,,. . 

TEIEATTORNEYGENERAL 

OFTEXAS 

WILL WILSON 

A’XTORNEY GENERAL 

Ausnni 1s. We 

October 6, 1960 

Honorable Robert S. Calvert Opinion No. w-949 

Comptroller of Public Accounts 

Capitol Station Re: Constitutionality of 

Austin, Texas occupation tax as levied 

by Art. 19.01 (8), H.B. 

11, 3rd C.S., 56th Leg. 

Dear Mr. Calvert: (Title,l22-A, R.C.S.) 

You have requested that we advise you upon the constitutionality of Art, 19.01 (8), H.B. 11, 3rd C.S., 56th Leg. 

(Title 122-A, R.C.S.), which reads as follows: 

"Nine and Ten Pin Alleys. From every 

person, firm, association of persons, or 

corporation, owning or operating for profit 

every nine or ten pin or other alley, by 

whatever name called constructed or operated 

upon the principle of a bowling alley, upon 

which pins, pegs, balls, rings, hoops, or 

other devices are used, & where the player 

thereof does not or is not re uireno make 

aa.Ud=i~-~ causin -+-- 

an e ec r cal connecmn of a; nature or kind before such game 

m & actually commenced, there shall be 

collected an annual tax of Ten Dollars 

for each track or alley." (Emphasis aidAil;)) 

We understand that a contention has been made by certain 

taxpayers that this article is violative of,Secs. 1 and 2 of 

Art. VIII, Constitution of Texas,l and that you desire our 

opinion upon the question so that you can determine a proper 

assessment of taxes upon this group. Our conclusion is that 

the questioned provision is not violative of the cited constitutional limitations. For clarity in discussion Where set out 

a brief review of the events culminating in this request: 

The emphasized portion of ,Art. lg.01 (8) above excludes 

from the tax machines sometimes referred to as "coin-operated 

1 

Sec. 1: "Taxation shall be equal and uniform. . . ." 

Sec. 2: "All occupation taxes shall be equal and uniform 

upon the same class of subjects within!,the limits 

of the authority levying the tax;. a . 
Honorable Robert S. Calvert, Page 2 Opinion No. WW-949 

bowling machines."2 Prior to February of 1958, an occupation 

tax was levied upon owners of such machines under the provisions 

of Arts. 7047a-2 et seq., V.C.S., levying a tax on certain 

coin-operated machines. These provisions insofar as here 

material were carried over substantially intact as Chapter 13 

of the new Title 122-A, from which we quote the following 

definition: 

"The term ~skill or pleasure coinoperated machines' means every coinoperated machine of any kind or character 

whatsoever, when such machine or machines 

dispense or are used or are capable of 

being used or operated for amusement or 

pleasure or when such machines are operated 

for the purpose of dispensing or affording 

skill or pleasure, or for any other purpose 

other than the dispensing or vending of 

'merchandise or music' or 'service' exclusively, as those terms are defined in 

this Chapter. The following are expressly 

included within said term: marble machines, 

marble table machines, marble shooting 

machines, miniature race track machines, 

miniature football machines. miniature golf 

machines, miniature bowling-machines, and 

all other coin- operated machines which 

dispense or afford skill or pleasure." 

(Bnphasis added.) 

Article 13.02 declares the amount of tax to be levied, 

from which we quote: 

"(1). . . . 

"(b) A fee of,Sixty Dollars ($60) shall 

be paid on each 'skill or pleasure coinoperated machine' where the coin, fee or 

token used, or which may be used, in the 

operationthereof is one of the value in 

excess of five cents (5qi) or represents a 

value in excess of five cents (54)." 

2 

These machines are ordinarily from 10 to 20 feet in length. 

The player deposits a coin, usually a dime, which activates 

the mechanism for play. At the far end of the machine pins 

are automatically spotted, whi.ch the player attempts to knock 

down with the small balls provided.. Scoring is by means of 

an electric scoreboard either on or near the machines. 
. - 

Honorable Robert S. Calvert, Page 3 Opinion No. WW-949 

On February 10, 1958, a rather cryptic judgment was 

entered by the Justice Court, Precinct 1, Place 1, Dallas 

County, Texas, in Cause No. 59286, in which one Fred Weeks 

had been charged with displaying a "Shuffle Alley" without 

a valid license. Apparently the license referred to was that 

authorized to be issued by the Comptroller's Office to evidence 

pa ent of the coin-operated machine tax under the then Arts. 

70 r 7a-2 et seq., V.C.S. This judgment held the defendant not 

guilty of the alleged misdemeanor "for the reason that, the 

devices alleged in the complaints were not in the scope and 

are not covered by Article 7047a-2 to Article 7047a-18, R.C.S., 

also known as the Texas Coin Operation (sic.) Machine Tax Law, 

as the offenses alleged do not come under the specifications 

of the Law being machines and instruments not covered under 

this Law." Following this statement, a bit of dictum is 

indulged In, stating that "If any Tax at all is to be collected 

it should be for an Occupation Tax and not under the present 

Texas Coin Operated Machine Tax Law." 

Apparently in observance of this judgment and as a result 

thereof, owners of such machines were, from that time, considered taxable under the provisions of Art. 7047, Section 

36, the predecessor of the presently questioned Art. 19.01(8), 

which subdivision then read as follows: 

"Nine and Ten Pin Alleys. From every 

person, firm, association of persons, or 

corporation, owning or operating for profit 

every nine or ten pin or other alley, by 

whatever name called, constructed or operated 

upon the principle of a bowling alley, upon 

which pins, pegs, balls, rings, hoops or 

other devices are used, there shall be collected 

annual tax of Ten Dollars ($10) for each track 

or alley, provided, however, that said tax 

shall not exceed One Hundred Dollars ($100) 

in any such year. Acts 1917 'p. 385; Acts 1943, 

48th Leg., p. 654, Ch. 372, & 1." 

This subdivision was expressly repealed by Sec. 7(b) of 

the new Title 122-A, being replaced by Art. 19.01 (8). Comparing the two provisions it will be seen that they are 

identical, except that (lj the exclusionary language in 

question was added, and (2) the limiting proviso at the end 

of the section was removed. Your specific question, reiterated, 

is whether or not the Insertion of this exclusionary clause now 
- , 

Honorable Robert S. Calvert, Page 4 Opinion No. WW-949 

renders the provision obnoxious to Sees. 1 and 2 of Art. 

VIII, Constitution of Texas, and therefore void.3 

It has long been the settled rule in this State that 

the Legislature is vested with wide discretion in the 

classification of occupations for the purpose of taxation. 

The landmark cases in this area are Texas Company v. Stephens, 

100 Tex. 628, 103 S.W. 481 (1907) and H t C 10T 

433, 110 S.W.2d 896 (1937). Sacrificin~ampviif~~~etr;m ?or "t$ 

sake of brevity, we will forego extensive quotation from these 

authorities. It is sufficient to state that this legislative 

discretion will only be questioned where the classification 

is clearly arbitrary. 

Looking at Art. 19.01 (8) as independent and new legislation, we think it evident that the Legislature was well 

within its discretionary bounds in classifying nine and ten 

pin alleys for taxation, and only taxing thereunder that class 

of devices "where the player thereof does not or is not or is 

not required to make a coin deposit causing an electrical connection." As said in the Stephens case, supra: 

"The mere fact that discrimination 

is made'proves nothing against a classification which is not, on its face, an 

arbitrary, unreasonable or unreal one." 

However,,we be,lieve that there is a further justification 

of this provision as it now exists. As stated, until February 

3 

It appears from your request and from subsequent conferences 

that the taxpayers involved put forth the following proposition: 

If, as they contend, Art. 19.01(8) is unconstitutional,,its 

companion repealer provision, repealing the original Art. 7047, 

Section 36, also fails, thereby leaving the original provision 

in full force and effect. Authorities are cited in support of 

this theory. In view of our decision, we deem it unnecessary 

to discuss this contention further than to here set it out. 

We do point out, however, that their view presupposes automatic 

re-establishment of the original status quo; that is, that your 

office will continue to classify the machines in question as 

falling within the definition of "Nine and ten pin alleys" 

instead of within the definition of "skill or pleasure coinoperate'd machines." 
. - 

Honorable Robert S. Calvert, Page 5 Opinion No. WW- 949 

of 1958 the class of coin-operated bowling machines described 

above were considered as and taxed as coin-operated machines. 

Such action received the implied approval of the Legislature, 

through acquiescence. Associated Indemnity Corp. v. Oil Well 

Drilling Co., 258 S.W.2d 523;aff'd. 153 Tex. 153, 264 S.W.2d 

697 (1953); Texas & N.O.R. Co. v. Railroad Commission, 145 

Tex. 541, 200 S.W.2d 626 (1946). However, when an abrupt 

change was made in that year, and such devices were suddenly 

considered taxable as "Nine and Ten Pin Alleys," the very next 

session of the Legislature found it necessary to further clarify 

their intent in this area. Since the coin-operated machine 

tax provision had already long contained language including 

"miniature bowling machines," the Legislature apparently felt 

that any further clarification should be made by language 

specifically excluding the group of devices under consideration 

from the scope of the nine and ten pin alley tax. The result 

was the addition of the questioned clause in Art. 19.01(8), 

not as an exception provision, but rather as an indication 

that it did not intend the class 'nine and ten pin alleys" to 

include the devices described. 

We have been referred to several cases holding attempted 

classification for tax purposes unconstitutional under Sets. 

1 and 2 of Art. VIII of the Constitution. We have likewise 

found many cases upholding questioned classifications. These 

are all, in effect, specific applications of the rule expressed 

by the Stephens and Cooper cases. Although each would bear 

in some degree upon the present question, a review of them 

would unduly len then this opinion. 

that Art. 19.01 7 8) 

As stated, we believe 

is a sound exercise of legislative discretion and not obnoxious to the cited constitutional sections. 

A supplement to your original request herein has recently 

been received by us, containing two further questions. The 

first such question is as follows: 

"I . Can two or more coin operated 

machines that are bolted together, 

boarded together, or connected in any 

like manner, having separate coin chutes 

and each machine operating individually, 

operate under one license or will each 

machine be required to have a license?" 

Chapter 13 of Title 122-A clearly contemplates a tax 

upon each coin-operated machine within its scope. The license 

referred to, of course, signifies payment of the tax (Art. 13.06). 

To allow evasion of the tax by so frail a subterfuge as bolting 

or boarding together two or more of these machines would be 
Honorable Robert S. Calvert, Page 6 Opinion No. WW-949 

a mockery of the plain legislative intent. You are therefore advised that, under the situation described in your 

question, each machine ~~111 be required to have a license. 

Your second supplementary question makes the inquiry 

"2 . Does the Attorney General Opinion 

No. S-122 and No. V-986 apply to the 

revision of the coin machine law now 

found in Chapter 13 of 122A-'TaxationGeneral'?" 

Opinion No. V986 (1950) held that a coin-operated 

electric scoreboard used to score suffleboard games is not 

"service coin-operated machine" and that the "owner" theretf is required to pay the o'ccupation tax under Articles 7047a2--7047a-18 (now Chp. 13, Title 122-A), V.C.S. You are advised 

that this Opinion is still applicable to the present law. 

Opinion No. S-122 (1954) held that coin-operated machines 

which are installed solely as services to customers of various 

business establishments are "service coin-operated machines," 

within the definition of that term as used in Arts. 7047a-2 

and 7047a-4 (now Arts. 13.01 (6) and 13.03, Title 122A,) V.C.S., 

and therefore not subject to tax. Of course, any machine which 

dispenses service only and not merchandise, music, skill or 

pleasure is specificall 

machine tax (Art.,l3.03 3 

exempted from the coin-operated 

; however, this would, in every case, 

be a question of fact. Even in situations similar to that 

prompting Opinion No. S-122 there could exist widely varying 

circumstances, which would determine whether such machines 

as discussed therein were being furnished solely as services 

or whether they were for the ,purpose of dispensing "skill or 

pleasure." Therefore, in the absence of a particular fact 

situation, we are unable to make a categorical statement concerning the applicability of Opinion No. S-122. 

,SUMMARY 

Art. 19.01 (8), H.B. 11, 3rd C.S., 

56th Leg. (Title 122A, R,C.S.) is not 

violative of the provisions of Art. VIII, 

Sees. 1 and 2, Constitution of Texas. 

When two or more separate coin-operated 

machines, subject to the tax imposed by 

Chp. 13, Title 122A, are joined together 

by some method, each machine is still 
Honorable Robert S. Calve?.+, Page 7 Opinion No. SJW-949 

required to have a license evidencing 

payment of the tax. Attorney General's 

Opinion No. V-986 is still applicable 

to the provisions of Chp. 13, Title 122A; 

Attorney Oeneral's Opinion No. v-986 may 

be applicable to specific situations 

arising under this Chapter. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

JRI:cm 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

Martin DeStefano 

Elmer McVey 

Iola Wilcox 

REVIEWED FOR THE ATTORNEY GENERAL 

By: Leonard Passmore