Court Opinion

ID: 4134230
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:47:43.915917+00
Date Added: 2024-06-11T14:37:12.449401
License: Public Domain

NEX       GENERAL
                                       EXAS

Honorable Robert S. Calvert            Opinion No. M-437
Comptroller of Public Accounts
State Capitol Bllilding                Rer    House Bill No. 579,
Austin, Texas   78711                         Chapter 497, Acts of
                                              the 61st Legislature,
                                              page 1606 (Title 122A,
                                              Taxation General, V.C.S.),
                                              regarding certain cofn-
Dear Mr.   Calvett:                           operated machines.
     In your recent request for opinion you present the follw-
ing questions:
           "Will an annual license fee under Section 16(l)
           of Article 13.17 of House Bill No. 579 be re-
           quired from the follwingr
               ” (a)   The owner of a coin-operated
                       machine or machinbs which are
                       operated by him exclusively in a
                       liquor store wholly owned and
                       operated by him, in which alco-
                       holic beverages are consumed and'
                       sold.
               "(b)    The owner?of a coin-operated machine
                       or machines which are operated by
                       him~exclusively in bars or taverns
                       operating under one or more permits
                       issued by the Liquor Control Board
                       which are owned by him.
               II(4    The owner of a coin-operated machine
                       or machines which are operated by
                       him exclusively ina cafe, wholly
                       owned and operated hy him, where no
                       alcoholic beverages are sold,
           "In regard to each of these questions, please as-
           sume that the machines are owned and used directly
           and strictly in connection with such an establishment

                                   -2177-
Honorable Robert S. Calvert, page 2 (M-437)

         as distinguished from the business of dealing
         in coin-operated machines as such.
        "Will the Comptroller be required to'collect
        the additional permit fee on coin-operated
        machines for the last two quarters of the
        current year on previously issued permits
        under Article 13.02, Article 13.17, Section
        27(g), Section 2 which amends Article 13.02
        increasing the Annual State Permit Fee on
        coin-operated machines from $10 to $15."
     Section 16(l) of Article 13.17 (Rouse Bill 579, Chapter 497,
Acts of the 61st Legislature, page 16061, reads as follows:
         "The annual license fee for each type and
         place of business license under this article
         is $300.00."
     It is in Section 8 of such Article 13.17 that we fi,nd refer-
ence to the type and place of business that must be licensed
under the Article. A portion of Section 8 reads as follows:
         "(1) No person shall engage in business to
              manufacture, own, buy, sell, or rent,
              lease, trade, lend, or furnish to another,
              or repair, maintain, service, transport   ~~.
                                                          .,
              within the state, store, or import, a
              music coin-operated machine or a skill
              or pleasure coin-operated machine without
              a license issued under this Article.
         II     0 . .
         "(3)   No license is required for a corporation
                or association organized and operated ex-
                clusively for religious, charitable, edu-
                cational, or benevolent purposes, no part
                of the net earnings of which inure to the
                benefit of any private shareholder or
                individual, to own, or lease or rent from
                another, a music or skill or pleasure
                coin-operated machine for the corporation's
                or association's exclusive use and in
                furtherance of the purposes for which it
                is established.

                               -2178-
    .     .

        Honorable Robert S. Calvert, page 3 @I4371

                 “(4)   No license is required
                                           _ .--for an individual
                        to own a music or SK111 or pleasure coin-
                        operated machine for personal use, and
                        amusement in his private residence."
             To engage in *business" is to engage in a "commercial enter-
        prise". Webster's Third New International Dictionary. Although
        the recovery of a profit or the expectation thereof is not a
        necessary element of a "business", it is the opinion of this office
        that one who owns a coin operated machine and operates the same in
        his place of buiness or any other commercial enterprise in the
        hope or expectation of making a profit therefrom, or as a "loss
        leader" for his other business, as each of your situations imply,
        is engaged in the commercial enterprise or business of owning such
        machine. If the owner, referred to in your first question in situ-
r       ations (a), (b) and (c), does not come within any of the exceptions
        of Section 8(3) or 8(4), above quoted, then such owner in each of
        the three situations will be required to obtain the annual license
        referred to in Section 16(l) of Artic&e 13.17.
             In regard to your second question, House Bill 579 becomes
        effective on September 1, 1969 (90 days after the Legislature
        adjourned). The annual occupation tax on each coin-operated
        machine is raised from $10.00 to $15.00. The Legislature is not
        inhibited by the Constitution from raising the amount or rate of
        taxes at any time. Mann v. Gulf States Utilities Company, 167
S.W.2d 557 (TeX.CiVJiDD. 1942. error ref.): Attornev General's
        Opiniwn No..V-1246, 1931. In-this instance, under Article 7052,
        V.C.S., the Comptroller has the duty of collecting the additional
        $5.00 annual tax on a pro rata basis for the last two quarters
        of the current year. As pointed out in Attorney General's Opin-
        ion No. o-3009, 1941, when the tax or license fee is due on an
        annual basis, a quarter must be treated as a full quarter. In
        other words, if the original $lO,OO tax has been paid, $2.50
        additional should be collected, so as to effect a complete collec*
        tion of the 1969 annual tax.
                                       SUMWARY

                An annual license fee under Section 16(l) of Arti-
                cle 13.17, Title 122A, Taxation-General, Vernon's
                Civil Statutes, House Bill Yo. 579, Chapter 497,
                Acts of the 61st Legislature, page 1606, will be
                required for the owner of a music coin-operated
                machine or a skill or pleasure coin-operated machine
                which arm operated by him exclusively in a liquor
                store, bar, or cafe wholly owned and operated by
                him, The Comptroller should collect the additional
                $5.00 snnual occupation tax provided by the new    1
                                      - 2179 -
                                                                 -.   ..

Honorable Robert S. Calvert, page 4 (M- 437)

         amendment to Article 13.02, Title 122A, Taxatfon-
         General, V.C.S., for the balance of the current
         year after the effective date of the mndwnt
         (September 1, x969) on a pro rata basis, meaning
         that under Article 7052, V.C.S., the additional
         sum of $2.50 should be collected on each machine
         in order to effect full collection of the 1969
         annual tax.
                                  Ve      lY YOU-r
                                    T

                                               nerd   of Team8
Prepared by Harold
Assistant Attorney
APPRovEDa
OPINION CCMM1TTF.E
Kerns Taylor, Chairman
George Kelton, Vice-Chairman
Roger Tyler
Houghton Brwnlee, Jr.
Bob Flowers
Tom Bullington
Hawthorne Phillips
Executive Amsistant

                               -2180-