PRICE DANIEL 

,\TT”RYEY GF.NERAL 

*%rrcaTlN 11. -rExan 

January 23, 1950 

Ron. Robert S. Calvert Opinion NO. v-986. 

Comptroller of Public Acoounts 

Austin, Texas Re: Whether “owner.” of 

coin-operated eleotric 

scoFcboard is subject 

to ocoupatlon tax lmposed on ‘owners” of 

certain oofn-operated 

Dear Sir: machines e 

You have requested the opinion of this oSSlce 

aa to whether the occupation tax imposed on the “owner” 

of coin-operated vending maohines by Articles 7047a-2 to 

7047a-18, v.c.s., would be applLcsble to owners of coinoperated electric scoreboards used in connection wLth 

shuffleboard games. From the file sttached to your FOquest we have gathered the following Sects with regard 

to such scoreboards. 

The Regal Electric Scoreboard is advertised 

as havLng the following features: “Wall mounting type - 

Hardwood cebinet . e - - 4 color silk stzeen panel- D . a 

Ace lO$ coin chute - Full Anti-Cheat Protection - Large 

easily read figures e e V -All At a Price Which Will Be 

More TZlan Cowered By Increased Returns From Your ShuSSleboard *” OraQre of shuSSleboard games am queried thus: 

‘%hy spend so muah of your time keeping 

tracks of ths play, and %ncome, Srom your 

shuffleboard? A Regal scoring unit will act 

as an automatic collecting device and save 

you unlimited . o . time ana trouble . . e 

eltiinate misunderstandings over number of 

games played- e . q It will definitely increase your incorae Srom your shuffleboard e ’ 

The manufacturers of these machfnes contend 

that ther are not coin-opereted amusemeE& devices inasmuch as they are not games and do not oontrol the playing of shuffleboati but merely register the scores end 

supply the servloe of collection for the merchant in 

whose eatablfshment shuffleboard is being played. 
Eon. Robert S. Calvert, pege 2 (v-986) 

Artlale 7047a-3 provides thet “Rvery ‘Owner’ 

as that term is hemfnebove defined, who.owns, controls, 

. e . or who permits to be exhibited or displayed . e . 

eny ‘coin-opereted machines ’ as that term is defined 

herein, shall peg e . . an annual occupation tex.” 

Article 7047a-4 exempts from the tax levied 

by the Act “gas meters, pay telephones, pay toilets, 

and cigarette vending mechines whioh are now subject to 

an occupation or gross receipts tex and ‘service coinoperated machines ’ as that term is defined, a . a ‘I 

Article 7047a-2(c) provides .as Sollows: 

“(c) The term ‘aoln-opereted machine’ as 

used herein shall meen end include every meohtne or device of any kind or character 

which Is operated by or with coins, or metal 

slugs, tokens or checks, ‘merohandise or 

music coin-operated machines’ and fskfll or 

pleasure coin-operated machines ’ as those 

terms ere hereinafter defined, shall be included in such terms.” 

The statutory definition of a “merchandise or 

music coin-operated machine” is clearly not applicable 

to the electric scoreboards here being consIderad. 

Sections (e) and (I) of Article 7047e-2 reed 

as Sollowsa 

“(e) The term ‘skill or pleesure oolnoperated machines ’ as used herein shell meen 

and Inelude every coin-operated machine of 

any Lind OF oharaoter whatsoever, when such 

aaohine or machines dispense or are used or 

are capable of being used or opereted for 

amusement or pleasure or when srrah machines 

are operated for the purpose of dispensing 

or affording skill or pleasure, or SOP any 

other purpose other than the dispensing or 

vending of ‘merohendise or muslo’ or ‘service ’ exclusively, as those terms are defined herein. The SollowIng are expressly lneluded within seid terms marble maohines, 

marble table machines, marble shooting maahines, minleture race track machines, miniature football machines, mlnature golf machines, miniature bowling maohines, and all 
Hon. Robert S. Calvert, page 3 (v-986) 

other coin-operated machines which dispense or afford skill or pleasure. Provided that every machine or device of any kind 

or character which dispenses or vends merchandise, commodities OF confections or 

plays music in connection with or in addition to such games or dispensing OS skill 

or pleasure shall be considered as skill or 

pleasure machines and taxed at the higher 

rate fixed for such machines. 

"(S) The teno 'service coin-operated 

machines' shall mean and include pay toilets, 

peg telephones and all other machines or devices which dispense service only and not 

merchandise, music, skill or pleasure." 

IS the scoreboards do not come within the statutory definition of "service coin-operated machines" they 

must automatically be classified as "skill or pleasure 

coin-operated machines", and the "otiner" thereof will 

therefore be liable for the occupation tax imposed by 

these articles. 

House Bill 223, Acts 44th Leg., R.S. 1935, ch. 

354, p.905, which attempted to impose an occupation tax 

on the "owner" of coin-operated vending machines, was 

held invalid in Sheppard v. Giebel, 110 S.W.2d 166 (Tex. 

Civ.App.1937) o This Aot, which we will hereinafter refer to as the original Act, was deolered unconstitutional in toto by reason of the ambiguity of those provisions 

providing for payment of the tax. Other provisions of 

the statute were disoussed by the oourt in the course of 

the opinion and because the exemption provisions of the 

original Act and the exemption provisions of our present 

statute are very similar, we will be guided by the court's 

construction thereof. 

The original Act provided, in psrt, as Sollowsn 

"Sec. 4. Gas meters, pay telephones, 

cigarette vending maohines, pay tolleta installed and used for sanitary purposes, and 

all maahines engaged in vending a service are 

expressly exempt from the provisions of this 

Act. 

"Sec. 4a. The exemptions provided herein are recognized and made by reason of the 
I . 

Hon. Robert 3. Calvert, pege 4 (v-986) 

Sect that gas meters, pay telephones and cigarette vending machines ere now subject to 

the psyment of an occupation tax under existing laws, end pay toilets being service vendlna machines. are not covered by the levy made 

he&by." - 

With regard to these provisions the oourt said: 

n 

. * . it is manifest 

chines exempted in section 

lservice vending machines' 

the other exemptions named 

. _ . . 

.that the only ma4 because deemed 

were pay toilets; 

being exoluded from 

- _. _ _ 

nne tax oecause tney were already taxea unaer 

existing laws. While tservice vending machines' 

were exempt, the act nowhere undertook to deSine what should be deemed such machines, and 

the only type of machine named as falling within this olass was pay toilets. In defining the 

classes of machines to be taxed in section le 

of the act9 it is to be noted that *service 

vending machines' are not mentioned as such. 

On the contrary, the act is limited to machines 

vending fmerchandise, oompodities, conSections, 

amusement, or pleasure.' It reasonably appears, 

therefore, that it was the legislative intent 

to include within the taxing act, other than 

maohines vending some sort of commodity or 

merchandise, only machines designed to afford 

amusement or pleasure. Following this general deSinition were speclSically named numerous mechines aoming within the terms of the 

act, the first one of whioh was a 'phonograph' 

operated by inserting a coin, slug, token, or 

oheck. Rven if it be oonoeded, therefore, that 

the appellees' machines be oonsidered service 

vending maohines as oontradistinguished from 

machines vending articles of meFchandfse, the 

Sect that maohlnes vending that oharacter of 

service olassed as amusement or pleesure were 

expressly included in the act, end, further, 

the speoific lnolusion of phonographs so operated, manifests a olear legislative intent that 

suoh machines were to be taxed and not exempted. Manifestly there is e clear and reasonable 

basis of classiSication in separating this class 

of vending maehines Srom such service vending 

maohines es pay toilets, pay telephones, etc.; 

and such reasonable basis of classification is 
Hon. Robert 8. Calvert, page 5 (v-986) 

suSSicient to sustain the validity of the 

act. 

11 

. . . 

"We think that there can be no doubt 

that there is, because of the difference in 

the nature, manner of operation, and purpose, 

a reasonable basis for a difference of classification between the type of machines used 

merely for amusement and pleasure, such as 

those named in section la of the act, and 

those designed to serve the public health, 

convenience, and necessity, such as pay toilets. That being true, the act should not 

be stricken down for that reason." 

It is noteworthy that the present act adds but 

one 

niti 

speciSic example, i.e., pay telephonesr in its defi- 

.on of "service coin-operated machines.' (Those included in the "occupation tax" group in the original exemption provision era still given as examples of this 

class in the present statute.) 

Thus we have little or no more by way of statutory definition of a "service" machine than had the court 

in the Giebel case. We are therefore inclined to adopt 

the view of the court that "service" machines are "those 

deslgned to serve the public health, convenience and necessity, such as pay toilets." We find no service of 

this character in coin-operated electric scoreboards. Indeed, it is apparent that the chief service is not for 

the convenience of the public but for the convenience of 

the "owner" of such machines. We further thfnk that such 

service as is rendered the public by the electric scoreboards would be that character of service classed as amuaement or pleasure and therefore within the statutory definition of a "skill or pleasure coin-operated machine". 

Surely the manufacturer of these machines would not permit the suggestion that they do not contribute to the 

pleasure of playing the game they are designed to score. 

When so used we think they become an Integral part of 

the game, rendering imaterial the fact that the game 

could be played without them. We are therefore of the 

opinion that an "owner", as that term la defined in the 

Act, of one of these machioes would be required to pay 

;$e r;uFtion tax imposed by Articles 7047a-2 to 7047a- 

, 

. D . 
1 . . 

ROU. Robert 3. Calvert, page 6 (v-986) 

SUMMARY 

A coin-operated electric scoreboard 

used to score shuffleboard games Is not a 

"service coin-operated machlne"; and an 

"owner", as that term is defined by Artfcle 7047a-2, V.C.S., must pay the occupation tax Imposed by Articles 70478-2 -- 

7047a-18, v.C.8. 

APPROVED: 

W. V. Geppert 

Taxation Division 

Charles D. Mathewa 

Executive Assistant 

MMC:ebm:mw 

YOUPS very truly, 

PRICE DANIEL 

Attorney General