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 

December 20, 1985 

JM-399 OVERRULED H-708 

Mr. Jim Lusk Opinion No. m-399 

Executive Director 

Texas Amusement Machine Commission Re: Proration of occupation tax 

P. 0. Box 13226, Capitol Station 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 proratioa of 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 activities involving 

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 qucmtion deals with 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 licenses issued under 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 licenses and registration certificates are 

valid for less thm a full year. You ask whether you may prorate the 

fee for an initial License or registration certificate o* a quarterly 

basis. We couclud~! that you cannot prorate fees for such licenses and 

registration certificates. 

This office hm issued several opinions dealing with proration of 

license fees. Thorn opinions have reached different conclusions 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. Attorney General Opinion M-580 (1970). That statute 

provided that 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. 1826 
Mr. 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 concluded that those words made clear that the department 

had no authority to prorate the annual fee for the initial license. 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 Control Boated could not prorate the initial fee for a 

license under the act. Attfxmey General Opinion M-1107 (1972). 

In contrast, Attorney I:eneral Opinion H-708 (1975) concluded that 

the fee provided for in the :iollowing statute could be prorated: 

The annual felr for each auctioneer's license 

issued by the cormissloner to a resident of this 

state is $100. The annual fee for each 

auctioneer's license issued by the coamissioner to 

a nonresident is $300. The commissioner shall 

issue the license, upon receipt of payment of all 

license fees. All licenses expire annually on the 

last day of December of each year and shall be 

renewed upon the ,ceceipt of the written request of 

the licensee and ,the required license fee. . . . 

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). 

Attorney General Opinion H-708 distinguished Attorney General Opinions 

M-580 and M-1107 because th#r statutes considered in those two opinions 

contained language requiring an initial application to be accompanied 

by the specified fees, whereas the language in 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 license t'l;lt would not be valid for a full year. 

The language used in article 8817 compels us to follow Attorney 

General Opinions M-580 and Id-1107 rather than Attorney General Opinion 

H-708, the continuing validity of which we would question in any case. 

As we pointed out prev1out;l.y. section 16 of article 8817 specifies 

annual license fees, and contains the following provision 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 license be accompanied by "the annual license fee," 

YOU nay not prorate the fee :Eor an initial license. 

p. 1827 
Mr. 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 machines are exhibited. The fee 

shall be 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 language does not permit you to 

prorate the initial fee 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, orwho 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 defined herein in 

Article 13.01, except as are exempt herein, an 

annual occupation tax of $30.00, except that the 

annual tax on each coin-operated machine that is 

designed exclusively for showing motion pictures 

is $1,500.00. 'Ihe tax shall be paid to the 

commission by caabier's check or money order. 

In 1941, this office considered whether the Comptroller of Public 

Accounts could make a rule permitting the payment of occupation taxes 

on coin-operated machines on a quarterly basis. Attorney General 

Opinion O-3009 (1941). This office concluded that the comptroller had 

no authority to do so. The requestor had suggested that the following 

statute would permit such ,a rule: 

[T]he payment of the specific tax herein provided 

for, shall be required by the collector of 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. 1828 
Mr. 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 language does 

not appear in the Tax Code.) In dictum, this office said that the 

underlined language meant <hat payment of the occupation tax could be 

made on a quarterly basi,s in the initial year of payment. See - 

Attorney General Opinion O-,3009 (1941). 

The comptroller no lmger collects the occupation tax 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 statutes goveming the Texas Amusement Machine 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 

Attorney General of Texas 

JACKHIGRTOWRR 

First Assistant Attorney Goueral 

MARYKRLLKR 

Executive Assistant Attorney General 

ROBRRT GRAY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Sarah Woelk 

Assistant Attorney General 

p. 1829