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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 3TAX ADMINISTRATION
SUBCHAPTER WAMUSEMENT MACHINE REGULATION AND TAX
RULE §3.602Licenses and Certificates, Renewals and Due Dates, Occupation Tax Permits and Exemptions

(a) Licenses and registration certificates.

  (1) Annual general business, import, and/or repair license fees, and registration certificate fees. Annual license and registration certificate fees are payable in advance and cannot be prorated quarterly.

  (2) Age requirement for issuance of a license. No natural person shall be issued a license by the comptroller for the operation of coin-operated machines unless at the time the license is issued the applicant is more than 18 years of age.

  (3) Information requirement for issuance of a license or registration certificate. An applicant for a license or registration certificate must provide all information required by 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 machine. A registration certificate holder must notify the comptroller in writing of any change in ownership of a 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 one or two sales of coin-operated machines during any 12-month period if the certificate holder does not hold out as engaging (or does not habitually engage) in the business of selling coin-operated machines without losing the licensing exemption. Before the third sale of a coin-operated machine in a 12-month period by a certificate holder not previously in the business of selling, leasing, or renting coin-operated 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.

(b) Annual general business, import and repair license renewals, and annual occupation tax.

  (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 amusement machines after the expiration date until the renewal license is issued. A person who operates amusement machines without a license or with an expired license is guilty of a Class A misdemeanor.

  (2) An applicant who properly completes the application and remits all fees and taxes with it by the due date may continue to operate 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.

(c) Annual registration certificate renewals and annual occupation tax.

  (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 operate amusement machines after the expiration date until the renewal certificate is issued. A person who operates 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 application and remits all fees and taxes with it by the due date may continue to operate 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) License and registration certificate fees may not be prorated quarterly and the annual license or registration fee must be submitted with an application.

(d) Occupation tax permits.

  (1) Occupation tax. Each amusement machine is subject to the occupation tax at the time a person exhibits, displays, or permits a machine to be exhibited or displayed in this state with the exception of annual renewals. 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.

  (2) Rate schedule. The following rate schedule will be applicable to machines first exhibited or displayed or permitted to be exhibited or displayed in this state in any quarter of the calendar year:

Attached Graphic

  (3) Replacement of lost, stolen, or destroyed valid Occupation Tax Permits. The comptroller shall provide a duplicate permit if a valid permit has been lost, stolen, or destroyed. The fee for each duplicate permit is $5.00. If a 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 including the number of the lost, stolen, or destroyed permit, before a replacement permit can be issued. A permit for which a duplicate permit has been issued is void.

  (4) Assignment of tax permits. Each coin-operated machine operated 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 machine shall have a serial number and the name and telephone number of the owner of said machine must be clearly visible on the outside surface of the machine cabinet. If a coin-operated machine is not manufactured with a serial number, a licensee 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 by submitting written notice, as described in subsection (a)(4) of this section, to the comptroller within 10 days of the transfer of title or possession of a machine.

  (5) Attachment of tax permits. Tax permits shall be securely affixed to any permanent surface on a machine in such a manner that the tax permits may be clearly seen by the public and cannot be removed without the continued application of steam and water. Tax permits shall not be attached to a machine that has not been registered with the comptroller.

  (6) Issuance of extra tax permits. The comptroller will issue permits only for machines that are exhibited or displayed on location. The taxpayer shall not stockpile permits nor shall any permits be affixed to unregistered machines.

  (7) Exemptions. In order to establish that an organization is exempt from the license requirements pursuant to the Coin-Operated Machines Occupations Code, §2153.005, the organization must do the following:

    (A) submit a written statement to the comptroller setting out 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.

  (8) Written notice. After a review of the material, the comptroller will inform the organization in writing if it qualifies for an exemption.


Source Note: The provisions of this §3.602 adopted to be effective December 17, 1996, 21 TexReg 11808; amended to be effective April 13, 2005, 30 TexReg 2097

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