                                   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
