wHEAimoRN~~ GENERAL 

OF-TEXAS 

Honorable Geo. H. Sheppard 

Comptroller of Public Accounts 

Austin, Texas 

Dear Sir: Opinion No. O-1237 

Re: Whether under given facts situat,ion 

twenty per cent prize tax is due' under 

Article 70&7f, R. C. S. 

We are in receipt of your letter of August 4, 1939, wherein you 

outline three fact situations, as follows: 

1. The owner of a place of business displays a jar of beans 

in his store and people entering such place of business are 

invited to guess at the number of beans in the jar. Anyone 

is eligible to participate in the guessing contest, and the 

one who guesses closest to the number of beans in the jar will 

receive the prize which is given away in connection with the 

contest whether he is or has been a customer of the store or 

not. 

2. The owner of a store has printed duplicate numbered tickets 

and people who enter the store are given one of such tickets. 

He drops one number in a container and retains the other. 

Later a drawing is held and the person holding the number which 

corresponds to that drawn from the container receives the award. No charge is made for the ticket, and anyone entering 

may participate and receive the award whether he is or ever 

has been a customer of the store. A person may not receive 

the award unless he is in the store at the time of the drawing. 

3. The proprietor of a motion picture theatre keeps a ledger 

in which anyone may sign his name without lost to him and regardless of whether he purchases or ever has purchased a 

ticket from the theatre. On each Thursday the drawing takes 

place and the theatre is closed and not in operation and is 

open to all alike, to which drawing there is no admission 

charge. A person may be present at the theatre at the time 

of the drawing and if his name is the one drawn then he will 

receive the prize, or any person whose name has been signed 

may go by the office of the theatre at any time Thursday and 

request that he be represented bats the drawing, in which event 
Honorable Geo. H. Sheppard, page 2 O-1237 

he is listed as being eligible for the prize and in such event 

if his name is drawn, he will receive the prize whether he is 

present or not. If the person whose name is drawn is not present or has not been so listed as being eligible for the prize 

then the drawing is carried over to the next week and so continues until the name of some person present or eligible 

is drawn. 

You request our opinion as to whether the twent 

prize tax levied by Article 7047f, Revised Civi 18 

er cent gift or 

tatutes, is due 

upon the prizes given away under the above three fact situations. 

Said Article 7047f reads, in part as follows: 

"(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 any certain service, 'commodity, or entertainment, 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 

(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 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' 

That part of the statute requiring that the prize be offered or 

given away in connection with the operation of a theatre, place 

of business, or business enterprise is satisfied in each of the 

above cases. However, the giving of the prize in connection with 

the operation of a theatre, place of amusement, or business enterprise alone is not sufficient to mature the tax. If such had been 

the intention of the Legislature more apt words could have been 

used. For the tax to be due the prize must be 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 the commodity or entertainment. As used in this 

statute, we think the word patron is used in the same sense as 

customer. Ne do not believe that mere entrance into the bean 

guessing contest or acceptance or a ticket and dropping one end of 

it into a container and attending the drawing, or registering at 

the theatre and attending the drawing or taking the precaution to 
. . . . ^ 

Honorable Geo. H. Sheppard, page 3 o-1237. 

be listed as being eligible for the prize in the manner provided 

would constitute one a patron or customer of the store ortheatre. 

If the statute had so intended it is .submitted that the same result would have been accomplished by simply levying the tax upon 

the giving of the prize in connection with the op~eration of the 

place of business without mentioning patrons of such business enterprise or theatre. 

In case of doubt tax statutes must beoonstrued moist strongly against 

the government and in favor of the citizen. State v. San Patricia 

Cannin Co.,, 17 S.M. (2d) 160; Yellow Cab Co. v. Pengilly, 11 S.". 

(2d) $0. 

Our answer to your question is that under the facts submittedto 

us the tax in question is not due under any~~of the fact situations 

set out above. In this connection we understand that the prizes 

are offered and given to non-patrons as well as patrons., and that 

no practices are engaged in such as would hamper or embarass the 

non-customer who is participating in the enterprise in an effort 

to receive the gift. 

Yours very truly 

APPROVED AUG. 11, 1939 

GERAFII C. MANN 

ATTORNEY GENERAL OF TEXAS 

GRL:lm:ml 

ATTORNEY GENERAL OF TEXAS 

BY 

Glenn R. Lewis 

Assistant