## TIXEATTORNEYGENERAL OF TEXAS

GERALD C. MANN AUBTIN ~~.,TBxAR
-N A-RN- GWE=AL

Honorable Geo. H. Sheppard Comptrollers

of PublicAccounts Austin, Texas
Dear Sir: OpinionNo. 0-1046 Re: Whether ZC$ prize tax provided in Article 7047f,R.C.S., is'dueupon prizegiven away by American Legion under stated facts.
We are in receipt ofyour letter of June 24, 1939, wherein you outline the following facts:

The American LegionRodeo 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 theRodeo, and the Post proposes to make up the deficit in whole or in part by selling to localmerchants couponswhich 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 entertainingevents,and the same may continue for one or more days; and we shallassume 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 enterwhich admission feeswere charged.

Section (a)and the first sentence in Section (b) of Article 70&7f,Revised Civil Statutes,read as follows:,

"Everyperson, firm, or corporation conducting,a theatre, place of amusement, or business enterprise In connectlonwith the operation of which a prize in the form ofmoney 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 aHonorable Geo. H. Sheppard, page 2 O-1046

verifiedmonthly report on the twentyfifthday of eachmonth to the Comptroller of PublicAccounts 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 buslnessduring the next precedingmonth.
"There is hereby levied a tax equal to twenty per cent (20%)of the value of all suchmoney, prizes, and awards given in connectionwith the operation of each and all of the foregoingbusiness enterprizes, and at the time ofmaking the report to the Comptroller of PublicAccounts, the owner or operator of any suchbusiness shall pay to the State Treasurer such tax upon'the total amount ofmoney, prtzes, and awards to given during cedingmonth.

. . .'I the next preYou request our opinion as towhether ornot under the above facts the 20% tax leviedby the above statutewill be due upon the prizes thus gLven away, or to be given away at the PecosRodeo.

If not a business'enterprise, such a rodeo would certainlybe a place of amusement. As we construe the facts submittedto us, the prizes would be given away in connection with the operation of theRodeo. 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 thatdrawingswill be held to determine the personswho wfll receive the prizes. Therewill be many patrons of the Rodeo paying the same admission charge, and the personsreceiving these prizeswill be payingno greater charge for the entertainment than the other patrons. Under the facts submittedto US, and if the further facts are as we have assumed, then the 20s taxwill be due as leviedby the statute.Honorable Geo. K. Sheppard, Page 3 

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Yours very truly
ATTORNEY GENERAL OF TEXAS

By s/GlennR. Lewis Glenn R. Lewis Asslstant
GRL:FG:wc
APPROVED JUL 20, 

### 1939 s/W.F.Moore FIRST ASSISTANT ATTORNEY GENERAL Approved Opinion CommitteeBy s/TDR Chairman