|
(a)Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1)Coin-operated amusement machine--Any kind of machine
or device operated by or with a coin or other United States currency,
metal slug, token, electronic card, or check, that vends or dispenses
music or is operated for skill or pleasure. The term does not include
an amusement machine designed exclusively for children under 12 years
of age.
(2)General business license holder--A person who may
engage in the business of manufacturing, owning, buying, selling,
renting, leasing, trading, maintaining, transporting, or exhibiting
in Texas, or storing a coin-operated amusement machine.
(3)Import license holder--A person who may engage
in the business of importing, transporting, owning, buying, repairing,
selling, or delivering a coin-operated amusement machine for sale
or delivery in this state.
(4)Person--An individual, association, trustee, receiver,
partnership, corporation, or other organization or legal entity, or
a manager, agent, servant, or employee of an individual, association,
trustee, receiver, partnership, corporation, or other organization
or legal entity.
(5)Registration certificate holder--A person who is
exempt from the licensing and recordkeeping requirements in Occupations
Code, Chapter 2153 (Coin-Operated Machines) but who may not exhibit
a coin-operated amusement machine unless the machine is registered
annually with the comptroller.
(6)Repair license holder--A person who may engage
in the business of maintaining, transporting, or storing a coin-operated
amusement machine.
(7)Tax permit--The decal issued by the comptroller
to an owner of a coin-operated amusement machine evidencing the payment
of the occupation tax.
(b)Licenses and registration certificates.
(1)Annual general business, import, and/or repair
license fees, and registration certificate fees. Annual license and
registration certificate fees for a general business license holder,
import license holder, repair license holder, and a registration certificate
holder are payable in advance and cannot be prorated. The annual fees
are as follows:
(A)for a general business license applicant with 50
or fewer machines, the fee is $200;
(B)for a general business license applicant with 51
to 200 machines, the fee is $400;
(C)for a general business license applicant with over
200 machines, the fee is $500;
(D)for an import license applicant, the fee is $500;
(E)for a repair license applicant, the fee is $50;
and
(F)for a registration certificate applicant, the fee
is $150.
(2)Age requirement for issuance of a license or registration
certificate. No individual shall be issued a license or registration
certificate by the comptroller for the operation of coin-operated
amusement machines unless at the time the license or certificate is
issued the applicant is 18 years of age or older.
(3)Information requirement for issuance of a license
or registration certificate. An applicant for a license or registration
certificate must provide all information required on the comptroller's
application before a license or registration certificate will be issued
or renewed.
(4)General business license and registration certificate
notification requirement. A general business license holder must notify
the comptroller in writing within 10 days of any change in ownership
of a coin-operated amusement machine. A registration certificate holder
must notify the comptroller in writing of any change in ownership
of a coin-operated amusement machine and each time the location of
a machine is changed within 10 days of the change.
(5)Occasional sale exemption for registration certificate
holder. A registration certificate holder may make two sales of coin-operated
amusement machines during any 12-month period without being required
to obtain a general business or import license, if the certificate
holder does not hold out as engaging (or does not habitually engage)
in the business of selling coin-operated amusement machines. Before
the third sale of a coin-operated amusement machine in a 12-month
period by a registration certificate holder not previously in the
business of selling, leasing, or renting coin-operated amusement machines,
a general business or import license must be obtained. The transfer
of title or possession of more than one machine in a single transaction
will constitute one sale.
(c)Annual general business, import, and repair license
renewals.
(1)License renewal applications are due November 30.
License renewal applications will not be considered complete for processing
unless the tax due and the license fee are remitted. Complete license
renewal applications filed after the due date may result in the renewal
license being issued after December 31, the expiration date of the
existing license. In such a case a person may not operate coin-operated
amusement machines after the expiration date until the renewal license
is issued. A person who operates coin-operated amusement machines
without a license or with an expired license is guilty of a Class
A misdemeanor.
(2)An applicant who properly completes the license
renewal application and remits all fees and taxes with it by the due
date may continue to exhibit or display coin-operated amusement machines
after the expiration date if the applicant's license renewal has not
been issued unless the applicant is notified by the comptroller prior
to the license expiration date of a problem with the license renewal.
(3)The annual license fee must be submitted with a
license renewal application. License fees may not be prorated.
(4)Late-filed application for license renewal. If
an application for renewal of an unexpired license is postmarked December
1 - December 31, the applicant must remit a late fee of $50 in addition
to the annual license fee listed in subsection (b)(1) of this section.
(5)Application for renewal of an expired license.
(A)A license holder may renew an expired license if
it has not been expired for more than 90 days by paying to the comptroller
a fee that is 1-1/2 times the amount of the annual license fee listed
in subsection (b)(1) of this section.
(B)A license holder may renew an expired license if
it has been expired for more than 90 days but less than two years
by paying to the comptroller a fee that is two times the amount of
the annual license fee listed in subsection (b)(1) of this section.
(C)A person whose license has been expired for two
years or more may not renew their license and must comply with the
requirements and procedures for obtaining a new license under subsection
(b) of this section. In addition to other penalties allowed by law,
each person whose license has been expired for two years or more and
who has been engaged in business as a general business license holder,
import license holder, or repair license holder must remit to the
comptroller an amount equal to two times the amount of the annual
license fee listed in subsection (b)(1) of this section for each year
that the person engaged in business with an expired license.
(d)Annual registration certificate renewals.
(1)Registration certificate renewal applications are
due November 30. Registration certificate renewal applications will
not be processed unless the tax due and the registration fee are remitted.
Registration certificate renewal applications filed after the due
date may result in the renewal registration certificate being issued
after December 31, the expiration date of the existing registration
certificate. In such a case, a person may not exhibit or display coin-operated
amusement machines after the expiration date until the renewal certificate
is issued. A person who exhibits or displays coin-operated amusement
machines without a registration certificate or with an expired registration
certificate is guilty of a Class A misdemeanor.
(2)An applicant who properly completes the registration
certificate renewal application and remits all fees and taxes with
it by the due date may continue to exhibit or display coin-operated
amusement machines after the expiration date even if the registration
certificate renewal has not been issued, unless the applicant is notified
by the comptroller prior to the registration certificate expiration
date of a problem with the registration certificate renewal.
(3)Registration certificate fees may not be prorated
and the registration fee must be submitted with the registration certificate
renewal application.
(4)Late-filed application for registration certificate
renewal. If an application for renewal of an unexpired registration
certificate is postmarked December 1 - December 31, the applicant
must remit a late fee of $50 in addition to the annual registration
certificate fee listed in subsection (b)(1) of this section.
(5)Application for renewal of an expired registration
certificate.
(A)A registration certificate holder may renew an
expired registration if it has not been expired for more than 90 days
by paying to the comptroller a fee that is 1-1/2 times the amount
of the annual registration fee listed in subsection (b)(1)(F) of this
section.
(B)A registration certificate holder may renew an
expired registration if it has been expired for more than 90 days
but less than two years by paying to the comptroller a fee that is
two times the amount of the annual registration fee listed in subsection
(b)(1)(F) of this section.
(C)A person whose registration has been expired for
two years or more may not renew their registration and must comply
with the requirements and procedures for obtaining a new registration
certificate under subsection (b) of this section. In addition to other
penalties allowed by law, each person whose registration has been
expired for two years or more and who has been engaged in business
as a registration certificate holder must remit to the comptroller
an amount equal to two times the amount of the annual registration
fee listed in subsection (b)(1) of this section for each year that
the person engaged in business with an expired registration.
(e)Occupation tax permits.
(1)Occupation tax. Each coin-operated amusement machine
that an owner exhibits, displays, or permits to be exhibited or displayed
in this state is subject to an annual occupation tax. With the exception
of annual renewals, the occupation tax is due at the time the owner
exhibits or displays the machine, or permits the machine to be exhibited
or displayed, in this state. The occupation tax for annual renewals
for each machine exhibited or displayed or permitted to be exhibited
or displayed in this state is due November 30 of each year. The purchase
of a tax permit is payment of the occupation tax.
(2)Tax rate. The tax rate is $60 per year. When a
coin-operated amusement machine is first exhibited or displayed or
permitted to be exhibited or displayed in this state, the occupation
tax for the calendar year is prorated as follows:
(A)for a tax permit issued January 1 to March 31,
the amount of tax is $60;
(B)for a tax permit issued April 1 to June 30, the
amount of tax is $45;
(C)for a tax permit issued July 1 to September 30,
the amount of tax is $30; and
(D)for a tax permit issued October 1 to December 31,
the amount of tax is $15.
(3)Replacement of lost, stolen, or destroyed valid
occupation tax permits. The comptroller shall provide a duplicate
tax permit if a valid tax permit has been lost, stolen, or destroyed.
The fee for each duplicate tax permit is $5.00. If a valid tax permit
is lost, stolen, or destroyed, a written statement must be submitted
explaining the circumstances by which the tax permit was lost, stolen,
or destroyed, and must include the number of the lost, stolen, or
destroyed tax permit before a replacement tax permit can be issued.
A tax permit for which a duplicate permit has been issued is void.
(4)Assignment of tax permits. Each coin-operated amusement
machine exhibited or displayed in Texas for music, skill, or pleasure
shall be registered with the comptroller by make, model, and serial
number. A tax permit issued by the comptroller shall be affixed to
each registered machine. Each coin-operated amusement machine shall
have a serial number, and the name and telephone number of the owner
of each machine must be clearly visible on the outside surface of
the machine. If a coin-operated machine is not manufactured with a
serial number, a license holder or registration certificate holder
shall assign a serial number to the machine and either stamp or engrave
the assigned number on the machine cabinet. If all these requirements
have been met, a tax permit may be assigned to a purchaser by submitting
written notice, as described in subsection (b)(4) of this section,
to the comptroller within 10 days of the transfer of title or possession
of a coin-operated amusement machine.
(5)Attachment of tax permits. Tax permits shall be
conspicuously affixed to any permanent surface of the coin-operated
amusement machine to make the tax permit visible for inspection without
movement of the machine. Tax permits shall be securely and completely
affixed to the coin-operated amusement machine so they cannot be removed
without continued application of steam and water. Tax permits shall
be completely affixed to a permanent surface of the coin-operated
amusement machine by use of the adhesive exposed on the back of the
tax permit following complete removal of the protective backing. It
is unlawful to enclose any tax permit in a plastic cover, or on a
removable cover made of plastic, metal, or any other material, or
to in any way affix the tax permit in a less than permanent manner
so the tax permit can be removed or moved from one machine to another
without the destruction of the tax permit resulting as a consequence
of such removal. Tax permits shall not be affixed by the use of tape.
Tax permits are not transferrable from one person to another or from
one machine to another, and cannot be affixed to a machine that has
not been registered with the comptroller.
(6)Invalid tax permits.
(A)Any tax permit not properly displayed as described
in paragraph (5) of this subsection is invalid. Any tax permit not
affixed to a permanent surface of a coin-operated amusement machine
as described in paragraph (5) of this subsection by use of the adhesive
backing on the permit is invalid. Any tax permit removed from a coin-operated
amusement machine is invalid.
(B)The comptroller will not issue a duplicate tax
permit to replace a tax permit that is invalid. A new tax permit must
be purchased to replace an invalid tax permit.
(C)The comptroller may assess a penalty of not less
than $50 or more than $2,000 against an owner who permits a coin-operated
amusement machine under the owner's control to be operated, exhibited,
or displayed in this state without a valid tax permit or against a
person who exhibits or displays a coin-operated amusement machine
in this state without a valid tax permit. The comptroller may assess
a penalty for each day a violation occurs.
(7)Issuance of extra tax permits. The comptroller
will issue tax permits only for coin-operated amusement machines that
are exhibited or displayed on location. The owner shall not stockpile
permits or attach tax permits to unregistered machines.
(f)Exemptions.
(1)Establishing an exemption. In order to establish
that an organization is exempt from the license requirements pursuant
to Occupations Code, §2153.005 (Exempt Corporations and Associations),
the organization must do the following:
(A)submit a written statement to the comptroller explaining
in detail the nature of the activities conducted or to be conducted,
a copy of the articles of incorporation if the organization is a corporation,
a copy of the bylaws, a copy of any applicable trust agreement or
a copy of its constitution, and a copy of any letter granting exemption
from the Internal Revenue Service; and
(B)furnish any additional information requested by
the comptroller including, but not limited to, documentation showing
all services performed by the organization and all income, assets,
and liabilities of the organization.
(2)Written notice. After a review of the material,
the comptroller will inform the organization in writing if it qualifies
for an exemption.
(3)Private ownership exemption. An individual who
owns a coin-operated amusement machine for personal use in the individual's
private residence is not required to obtain a license or pay a tax
under this section.
The agency certifies that legal counsel has
reviewed the adoption and found it to be a valid exercise of the agency's
legal authority.
Filed with the Office
of the Secretary of State on May 15, 2020
TRD-202001936 William Hamner
Special Counsel for Tax Administration
Comptroller of Public Accounts
Effective date: June 4, 2020
Proposal publication date: November 22, 2019
For further information, please call: (512) 475-0387
|
