TIXEATTORNEYGENERAL 

OF TEXAS 

GERALD C. MANN AUBTIN ~~.,TBxAR 

-N 

A-RN- GWE=AL 

Honorable Geo. H. Sheppard 

Comptrollers of Public Accounts 

Austin, Texas 

Dear Sir: Opinion No. 0-1046 

Re: Whether ZC$ prize tax provided in 

Article 7047f, R.C.S., is'due upon 

prize given away by American Legion 

under stated facts. 

We are in receipt of your letter of June 24, 1939, 

wherein you outline the following facts: 

The American Legion Rodeo is an annual event put on 

by the local Post of the American Legion at Pecos, Texas. 

The Rodeo is not operated for a profit, but all entrance-fees 

paid by the contestants are paid back to them in the form of 

prizes. Admissions charged at the gate are used to defray 

the expenses of the Rodeo, such as rental of stock, labor, 

lights, advertlslng, feed, etc. Receipts from the above 

sources have never been sufficient to meet the expenses of 

the Rodeo, and the Post proposes to make up the deficit in 

whole or in part by selling to local merchants coupons which 

they, in turn, will give to their customers, each coupon entitling the customer to a chance on prize or prizes given 

away at the Rodeo. Generally at such rodeos there is a succession of entertaining events, and the same may continue for 

one or more days; and we shall assume such to be true in this 

case. From a statement contained in the facts submitted to 

us, we shall also assume that the prizes will be given away 

at a place to enter which admission fees were charged. 

Section (a) and the first sentence in Section (b) of 

Article 70&7f, Revised Civil Statutes, read as follows:, 

"Every person, firm, or corporation conducting,a theatre, place of amusement, or business 

enterprise In connectlon 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 any certain 

service, commodity, or entertainment, shall make a 
Honorable Geo. H. Sheppard, page 2 O-1046 

verified monthly report on the twentyfifth day of each month to the Comptroller of Public Accounts of the State of 

Texas, showing the amount of money so 

given ln prizes, and the value of all 

prizes or awards so given In connection 

with such buslness during the next preceding month. 

"There is hereby levied a tax equal 

to twenty per cent (20%) of the value of 

all such money, prizes, and awards given 

in connection with the operation of each 

and all of the foregoing business enterprizes, 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, prtzes, 

and awards to given during 

ceding month. . . .'I 

the next preYou request our opinion as to whether or not under 

the above facts the 20% tax levied by the above statute will 

be due upon the prizes thus gLven away, or to be given away 

at the Pecos Rodeo. 

If not a business' enterprise, such a rodeo would certainly be a place of amusement. As we construe the facts 

submitted to us, the prizes would be given away in connection 

with the operation of the Rodeo. We are left to guess as to 

the procedure to be adopted in giving away the prizes, but we 

will engage in another assumption, this time to the effect 

that drawings will be held to determine the persons who wfll 

receive the prizes. There will be many patrons of the Rodeo 

paying the same admission charge, and the persons receiving 

these prizes will be paying no greater charge for the entertainment than the other patrons. Under the facts submitted to 

US, and if the further facts are as we have assumed, then the 

20s tax will be due as levied by the statute. 
Honorable Geo. K. Sheppard, Page 3 o-1046 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By s/Glenn R. Lewis 

Glenn R. Lewis 

Asslstant 

GRL:FG:wc 

APPROVED JUL 20, 1939 

s/W.F. Moore 

FIRST ASSISTANT 

ATTORNEY GENERAL 

Approved Opinion Committee By s/TDR Chairman