Court Opinion

ID: 4144714
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:48:34.105383+00
Date Added: 2024-06-11T14:36:21.479528
License: Public Domain

374

        OFFICE         OF THE ATTORNEY               GENERAL   OF TEXAS
                                            AUSTIN

Hoaorabls       ho.        H.   Gbep9erll
comptroller           of   Public   hooountr
Austin,       T8xar

                                             Opinion   N
                                             Re: Liabi

                                                           9, you raputmt our
                                                            b;otor 00143~7 of Dallas,
                                                             bp Artlole   70471,
                                                           r the following    faots
and olrouwstan                                             attaohsd oorrerpand-

                                        past Nr. Alsrandor,     the
                                      ompany, as an advertl~lag
                                 thim Nr. Dodge program, nhloh
                                                  r puia type of
                                                 LD* payla&J
                         es for thirtq mlauter time over'
                         they to turnish the sfudlo and all
                       iremeats,    he paying the verSou8
                    a stipulated    aa.larJ.   The pm&Tar    ir
       baeed upon abrtaln quemtioaa       whlcrh have beea pm-
       pared or furnished the anaouaaar        prior thereto.
       The asrrlatsnta go thro      h the studio errdimoo .and
       seloot from those deelr"4h g to takr part in the
       program lndividaalrr to eaemr baoh guesti6n.
lion.   Sea. I?. Sheppard, Page IS

              Trim      to the askhe        ot the question the
        value in money of 4UOh question            is announaed    and
        Ii the lndlvI6ual       partioipsnt     gives the oorrsot
        anctwer he recslv44 ths stetsd sum. If his answer
        is inoorrsot      he rsoaives (1.00.         The dlfferenoe
        between    the rtated sum and the $1.00 In the ease
        of an inoorraot      6aswsr    iso,   is adds4 to the value
        of the next suooeedlng question end such additions
        oerrled on until 4 oorrset answer             to one of the
        que4tIone Is given.         The Indlvlduale      making up tho
        studio audl4ao4, from whlah the partlolpants               are
        chosen, pay no edolission aharge or other entry
        charge of any character,          thn atudlo, which In the
        usual courss of events 14' the Junior Ball Rooln
        ol the Adolphus Hotel, being open to the publlo.
        In addition     to the oesh awards oertaln          merehanto
        In this city bavs given to the klsxandsr               Amtor
        Company ~erohandlss,        suoh as ordsrs of 6~~6
        hats an6 ordsre of women*8 hoes, whlah ars aome-
        times, In the case oi certain qusstioas,               added to
        the pr6mIum or value of lndivldual             questions.
              Filth rsspeot to the broedoast held at ths
        State Yelr Grounds on Ootober 17, I ettaoh to this
        letter a aopy of the wrlttsn memorandumof ooatraot
        betwssn Alexander Notor Compan7 and the Etets Fair
        of Texas, whioh di64lo6ss      fn full the agrssm6nt
        between those parties.      The method of handlw          ths
        broadoast in that partioular      lnstanoe,    by rsalloa
        of the size OS the gather&g p&06, together with
        the unusual.ly lar64 aroud whloh was eas~bled,            we6
        altered to soms extsnt.      For the rsason that the
        program Is noosssarlly    lirftsd    In tims, the
        assidaat    announoerta were not sent through the
        sudienoe .to abooao pertlolpant6       from the volunteers,
        but ecob person entering the etadium Wa6 given a
        tIoket with a stub aoataining a number. Th8 stub
        was dstaohed frorz the tloket and plaosd In a
        reeeptaele.    Prior to the opening OS tbe prograB
        some twenty of these stubs wore withdrswn and the
        holder4 oi the oorrsspondlng      tlsket number8 went
        down to ths stege to participate         In anawsrlna the
        first twenty questions in the order their numbers
        wire drawn. After 44oi-i partlolpant        had amwered,
        or failed to answer, a queetlon an additional            stub
lion.Geo. Ii. Sheppard, Page 3

     number wea oallad out and the holder of that
     number beoame number twenty upon the list of the
     then partIoIpanta.   At that broadoaat Alexander
     &otor Company awarded prizes In the following    order;
     seven orders  for hats of a retail value of $6.00
     each; nine ordera of boxes of hose at $3.30 saoh;
     o&ah in the aggregate of $166.00, and onn 4-door
     DeLuxs Dodge sedan of e retail   lI6ted market value
     of 4lO98,SO. At thla partloular     bmadaast only,
     the unauooe44ful partloipanta   who failed to answer
     the queatfon propounded to them did not reoelve
     the.uaual $1.00 fee, but the winners only raoelved
     awards .n
      In regard to the relation    between the State Fair of
l’exaa and the Alexander Motor Company In thla conneotIon,
It la pointed out, eddltioually,     that the Stat4 Fair of
Texas agreed to designate Tuesday, Oatober 19th, as *Alex-
ander Motor Company Day, preasntlng Ir;r. Dodge In Parson”
and to furnish withcut oharga to aaId Notor Cdmpany ths
Cotton ‘Bowl Stadium on the Pair grounda, with proper
illumination    and loud spaekIng equipment; on the other hand,
klexander.Xotor    Company agreed at this time and plaos to
furnish the Wr. Dodge Program- whioh had been regularly
broadcast over KRLD In Dallas, Inoluding In addition to
the usual cash awards and premiums, one 1940 4-doer DeLuxs
Dodge Sedan, all expenaea of this undertaking,      suob as
broadoas&lng time, ad&Itlonal wiring for the speakers;
remote oontrol conncotlons,     and the aompensetlon for the
staff required In the undertaking,     to be borne by the
Alexander Motor Company. With partloular      relevanoy to
the question at Issue hers, we point out tbat It .wg@
apecifloally    understood ana agreed that no admission ohargs
would be made at the Cotton Bowl gate for thIH event.
      Section (b) of Article      90491, Vernouts Annotated Civil
Statutea,   levies a,tax “equal to twenty per cent (ZO$) Of
the value of all suohmonay, prlzss,          and awards given in
conneotion with the’opWation          of each and all of the fore-
going businss4    enterprisea,     etc.”   Seotlon (a) of aald
ArtiolSY ~aesfnea what is meant by the term “foregoing         busl-
mesa enterpr14eaw and $ihe oondltloaa        under whlob the tar will
aoorue, In the following       language:
eon.   Geo. Il. Zhepperd,   x'ege 4

              %vary prraon, iinn, or corporation     conduot-
       izg a theatre, plaoe of amusement, or any buslnesa
       enterprise    iq connection with the operation or
       vi?:ioh a prize in the rorx of money or something
       0r value 16 orfered or given to one or mom patrons
       of mch theetre , place of amaenent, or buslnesa
       enterprise,end not givea to all petrone thereof
       paying the ease charge for any certein service,
       oomodlty,     or ohtnrteinmnt,   shall make a verified
       xonthlg report 03 the twenty-fifth     day of each
       month to the Comptroller or fubllc Account8 or
       the-State   0r Texas, showln~: the mount or tzoney 80
       giver. lo prizes,   ena the Yalue 0r all prizes or
       awards so given in oonnectlon with suoh business
       during the next preceding mnth.w
         Your inquiry is lfmited to the liability    ot Alexander
 l&&or Compsny to this tax levy under the reotuel statemmt
 appearing herein, end you 40 not inquire ee to tbe llabiilty
 of the State Fair or Texea by reason or Its cooperative
 pertlclpetlon     in the awarding or the prize   in question.     Se
 think your question ha8 been thus properly llmlte4,       beaaure,
,011 analysis of the feota,    It appears that the Alexander Motor
 Company Is, apparently end actually,      the donor ot the girt
 in question,     ard tbe State Bair of Texas merely lends its
 taoillties    with the expeotetion  and hope of reaelvlng,    ror
 lteelf,    swollen gate reeelpts by reason or the event.      In
 peeeing, houever, lt my be said that even should your quea-
 tion heve earbreoedthe liability     of the State Fair of Texee
 ror this prize or ewar4 tax, we would be oonatreined to hold
 here, es we 414 In Opinion Xo. 0-1637 to you, that ieira,         as
 generally    operate4 and conduoted, are eduaationel    end beaevo-
 lent enterprises     rather then *bueIness enterprisea~wlthln
 the purview and meaning of thts tax measure.

       On the other hand, Alexander 8:otor Company of Dallas,
Texae, is assuredly a "businem enterpriee",      within the oon-
telepletion of Artlole    7040t, Vernon's Annotate4 Civil Stetutees,
but ia order ror the prize or award tax to eeorue under the
stetutehi:other  oondltlons   must appear. It Is not enough that
a pries in the form of money or eomethfng of value ie given
or awarded in connection with the operation of the Alexander
Rotor Coxpany as a +buslnem enterprise,"      but such pri8e or
award muet be orrereu or given "to one or rare patron8 of such
tbeetre , plaoe of emsement, or bualnesa enterprise,      end not
given to all patrons thereof pagln& the ame oherge for any
                                                                          3%

Bon. Coo. E. Sheppard, Page 6

eertaln service,      ooomo4lty, or entertainment”.    The letter
essential    oon4ltlon to tax lleblllty    is entirely wanting 5.n
the instant 0880.       Persona entering the Cotton Bowl et the
Texas State Fair on October 17, 1939, either as eotual
pertloipents    in a contest of nits,    or es mere obeerverr of
the epeotaole,     pal4 no entrahoe fee or admission oharges,
en4 thererore    oan not, by any refinement of reesonlng,      be
deemed WpetronsW or the Alexander kotor Company “peying the
same charge for any certefn service,       commodity or entertain-
ment” within the language of the above quoted statute.
        Nor is this essential     condition   or requlrement of the
statute for the accrual of a tax on prizes or awards met
by the faot that all persons entering the Cotton Bowl for
partialpatlon      in or observation    of the Wr. Dodge Programw
on October 17, 1939, were required to pay to the State Felr
of Texas e general edmlsslon charge et the gates of said
Fair.     The consideration     ror this nominal admission charge
was the right of the person paying seme to attend en4 ob-
serve the various attreotlone,         show8 end exhfblts which a
great State Fair could orrer, and the program eponeored by
the Alexander b:otor Company wee only one of the many attreo-
tione or exhibits       offered by the State Fair.       Whether the ’
*Mr.    Dodge  Program”    or any or all of the other various
ettraotlons     of the State Fair of Texas was the inoltlng
oauee for the Fair vleitor~depoelting          hlamoney in the turn-
stiles,     can never be determine4 but we submit that the oon-
neotlon betieen thie payment and possible           entranoe Into the
Cotton Bowl ror the program Involved here is too remote to
oonstlttite    the pereona peylng same, QatronfP         of the Alexan-
der rotor Company. tloreover, thle admission charge, or fee
is a oonslderetlon       moving directly    to the State Fair of Texas
en4 not to Alexaqaer Motor Company “for any oertaln eervloe,
00maity or entertainment * wbiob the Alexander Xotor Company
Is offering      to the publlo.
      It 1s eocordlngly   our opinion that the Alexander Motor
Company of Dallas is not liable to the State of Texea for the
tax, under Article    70411, Vernon*s Annotate4 Civil Statutes,
of 20$ on the value of the Dcage Automobile and other prize8
given by se14 Alexander Notor Company on Ooteber     10, 1939,  at
the Cotton Bowl during the State Fair at Texes.
                                      Yotie   very truly
                                 ATTO-XERAL          OP TEXAS
        APPROVED
               JAlp 11,