                     TIXEATTORNEYGENERAL
                              OF TEXAS
                             AUBTIN   ~~.,TBxAR
GERALD C. MANN
 -N
A-RN-       GWE=AL




        Honorable Geo. H. Sheppard
        Comptrollersof Public Accounts
        Austin, Texas
        Dear Sir:           Opinion No. 0-1046
                            Re: Whether ZC$ prize tax provided in
                                 Article 7047f, R.C.S., is'due upon
                                 prize given away by American Legion
                                 under stated facts.
               We are in receipt of your letter of June 24, 1939,
        wherein you outline the following facts:
                The American Legion Rodeo is an annual event put on
        by the local Post of the American Legion at Pecos, Texas.
        The Rodeo is not operated for a profit, but all entrance-fees
        paid by the contestants are paid back to them in the form of
        prizes. Admissions charged at the gate are used to defray
        the expenses of the Rodeo, such as rental of stock, labor,
        lights, advertlslng, feed, etc. Receipts from the above
        sources  have never been sufficient to meet the expenses of
        the Rodeo, and the Post proposes to make up the deficit in
        whole or in part by selling to local merchants coupons which
        they, in turn, will give to their customers, each coupon en-
        titling the customer to a chance on prize or prizes given
        away at the Rodeo. Generally at such rodeos there is a suc-
        cession of entertaining events, and the same may continue for
        one or more days; and we shall assume such to be true in this
        case. From a statement contained in the facts submitted to
        us, we shall also assume that the prizes will be given away
        at a place to enter which admission fees were charged.
               Section (a) and the first sentence in Section (b) of
        Article 70&7f, Revised Civil Statutes, read as follows:,
               "Every person, firm, or corporation conduct-
            ing,a theatre, place of amusement, or business
            enterprise In connectlon with the operation of
            which a prize in the form of money or something
            of value is offered or given to one or more pa-
            trons 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
Honorable Geo. H. Sheppard, page 2         O-1046


    verified monthly report on the twenty-
    fifth day of each month to the Comptrol-
    ler of Public Accounts of the State of
    Texas, showing the amount of money so
    given ln prizes, and the value of all
    prizes or awards so given In connection
    with such buslness during the next pre-
    ceding month.
      "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 enter-
   prizes, and at the time of making the re-
   port 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, prtzes,
   and awards to given during the next pre-
   ceding month. . . .'I
       You request our opinion as to whether or not under
the above facts the 20% tax levied by the above statute will
be due upon the prizes thus gLven away, or to be given away
at the Pecos Rodeo.
       If not a business'enterprise, such a rodeo would cer-
tainly be a place of amusement. As we construe the facts
submitted to us, the prizes would be given away in connection
with the operation of the Rodeo. We are left to guess as to
the procedure to be adopted in giving away the prizes, but we
will engage in another assumption, this time to the effect
that drawings will be held to determine the persons who wfll
receive the prizes. There will be many patrons of the Rodeo
paying the same admission charge, and the persons receiving
these prizes will be paying no greater charge for the enter-
tainment than the other patrons. Under the facts submitted to
US, and if the further facts are as we have assumed, then the
20s tax will be due as levied by the statute.
Honorable Geo. K. Sheppard, Page 3        o-1046


                              Yours very truly
                           ATTORNEY GENERAL OF TEXAS

                               By s/Glenn R. Lewis
                                    Glenn R. Lewis
                                    Asslstant

GRL:FG:wc
APPROVED JUL 20, 1939
s/W.F. Moore
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/TDR Chairman
