Untitled Texas Attorney General Opinion ( 1954 )

February 9, 1954 Hon. Robert S. Calvert Comptroller of Public Accounts Capitol Station Austin, Texas Opinion No. S- 122 Re: Applicability of the tax on coin-operated machines im- posed by Article 7047a-2, et seq., V.C.S., to coin-operat- ed devices installed solely as Dear Mr. Calvert: a service to the customers. Your request for an opinion from this office reads in part as follows: L‘ . . . There are now a number of coin-operated rides located in business establishments such as: gro- cery stores, department stores, drug stores, etc. The operators and owners of these rides state that the rides ar,e installed by the establishments solely as a service to their customers. The machines do not dispense any merchandise.” The definitions of terms and phrases as used in the “coin-operated machine tax” statute appear in Article 7047a-2, V.C.S. Subsection (f) reads as follows: ‘The term ‘service coin-operated machines’ shall mean and include pay toilets, pay telephones and all other machines or devices which dispense service only and not merchandise, music, skill or pleasure.” Article 7047a-4 states as follows: ,* Gas meters, pay telephones, pay toilets, and cigar- ette vending machines which are now subject to an occu- pation or gross receipts tax and ‘service coin-operated machines’ as that term is defined, are expressly exempt from the tax levied, herein, and the other provisions of this Section.” A determination that the machines are installed sole- ly as a service,to the customers of the various business establish- ments warrants the exemption of these devices from the tax as Hon. Robert S. Calvert, page 2 (S-122) “service coin-operated machines.” You refer us to our Opinion No. S-91. The statement of facts in this earlier opinion indicates machines devoted to the dispensing of pleasure. The devices described in your present re- quest denote the dispensing of a service as distinguished from the dispensing of pleasure. SUMMARY Coin-operated machines installed in business es- tablishments solely as a service to the customer are exempt from the coin-operated machine tax. Yours very truly, JOHN BEN SHEPPERD Attorney General By!j&$!&..,- wu William W. Guild Assistant APPROVED: W. V. Geppert Taxation Division Robert S. Trotti First Assistant John Ben Shepperd Attorney General WWG:mg