THE Amro~m~ GENERAL OF EIKAS AnTI-IN 11.

TEXAS dOEINBENSJZICPPEHID dT¶vsRlNEI

“PtNrnRAIAugust 28, 1956 [ ~~~~~;~~k& 1

-tb-A-@@+f%AL HonorableRobert 9. Calved OpinionNo. S-214 Comptroller of PublicAccounts Capitol Station Re: Application of State Prize Austin, Texas and Award Tax underArticle DearMr. Calvert: 70471,V.C.S., to awards under certain circumstances. You request **our** opinion as to whether a State Prize and Award Tax accrues on awards given under the following circumstances: "1

. To win theTV set or trip,bring the car You are driving, regardless of make, to Don McMilllan, Inc. for an appraisal during this Want 6 Day Event. Some lucky appraisal ~111 be drawn and will be the winner. "2

. To win the 1956 FORD, every buyer who purchases a 1956FORD CAR OR TRUCK from Don McMllllan, Inc. during the 6 daysmay complete the statement "Ibought my 1956FORD fromDON MCMILLIAN, INC. because

. . . in 25,,words or.less. .Thebest statement judgedby an independentboard of judgeswill win the 1956FORD they bought for the person who writes It." Article 7047f(a),Vernon's Civil Statutes,provides:

'Everyperson, firm, or corporation conducting a theatre, place of amusement, or any buslness 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, shallmake a verifiedmonthly report on the twenty-fifth day of each month to the Comptroller of PublicAccounts 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 connectionwith such business during the next precedingmonth."HonorableRobert 5. Calvert, page 2 (OpinionNo. S-214)

Article 7047f(b) levies a tax of twentyper cent of the value of such prizes. Since no "chargd'isrequired of the participants in the first above mentioned situation,we do not believe the tax is applicable to the award mentIoned therein. However, as to the secondabove named situation, the requirement of the purchase of an automobile or truck constitutes a charge. The fact of a variance in the purchaseprices of the various types of automobiles and trucks sold would not of itselfremove the transaction from the application of the statute, as long as such variancehas no relation to a chance for the award. Neither would the requirement of submission by all contestants of statementsof 25 words or less of the reason for the purchase of the vehicle remove the transaction from the statute. Therefore the tax Is applicable to the secondnamed situation. PriorAttorney General'sOpinions In conflictherewith, includingOpinionsNumbered 0-378 and O-662, are hereby overruled to the extent of such conflict.

SUMMARY Article 7047f,V.C.S., does not levy a Prize and award tax unless a charge is paid by the persons oarticipating in the chance for the award. A prize awarded to the purchaser of a car who submits the reason eelectedas best for the purchase of the car is subject to the tax where all participantsare required to purchase a car and submita statement of reason for the purchase. Yours very truly, APPROVED: Will D. Davis JORRBEN SHEPPRRD Attorney General Reviewer J. Arthur Sandlin BY Reviewer As L. N. Gray SpecialReviewer Davis Grant First AssIstant John Ben Shepperd Attorney General