Case Information
*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
GERALS C. MANN ATTORNEY GENERAL
March 13, 1959
Honorable Geo. H. Sheppard Comptroller of Public Accounts Austin, Texas
Dear Sir:
Opinion No. 0-256
Re: Applisability of 80% tax under-Article 7047f., R.C.6. To chamber of cornered gift pprjest.
You submit to us the following facts
"For some time the entlamb chamber of commerce has sponsored the giving away of money prizes on the down town streets of Fentland on Saturday afternoons. A number of merchants contribute to a weekly fund of 10 each, the total amount to be given away at one time being, as already stated, 10 prize is passed over, subject to another drawing next week. If no one holds the number corresponding to any other stub drawn, then the drawing is proceeded with until a holder responds. This drawing is conducted by the manager of the chamber of commerce."
*2 Horn. Geo. H. Sheppard, March 13, 1939, Page 2
You ask our opinion whether under the above facts the 20% tax provided in Article 7047f, Revised Civil Statutes, is due on such transactions.
Article 7047f (a) and part of (b) reads as follows:
"Every person, firm, or corporation conducting a theatre, place of amusement, or any business enterprise in connection with the operation of which a prize in the form of money or something of value is offered or given to one or more patrons 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 verified monthly report on the twenty-fifth day of each month to the Comptroller of Public Accounts 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 connection with such business during the next preceding 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 enterprises, and at the time of making the report 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, prizes, and awards so given during the next preceding month."
It will be noted that for the tax to be due the prize must be given in connection with the operation of a theatre, place of amusement or business enterprise. Manifestly, the act of giving away the prize cannot constitute its own place of amusement or business enterprise. Hence, it is clear enough that the Chamber of Commerce, being neither the owner nor operator of a place of business, is not liable for the tax. The merchants offer a different problem. The giving away of the tickets does not answer the requirement that the prize itself be given away in connection with the operation of the business enterprise. The merchants pooled their money to provide a gift fund, and in one view of the situation the prizes were given away in connection with the operation of their businesses. However, we do not believe such to be true in the sense contemplated by the statute.
We believe that Article 7047f was intended to levy a heavy tax upon the giving of a prize as the crowning
*3 Ron. Geo. H. Sheppard, March 13, 1939, Page 8 achievement of an advertising goheme intended to multiply the oustomers of the partleuler place conducting the eampeign. That it was not intended to apply to every instanoe of the award of a gift or prize is quite olearly shown by two provisions: (1) only when given away in connection with the operation of a theatre, plase of amusement or business enterprise is the tax due, and (2) only an operator is liable for the tax.
Ehen a merchant simply dolivers the money to a third party to be used not to bring the people into the donor's partieular place of business, but to simply get them to come to town where they are as likely to go into one place of business as another, this is not giving the prize away in omnection with the operation of his store any more than in omneotion with the operation of every place of business in town, whether contributing to the fund or not.
From the opirion of Judge Smith in State v. San Patrisio Canning Go., 17 S. W. (2) 160, we quote as follows: "The rule is that the courts may not extend or give special significanoe or an unnecessary or peculiar or strained construction of such plain terms as those employed in order to oubjeet a partleular commodity to a tax imposed by the government. The rule is, rather, that in the interpretation of statutes imposing taxes their provisions will not be extended by implication beyond the plain import of the language used, nor will their operation be enlarged to apply to subjects not specifically included therein, and 'in case of acuit they are construed most strongly against the government, and in favor of the citizen.' 25 R. C. L. Pp. 1092, 1093; 35 Cyo. P. 1189; 26 Am. &; Eng. Encyo. Law (2d Ed.) 669; Gould v. Gould, 245 U. S. 151, 38 S. Ct. 53, 62 L. Ed. 211; Underwood v. Cohool Dist. (Tex. Civ. App.) 149 S.W. 773."
In this connection also we cite the case of Tallow Cab Go. v. Pengilly, 11 S. W. (2) 560, involving the construction of a tax statute, and wherein Judge Conner refers to "the familiar rule that tax laws are to be oonstrued strictly."
Our opinion is that there is no liability on the part of the merchants.
*4 Hon. Geo, H. Sheppard, March 15, 1939, Paee 4
Whether or not the facts set forth above dis- alone a lottery is immaterial to this inquiry and need not be here determined.
Yours very truly ATTORNEY GEN RAL OF TEXAS
By (Signed) Olenn R. Lewis Assistant
GELIN
APPROVED: (Signed) Gerald G. Wann ATTORNEY GENERAL OF TEXAS