                                The Attorney          General of Texas

JIM MAlTOX                                        December20, 1985
Attorney General                                                        JM-399 OVERRULED H-708


Supreme Court Building         Mr. Jim Lusk                             OpinionNo. m-399
P. 0. Box 12549
Austin, TX. 79711. 2549
                               ExecutiveDirector
51214752501                    Texas AmusementMachine Commission        Re: Prorationof occupationtax
Telex 9101874.1367             P. 0. Box 13226, Capitol Station         under article 8802, V.T.C.S.,
Telecopier 5121475-0286        Austin,Texas 78"l.l                      and proration of license and
                                                                        registrationfees under article
714 Jackson, Suite 700                                                  8817, V.T.C.S.
Dallas, TX. 75202.4509
21417428944                    Dear Mr.   Lusk:

4824 Alberta Ave., Suite 180
                                   You ask severlrl.
                                                   questionsregardingproratioaof certain fees and
El Paso, TX. 79905.2793
                               taxes to be collect,zd
                                                    by the Texas AmusementMachine Commission. The
915/5333494                    commission issues .and collects fees for licenses and registration
                               certificatesfor persons who engage in business activitiesinvolving
                               coin-operatedmacI.ines. V.T.C.S. art. 8817. The cmisslon also
1001 Texas, Suite 700          collects the annual occupation tax on coin-operated machines.
Houston, TX. 77002.3111
7131223-5886
                               V.T.C.S. art. 8802.

                                    Your first qucmtiondeals with fees for licensesand registration
506 Broadway, Suite 312        certificates. Art:lcle 8817 specifiesannual fees for various licenses
Lubbock, TX. 79401.3479        and sets a $50 registrationfee for persons who are exempt from the
So6(747-5238
                               licensingrequiremnts but who own and exhibit coin-operatedmachines.
                               V.T.C.S. art. 8817,,5116, 16A. All licensesissued under article 8817
4309 N. Tenth. Suite S         expire on December:31st of each year. Id. 19. It is implicit in
t&Allen, TX. 7950%1885         article 8817 that registrationcertificatesalso expire ou December
512/@2-4547
                               31st of each year. Compare art. 8817. §9, and art. 8817, 016A.
                               Consequently,many :Lnitlallicensesand registrationcertificatesare
20 Maln Plaza, Suite 4Ml       valid for less thm a full year. You ask whether you may prorate the
San Antonio, TX. 79205.2797    fee for an initial Licenseor registrationcertificateo* a quarterly
5121225-419l                   basis. We couclud~! that you cannot prorate fees for such licensesand
                               registrationcertificates.
An Equal Opportunity/
Affirmative Action Employer        This office hm issued severalopinionsdealingwith prorationof
                               license fees. Thorn opinionshave reached differentconclusionsas to
                               the propriety of proration based on the language of the relevant
                               statutes.

                                    In a 1970 op~xlon this office consideredwhether the Texas State
                               Department of Bealth could prorate licensing fees under article
                               4477-6,V.T.C.S. AttorneyGeneral OpinionM-580 (1970). That statute
                               provided that such Iicensesmust be renewed each year by January 1st.
                               V.T.C.S. art. 4477-6. 013. The section of the statute that listed



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Mr. Jim Lusk - Page 2   (JM-3'39)




annual fees for licenses began with the following words: "The
following fees shall accospany each application.. . ." &I& 112.
This office concludedthat those words made clear that the department
had no authorityto prorate the annual fee for the initial license. A
1972 opinion relied on sim:.l.ar
                               language in the Texas StructuralPest
Control Act, article 135b-6, V.T.C.S., in concluding that the
StructuralPest Control Boatedcould not prorate the initial fee for a
licenseunder the act. AttfxmeyGeneral OpinionM-1107 (1972).

     In contrast,AttorneyI:eneral OpinionH-708 (1975) concludedthat
the fee provided for in the :iollowing
                                     statute could be prorated:

             The annual felrfor each auctioneer'slicense
          issued by the cormisslonerto a resident of this
          state is $100.      The annual fee for each
          auctioneer'slicenseissued by the coamissionerto
          a nonresident is $300. The commissioner shall
          issue the license,upon receipt of payment of all
          license fees. All licensesexpire annuallyon the
          last day of December of each year and shall be
          renewed upon the ,ceceipt
                                  of the written request of
          the licenseeand ,therequired licensefee. . . .

Acts 1975, 64th Leg., ch. 320,   54(a), at 828 (the 1975 version has
since been amended by Acts 1977, 65th Leg., ch. 314, at 842).
AttorneyGeneral Opinion H-708 distinguishedAttorneyGeneral Opinions
M-580 and M-1107 because th#rstatutesconsideredin those two opinions
containedlanguage requiringan initial applicationto be accompanied
by the specifiedfees, whereas the language in the statute considered
in Attorney General Opinian E-708 set an "annual fee" but did not
specifically require that the "annual fee" accompany an initial
application. Therefore, tke opinion concluded,the annual fee could
be prorated for a licenset'l;ltwould not be valid for a full year.

    The language used in article 8817 compels us to follow Attorney
GeneralOpinionsM-580 and Id-1107rather than AttorneyGeneral Opinion
H-708, the continuingvalidity of which we would question in any case.
As we pointed out prev1out;l.y.section 16 of article 8817 specifies
annual license fees, and contains the following provision regarding
applicationsfor licenses:

             The application must be accompanied by the
          annual license f:e in the form of a cashier's
          check or money order payable to the coamission.
          (Emphasisadded).

V.T.C.S. art. 8817, 513. Betcause article 8817 sets out annual license
fees in one section and 1x1another section requires that an initial
applicationfor a licensebe accompaniedby "the annual license fee,"
YOU nay not prorate the fee :Eoran initial license.




                              p. 1827
Mr. Jim Lusk - Page 3   (JM-399)




    Also, article 8817 mntains the following provision regarding
registrationfees:

            The fee for registrationof machines affected
         by this section L:s $50 for the business entity in
         which the owner'smachines are exhibited. The fee
         shall be paid to the cosmissionby cashier'scheck
         or money order.

V.T.C.S. art. 8817, §16A(L,).Here the statute simply sets a fee --
not an "annual" fee - for registrationand then requires that "the
fee" be paid to the cosneiss:Lon.This languagedoes not permit you to
prorate the initial fee for registration.

    Your second question is whether you may prorate the occupation
tax on coin-operatedmachines. V.T.C.S. art. 8802. Article 8802
provides:

             Every 'owner', save an owner holding an import
          license and holding coin-operatedmachines solely
          for re-sale, who owns, controls, possesses,
          exhibits,displa:rtr,or who permits to be exhibited
          or displayed lr. this State any 'coin-operated
          machine' shall pay, and there is hereby levied on
          each 'coin-operai:ed
                             machine',as definedherein in
          Article 13.01, except as are exempt herein, an
          annual occupationtax of $30.00, except that the
          annual tax on each coin-operatedmachine that is
          designed exclusively for showing motion pictures
          is $1,500.00. 'Ihe tax shall be paid to the
          commissionby caabier'scheck or money order.

     In 1941, this office consideredwhether the Comptrollerof Public
Accounts could make a rule permittingthe payment of occupationtaxes
on coin-operatedmachines on a quarterly basis. Attorney General
Opinion O-3009 (1941). This office concludedthat the comptrollerhad
no authorityto do so. The requestorhad suggestedthat the following
statutewould permit such ,arule:

          [T]he payment of the specific tax herein provided
          for, shall be required by the collectorof taxes
          to be made befor<,any person, firm, or association
          of persons shall be allowed to engage in any
          occupation requ::ringa license under the pro-
          visions of this <act,this payment to be made for a
          period not less_ than three months. (Emphasis
          added).

Acts 1879, 16th Leg., ch. 134, 08, at 149 (formerly codified as
article 7052, V.T.C.S.), :repealed
                                 by Acts 1981, 67th Leg;, ch. 389,



                               p. 1828
Mr.   Jim Lusk - Page 4 (JM-ZlS19)




639(b), at 1785. (Althoughthe repealerwas part of a recodification
that was not intended to mke any substantivechange in the law, Acts
1981, 67th Leg., ch. 389, §40, at 1787, the underlined language does
not appear in the Tax Code.) In dictum, this office said that the
underlinedlanguagemeant <hat payment of the occupationtax could be
made on a quarterly basi,s in the initial year of payment. -See
Attorney General Opinion O-,3009(1941).

     The comptrollerno lmger collects the occupationtax on coiu-
operated machines; the Texas Amusement Machine Cowmission does.
V.T.C.S. art. 8802. We find nothing comparableto the former article
7052~in the statutes goveming the Texas AmusementMachine Commission
or in the statutes governing the occupation tax on coin-operated
machines that would permit proration of the occupation tax in the
initialyear of payment.
                            SUMMARY

              The Texas AmusementMachine Commissionmay not
           prorate the fee for an initial license or
           registration cer,t:ificate.V.T.C.S. art. 8817.
           The Texas Amusement Machine Commission may not
           prorate the occupation tax on coin-operated
           machines.V.T.C.S. art. 8802.




                                     J-k
                                         Very truly your ,
                                               .


                                         JIM    MATTOX
                                         Attorney General of Texas

JACKHIGRTOWRR
First AssistantAttorneyGoueral

MARYKRLLKR
ExecutiveAssistantAttorneyGeneral

ROBRRT GRAY
SpecialAssistantAttorney General

RICK GILPIN
Chairman,Opinion Committee

Preparedby Sarah Woelk
AssistantAttorneyGeneral




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