**OFFICE OF**  **THE ATTORNEY**  **GENERAL OF**  **TEXAS AUSTIN** 

6l.D 0. MANN I”

.. .*“s..L
**Januaxy** Z7, 1939

Hon. OoorgeR. Sheppard Comptrollerof Fublio Aooount8 Austin,Tous
Dear I&. Sheppard:

-. .' \ '.\

in the letter froa the law firpl

t0 JOUr latter, &XW 88 tOiiOWCtt

OS a Vualners Building Campaigna by The Peooa Entuprl~e and ooopuatltig amrohanta in the town OS Peoos. Aa rooltad in the opinion of the **Attorney** General 

### rrferredto, the prlmory purpose of the oampaign wag 

### to stimulate buslnees and to provide employment for a number of foone ladlea. The plan was worked out on **a oommlsalon**  basiswith extra remuneration in the form of an euto-Hon. Ceocpe H. Sheppard,January 27, 1939, Dupe 2

, mobile presented to the young lady in the oampni~n

:$ho made the moat sales. 'The salesladiesemployed in the enterprise sold oouponbooks upon which therewe8 printed the name of one of the oooperatlngmsrobonts. The book4were invnrlous denomlnatlonsand were sold for the full face amounts thereof, the books being aoceptable at full value to themsrohont whose name wes prlnteC thereon. The 41rls oountsr-slcnedthe books and delivered them to the purohoser,made a note on the stub and reported the sele to The Peoos Rnterprlse andmade due aooountlngof ths monies received. Upon report belnp made at deslcnated intervals,The Feoos Enterprise in turn pold to the young ladymaklnp ths ssls a desleneted oommlsslon or themonies oolleotea. Then of the funds so rscelved an amountwas deducted to assist Inpaying the sxpenses of the oampalw, and the balanoe

### renalni~ was paid to the respective oooperatlngmerohants. Then as the oampaien olosed, the girl who had sold the largest amount of ooupon books reoelved an automoblls, in addition to oosh oommlsslons already paid.
*In the a~re.m.nt entered Into betwesenThe Peoos Enterprise and the respeotlvs oooperatlnemsrohanlts It was rsolted that ths elrls engaged in the sale of the ooupon bookswere entered in a Wpopularlty"oontest; however, the award of the automobilewas not baaed on "popularitya* rather it was bared upon the industryof the lndlvldualpartlolpant. Ho votes were oast by any persons. It a prospeotlve oustomer desired to favor a rrlcna'or.ao~ualntanos,he or she mlfht make purehase of a desiwated amount of ooupon books from the young lady in question; however, on aaoh sale the tlrl making the sale had paid fo her a derlnit. oommlsslon, and then, at the end of the oontest, the youn(!lady maklne the largest sales of ooupon books had present~~dto her an automobile In addition to the amount or oommla~lons theretoforepaid to.her in oosh. "During ths entire oontest the young ladles enter- \ ed were oarrled on the payrolls of the oompany (LO

### em-Hon. CaorpeH. Fiheppnrd, JAnuary 27, 1939, Page 3

ployees and due paymentwas made of social seourity tax on eaoh of the young ladles. In other words,The PeooA Enterprise treoted the salesladies as its employeesAnd accounted for soolal security tax, And on the award of the automobile accountedror the value of the same by payment of the properAmount of social security tax on its said value."
Y;e dlreot your attention to Article 7M71 (a). In this portion of the statuteyou will note thetevery puson, firm or corporationoonauctlnga theater,plaoe of amusement, or any bualnsseenterprise In oonneotlonwith the operation of whloh a prize In the form of money or somethingof value 14 offered or flven 

### to on. or more patrons of suoh theater, plaoe or amusementor plaoe of buslnese and not plven to all patrons thereofpaylap the some OhArge forAny woh service, oommodityor entertainmentwill be required to pay 20$ of thevalue of said prlw 

### or Flit as provided in seotion (b) or saidArticle.

Xt Is the opinion ot this Departient, and you are so advised, that under ths faots sutalttedwith your lnqulq, no taxwould be due the State beoause eaoh of the persons selling the ooupon **books** was oarrled on the payrolls of The Peoos Enterprise as an employee and was not a patron aswould bs affeotecl

by the provisionsOS Artlole 70471, Revised Civil Statutes of Texas. The automobile that WAS &iven to the employss sslllng the largest numbsr of ooupon **books,** ln the opinion al this Department,would not be olasssd as a prize bat, on the other hand,would be a bonus and/or sxtra oompeneatlon for suvlces randered **by** the employee.
Yours very truly
ATTORREY cSXKXL OF TKXAS