiness shall pay to the State Treasurer such tax upon the total amount of money, prizes, and awards so given during the next precedingmonth. 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 connectionwith the operationof a theatre, place of amsement , or somebusiness enterprise. We have heretofore pointed Out that the mere occasion of making the award cannot in itself provide thebusiness enterprise in connectionwith the operation ofwhich such prize is given. Tax laws are tobe construed striotly. Yellow Cab Companyv. Pengilly, 11 S. W. (26) 660; State v. San Patricia Canning Company, 17 S. W. (2d) 160.

It is our opinion that these prizeswill notbe subject to the tax ofArticle 7047f,Vernon's Civil Statutes.

Yours very truly
ATTORNEY G:GNmAL OF TEXAS

BY (Signed) Glenn R. Lewis

Assistant
GRL, pbp
APPROVED- Dec. 23, 1939 (Signed) Gerald C. Mann ATTORNEY GENERAL OF TEXAS APPROVED -- Opinion Oommittee - By BWB, Chairman