    OFFtCE   OF THE AtTORNEY        GENERAL    OF TEXAS
                           AUSTIN




Honorable Ceorg4 H. Shqqard
Comptroller of Public Aooounts
Austin, Texas
Deer Sir:




           aJ JOtArletkr                       1959, ~appLaa4nt-
ed b;lyour8 of                                k ii the TituiJCoun-
ty Balr and ml                                 state   for   the   prim
or lwa r U ta x te                            o r no n~8 Anno ta ted




                                 &%bairy Shor is held
                                11, and runs ror s day8
                                QS9 fair wataSapt 16th
                                no. For lQSS, date0
                                h. Uo doubt the bates
                     e @ornowherearound thorn datots.
                     ion fee or 10 wita r0r ohlltlren
                    or adult4 ar4 ahargsd, exoept 01)
                     mhloh is usually on Twmsdap they
                          On Weduesday of the fair,
                oye ana girls are admitted irem, wh%oh
      inoludes 4ZiClub boys and girls and VoOatieaal
      boys.
           "~04, thme is a oarnlval playfug on tha
      grounda, a8 it wouldnt be a fair if you ditln*t
      have that in 44nm4tion, ride8 ror the ohlldren
      and thq youngm orowd and aide showa and oon-
      oeeslone that uruellp go with the oarniral, and
                                                           I.46


Honorable George H. Sheppard,   Fat?* Z



     for that privilege they give the Fair Asen 155
     or the grow3 on show8 and rides.
             "This paet 1939 Fair, the Sohool children
     0r   the County had a programma In wont or the
     grand atand whloh wae~free to all that wished
     to Bee it, this waason Tuerday Night; On wed-
     nesday Might there was a double pub110 wedding
     put on by the 10081 paople of the town, whioh
     warnalso free; On Thumday &ight in front of
     the grand stand war e programma of band 4111414,
     by ZLt.Pleasant High School Emnd and Oilmer
     IiighSohool Band, this was alao free; On Friday
     Bight and on Saturday Eight the two automobiles
     were given away, free. There MII no horae raoer,
     saddle ahow, or danae in oonneotlon with the fair
     where    a eeparato admisrion oharged. The only
     ahargo made to enter the rair ground6 wallthe
     above 10 eta aad 8% 4t8, and you were privilege
     to do a8 you please, 8eo the agrioultrrral   0x0
     hlbita,    wonmn*s exhlbitr, hop  oluba exhibit8
     the cattle exhibits and horserrand mule exhibit&,
     and the above that I have outllnad, without any
     further oharge or expanne.
           *The premlama listed in the Fair Gatalogue
     a&m&ted to $1,640,00 and hl.1taken ior 19S9 iOr
     the various lxhlbitora.    The gate admiselon Too
     and the carnival o6noemrlons ie~where the Sair
     Aoaociation  8eoure8 the money to get the $1,000
     offarad in premium8 and to pay the insurance on
     the bulldlags, to pay for labor and help in put-
     ting a rair on, and to make adtlitionallmprove-
     manta ae are nredod rroffi t&ma to time ror laoh
     annual talr . wo salaries am pai& to any 0rri-
     olsli  so dividends are paid to stockholdera,  but
     any earnings made over end above the expense of
     putting on a fair, if any, gose ba4k into the
     plant In addit%4nal premiums and new improvements
     r0r the nsxt year's tab.
          "The Soye Soout have their hut on the iair
     grounderwhioh they use free of cost; The Axiterloan
     Legion have thair building on the Brais groundr,
     where they have their meetinga.,tree of ooati The
     Rome Demonstration women of the Oounty have their
     building on the ground uee free of oorrtto them;
iionareble04org4 H. Shepgw4,          mite 8


     Th4 Xount~Pl4asant
         _                         - _have th?lr-
                  - -. Ba?eball-Club
     granastana ana axsm4na on tne ram    gxtouaasrmo
     0r oost to th4m, aa th4 gmwa6     are Open t0
     any other public 4nterprlse or organlssitionof
     a public nature. U44tlngs o? a pub110 nature
     are held qul4t 0?ten at thr Fair Park, ?re4.*
          For th4 purpoaee or oomputlng tax liabllitl48,
Artiole 7047r-(a), V4rnon's Annotat4a Civl& Statut48, pro-
vi408 a8 r0110rrst
            *(aI Xver~ wreon. rim.          or oormmtlon


     oi something o? valu4~16 off4rra or glv4n to
     one or m0re patrons o? eaoh th4atr4, plaa4 0r
     amus4mnt, or businree enterprise,  and not ginn
     to nil patron8 therw? palingthe    mm4 oharge
     for any oertaln 64rvio4, 00erPoalty,or mater-
     talnm4nt, shall s&6 a vrriried   monthly lvport
     on th4 twentp?iith   dam of eaoh aontb to the
     Oamptrolletior Publio Aooeaate of the,StaC;eo?
     Texas, shoring th4 amount O? m0n4y 60 giv4n in
     priue, and t&a value of all prlsee or awards
     so   given   in   o6nneotl6n   with   suoh btulnesrs dux-
     ing th4 next       pzuoeding mnth.~
            Art1014 7047?-(b),   Vernoa~e       AmeUteQ    Q&vi1 Btat-
ut46, levies   t&e ?oLlting    tax:
           a(b) Ther4 $6 hereby 14~248 8 tax aQUa te
      twenty per 04nt (80%) of the value o?.&ll luoh
     0on4J, prbes, and awards giv4n In 0onneOtlen
     wlth the operation a? eaoh land all of *he ion-
       oln business en~rprf648,and at the~tlme~
      nor kg the report to tb f%mptroUmr 0r mbllo
   ~gEp
      Ao44unt6, th6 owned-or &eXWiW    of any suah
      business shell pay to the State Tmaeurm    auoh
      tax upon the total amount 0r money,  pr14~88,and
      awards so given during the next prooedhg aonth.
      . . ..”
         st is maniieat that the inol44noe O? this tax
14~7is lid46    to pro24401~awards 0rr4ma er glv4n in
oeoneotlon with thi oppatlon or *a theatre, plaai or am&-
emt, or any bueinese entergrl84= and does nOt r4aoh giving
                                                                  1.48   -




Eonorable George E. Sheppard, PSg4 4


0r prises or award6 under any other 4onditione or in eon-
neotion with any other project8 or eituation8. tiehav4 her4
then no general prize or award tax levied upon the giving
of prize4 or awards, a4 such, but only 4 restriOted tax or
twenty psr cant (i!t$)o? the value o? money pcice6 or awards
given in conneotlon wltt the operation of “‘a theStr4, ~140s
or amuesment, or any business enterprise.* It r0n0w6 then,
tbet ir the Titus County Fair and Dairy show does not tall
within the above claeSlrloation, the twenty per cent (&O$)
price or award tax upon the ~41~4 or the-automobile given
away in oonneotion with auah fair does not aoorue.
      It 1s our conoluslon that the Titus County Fair
end Dairy Show, organized and oouduoted as outlined  in the
r0r0g0ing raotual statement, tuxlcounty rafra as gen4rally
organized and conduoted, oannot be phoed within the statu-
tory olaeeirloation o? *a thoatre, plaoe of amueeaent, or
any bueinese enterprise* without defeating  the fnt4nt and
purpos4  or the Lagielature, gathered troa the entire A4t.
       fn u8i.ngthe term Wthsatrem or Wplaoe of aQAu8ement"the
ImgiSlStur4 or Texas aid not purposa to oreate Snather end
alrrment olaasirlostlon or eubjeots.ror taxatlan, but merely
to single out two type8 or 8peele6 of the all-•mbrSolng
genus or olae8iiloatlon or wbu8in4s6 dlnterprise.* The reason
ror this-aotlon r4fkailyappear6 rhan~we,ex6&Ae. 3h4 legie&tiv4
hlatory   0r this tax measure ana the aJ.leged~erilSsought to
be rsaohed by this admittedly eshorbltan$tat. At and berore
the p486Sg4 'Ofthin statute the *JkUlkRight" +Mil of aWal.6
ing prlr+es to the patron8 0r theatres and,mobn       pioture
hoU8eS was~in ruli ilower, not having yet been, 8trSeken a0*m
by our Supreme Court.    Out 0: abundant Oautlon;‘~~ieot perohm
this method or prize-giving should esoape the onus of this
tax, the Leglelature advleedlp   used the t4rm4 %heatre* and
wpkice 0r simuSsment,*in Saaltl0n to the general 4]aSSifiOS-
tion of "any buaineee 8nterpriee.a, But we aubmlt that if
such ~th4etreW or"plaoe or amueementW fa not aonduoted 44 4
Wbu4ine4e eoterpriee,n prizes given in oonneotlon therewith
are not taxable.
     WO are assletea in reaching thla oonoluelon by a glanas
at other parts 0r this i&t. A reiarence to the caption of
the so-oalled  ormlbua Bill refers to the tax involved here
as a tax on prizes   given in oonneotlon with Ybueine4e enter-
prieea .* Moreover, SubalvlSlon (b) or Artlole 7047?, Vernon18
Annotated civil statutes, leviee 4 tax 0r twenty per oent
                             .-
                                                                                        449   -




    Honorable George I?.Lheppsrd, Page 6


     (SW) or the value or money, prizes and awards aglven ln
     oonneotlon with the operation of saoh and all of the fore-
    'going business enterprlses.w Rers the Legislature, In
     maklna the aotual tar levy. did not reueat the terms
     nthea<re” or “place of a&enientn used-in Subdlvlslon (a)
     of this artiole for reasons hereinabove au&Seated, but
     levied this tax upon prizes given in comectlon with the
     "foregoing buslness enterprises," meaning to lnolude
     "theatres" and "places of emsement."   Therefore, wa say
     that a prize or award given in oonneotlon with the opera-
     tion of a "theatrev or "plsoe of amusement" is not taxable
     unless such “theatre” or *place ot amusement” is a wbuslnesa
     enterprise."
         The Titus County I‘alrand Dairy Show, operated and
    conducted a8 above outlined, 16 manlrestly not a *theatram;
    end me rubmlt, from the faotual statement upon whloh this
    opinion turne, that it is not any kind of a nbuul.neerr
    +arprlse ,* whether “plaoe oi amsementa or other rarlant
    or mbuslnes8 enterpr1ee.v Amusement enou& is there ror
    man and boy - speotaoular~ridea',wonders gathered rrom
    the five oontinents and seven seas, but the institution
    known ae woouutv rair” la darlnltelv not a %laoe of amuae-

    tax.     xte~justlrleatlon and moving purpose is eduaation and
     lnutruotlon   in the products of field; farmand iaOtery.
         St is the opinion or this'departmnt that no tax
I   aoorues to the State of Texas under Artlole VXW,   VernonWe
    Annotated Civil Statutea, against the Titus County Fair and
    Dairy Show by reason of the award or prize given in the form
    ot an automobile, In oonnectlon with such Fair on Septambsr
    m, 1939.
                                                   Yours very truly
                                       ATTORRRY GENERAL OF TEXAS


                                       BY
                                                                            hssietant
     PMN:wC
                       APPRWEDDEC 23; 1939

               ~3kLd


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