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HonorableEsco Walter DistrictAttorney Abilene, Texas Dear Sir: OpinionNo. O-3101 Re: whether Jones County Observer must pay tax on automobile given as a prize in contest.
In your letter of January 27, 1941, you submit the following facts: Sometime last fall the publisher of the Jones County Observer sponsoreda contestwhich was open to all 1941paid-in-advance subscribers to saidnewspaper andwho lived in Jones County and who were not in arrears for their 1940 subscription. He offered an automobile as a prize to the subscriber qualifying as above who should on or before 'December25, 1940, submit the most nearly correct estimate of the 1940 cotton crop in Jones County. Ginnings up to and includingJanuary 15, 1941were included,but non8 thereafter. You request our opinion as to dphetherthe automobile thus given away is subject to the tax leviedby Article 7047f,Vernon's Civil Statuteswhich reads in part as follows: "(a) Every 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‘ofvalue is offered or given to one ormore patrons of such theatre, place of amusement, or business enterprise, andnot given to all patrons thereofpaying the same charge for any certain seI?vlce,

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. "(b) There is hereby levied a tax equal to twentyper cent (20%) of the value of all suchmoney, prizes, and awards given in connectionwith the operationof each and all of the foregoingbusiness enterprises,and at the time of making the report to the Comptroller of Public Accounts, the owner or operator of any suchHonorable Bsco Walter, Page 2, O-3101

business shall pay to the State Treasurer such tax upon the total amount of money, prizes, and awards so given during the next precedingmonth

. . . .n The prizewas of course given in connectionwith the operation of a business enterpriaa. It was offered tonone other than patrons and was not given to all of them, merely to one. The only question is whether the winner of the prize has paid a "charge"in addition to that paid by other subscribers. It is our opinion that a considerationby way of detriment to the winner isnot alone sufficient to defeat the tax,but that the "charge" contemplatedby the statutemust be something which in itself is of value to the business enterprise. Of what value to the enterprise is the estimate thusmade and which it develops is closer than thatmade by any other subscriber? No special valuehas been pointed out to us and we can think of none. In your opinion request you direct our attention to our opinionsNos. O-662 and O-2171. In the formerwe held that a prize givenby a milling company to one submitting the "best last line for a five line jingle, in connectionwith an. advertising campaigntf would not be subject to the tax. However, the value of such an advertising jingle is apparent. In the latter opinionwe expressed the view that a prize given one who solicitedand produced the greatestnumber of subscriptionsto a paperwas not subjeot to the tax. The value of the services there given by the winner is likewise evident. Hence, we are constrained to answer your question in the affirmative.
Yours very truly ATTORNEY GENERAL OF TEXAS s/ Glenn R. Lewis

GRL:LM/cg APPROVED FEB. 7, 1941 s/ Gerald C. Mann ATTORNEY GENERAL OF TEXAS GlennR. Lewis Assistant

Approved Opinion Committee, By BWB, Chairman