JIM MAlTOX Attorney General

Supreme Court Building P. 0. Box 12549 Austin, TX. 79711. 2549 51214752501 Telex 9101874.1367 Telecopier 5121475-0286

714 Jackson, Suite 700 Dallas, TX. 75202.4509 21417428944

4824 Alberta Ave., Suite 180 El Paso, TX. 79905.2793 915/5333494

1001 Texas, Suite 700 Houston, TX. 77002.3111 7131223-5886

506 Broadway, Suite 312 Lubbock, TX. 79401.3479 So6(747-5238

4309 N. Tenth. Suite S t&Allen, TX. 7950%1885 512/@2-4547

20 Maln Plaza, Suite 4Ml San Antonio, TX. 79205.2797 5121225-419l

An Equal Opportunity/ Affirmative Action Employer 

## The Attorney General of Texas

December20, 1985 JM-399 OVERRULED H-708

Mr. Jim Lusk OpinionNo. m-399 Executive

Director Texas Amusement

Machine Commission Re: Proration of occupation

tax P. 0. Box 13226,CapitolStation under article 8802, V.T.C.S., Austin,Texas 78"l.l and proration of license and registration

fees under article 8817, V.T.C.S.
Dear Mr. Lusk:
You ask severlrl.

questions

regarding

proratioaof certain fees and taxes to be collect,zd by the Texas Amusement Machine Commission. The commission issues .and collects fees for licenses and registration certificates

for persons who engage in business activitiesinvolving coin-operated

macI.ines. V.T.C.S. art. 8817. The cmisslon also collects the annual occupation tax on coin-operated machines. V.T.C.S.art. 8802.
Your first qucmtiondealswith fees for licenses and registration certificates.Art:lcle 8817 specifies

annual fees for various licenses and sets a $50 registration fee for persons who are exempt from the licensing

requiremnts but who own and exhibit coin-operated machines. V.T.C.S.art. 8817,, 5116, 16A. All licensesissuedunder article 8817 expire on December: 31st of each year. Id. 19. It is implicit in article 8817 that registration certificatesalso expire ou December 31st of each year. Compare art. 8817. §9, and art. 8817, 016A. Consequently,

many :Lnitlal

licensesand registration certificates

are valid for less thm a full year. You ask whetheryou may prorate the fee for an initial Licenseor registration certificate

o* a quarterly basis. We couclud~! that you cannotprorate fees for such licensesand registration

certificates. This officehm issued severalopinionsdealing with prorationof licensefees. Thorn opinions have reacheddifferentconclusions as to the propriety of proration based on the language of the relevant statutes.
In a 1970 op~xlon this office considered whether the Texas State Department of Bealth could prorate licensing fees under article 4477-6,V.T.C.S. AttorneyGeneralOpinionM-580 (1970). That statute providedthat such Iicenses must be renewed each year by January 1st. V.T.C.S. art. 4477-6. 013. The section of the statute that listed

p. 1826Mr. Jim Lusk - Page 2 (JM-3'39)

annual fees for licenses began with the following words: "The following fees shall accospany each application.

. . ." &I& 112. This office concludedthat those words made clear that the department had no authorityto prorate the annual fee for the initiallicense. A 1972 opinion relied on sim:.l.ar language in the Texas Structural Pest Control Act, article 135b-6, V.T.C.S., in concluding that the Structural

Pest ControlBoated could not prorate the initial fee for a licenseunder the act. AttfxmeyGeneralOpinionM-1107 (1972).
In contrast,

AttorneyI:eneral

OpinionH-708 (1975)concludedthat the fee provided for in the :iollowing statute couldbe prorated: The annual felrfor each auctioneer'slicense issued by the cormissloner to a resident of this state is $100. The annual fee for each auctioneer's

licenseissuedby the coamissioner to a nonresident is $300. The commissioner shall issue the license,

upon receipt of payment of all license fees. All licensesexpire annuallyon the last day of December of each year and shall be renewedupon the ,ceceipt of the written requestof the licenseeand ,the required licensefee.
. . . Acts 1975, 64th Leg., ch. 320, 54(a), at 828 (the 1975 version has since been amended by Acts 1977, 65th Leg., ch. 314, at 842). AttorneyGeneralOpinionH-708 distinguished AttorneyGeneralOpinions M-580 and M-1107 because th#r statutesconsidered in those two opinions containedlanguagerequiring an initial application to be accompanied by the specifiedfees, whereas the languagein the statute considered in Attorney General Opinian E-708 set an "annual fee" but did not specifically require that the "annual fee" accompany an initial application. Therefore, tke opinion concluded,the annual fee could be prorated for a licenset'l;lt would not be valid for a full year. The languageused in article 8817 compelsus to follow Attorney GeneralOpinions

M-580 and Id-1107

rather than AttorneyGeneralOpinion H-708, the continuing validity of which we would questionin any case. As we pointed out prev1out;l.y. section 16 of article 8817 specifies annual license fees, and contains the followingprovision regarding applications

for licenses: The application must be accompanied by the annual license f:e in the form of a cashier's check or money order payable to the coamission. (Emphasis

added).
V.T.C.S.art. 8817, 513. Betcause article 8817 sets out annual license fees in one section and 1x1 another section requires that an initial application

for a licensebe accompanied by "the annual license fee," YOU nay not prorate the fee :Eor an initiallicense.

p. 1827Mr. Jim Lusk - Page 3 (JM-399)

Also, article 8817 mntains the following provision regarding registration

fees: The fee for registration of machines affected by this section L:s $50 for the business entity in which the owner's

machinesare exhibited. The fee shallbe paid to the cosmission by cashier's

check or money order.
V.T.C.S. art. 8817, §16A(L,). Here the statute simply sets a fee -- not an "annual" fee - for registration and then requires that "the fee" be paid to the cosneiss:Lon. This languagedoes not permit you to prorate the initialfee for registration.
Your second question is whether you may prorate the occupation tax on coin-operated machines. V.T.C.S. art. 8802. Article 8802 provides: Every ' owner' , save an owner holding an import license and holding coin-operated machines solely for re-sale, who owns, controls, possesses, exhibits,

displa:rtr,

or who permits to be exhibited or displayed lr. this State any 'coin-operated machine' shall pay, and there is hereby levied on each 'coin-operai:ed machine',as definedherein in Article 13.01, except as are exempt herein, an annual occupationtax of $30.00, except that the annual tax on each coin-operated machine that is designed exclusivelyfor showing motion pictures is $1,500.00. 'Ihe tax shall be paid to the commission

by caabier'scheck or money order.
In 1941, this office considered whether the Comptroller of Public Accounts could make a rule permittingthe payment of occupationtaxes on coin-operated

machines on a quarterly basis. Attorney General OpinionO-3009 (1941). This office concludedthat the comptroller had no authorityto do so. The requestor had suggested

that the following statute

would permit such ,a rule: [T]hepayment of the specifictax herein provided for, shall be requiredby the collectorof taxes to be made befor<,

any person, firm, or association of persons shall be allowed to engage in any occupation requ::ring a license under the provisions of this <act, this payment to be made for a period not less_ than three months. (Emphasis added).
Acts 1879, 16th Leg., ch. 134, 08, at 149 (formerly codified as article 7052, V.T.C.S.), :repealed by Acts 1981, 67th Leg;, ch. 389,

p. 1828Mr. Jim Lusk - Page 4 (JM-ZlS19)

639(b),at 1785. (Although the repealer

was part of a recodification that was not intended to mke any substantive change in the law, Acts 1981, 67th Leg., ch. 389, §40, at 1787, the underlined languagedoes not appear in the Tax Code.) In dictum, this office said that the underlinedlanguage meant <hat payment of the occupation tax could be made on a quarterly basi,s in the initial year of payment. See - AttorneyGeneralOpinionO-,3009 (1941). The comptroller

no lmger collects the occupationtax on coiuoperated machines; the Texas Amusement Machine Cowmission does. V.T.C.S. art. 8802. We find nothing comparable to the former article 7052~ in the statutesgoveming the Texas AmusementMachine Commission or in the statutes governing the occupation tax on coin-operated machines that would permit proration of the occupation tax in the initial

year of payment. SUMMARY The Texas Amusement Machine Commission may not prorate the fee for an initial license or registration cer,t:ificate. V.T.C.S. art. 8817. The Texas Amusement Machine Commission may not prorate the occupation tax on coin-operated machines.

V.T.C.S.art. 8802.

Very truly your , 

# J-k

.

JIM MATTOX AttorneyGeneral of Texas
JACKHIGRTOWRR First Assistant

AttorneyGoueral
MARYKRLLKR Executive

Assistant

AttorneyGeneral
ROBRRT GRAY SpecialAssistant

AttorneyGeneral
RICK GILPIN Chairman,

Opinion Committee Prepared

by SarahWoelk Assistant

AttorneyGeneral

p. 1829