Overview
A tax is imposed on any person engaged in any business dealing with coin-operated amusement machines or engaged in business to own or operate coin-operated amusement machines exclusively on premises occupied by and in connection with the business.
Exemptions
Here is some good news. Section 2153.004 states that machines which are exempt from taxation include:
- Stamp vending machine
- Service coin-operated machine
Or if subject to an occupation or gross receipts tax, a:
- Gas meter
- Food vending machine
- Confection vending machine
- Beverage vending machine
- Merchandise vending machine
- Cigarette vending machine
Permit Requirements
All public establishments which have coin-operated machines on their premises must obtain a permit for each machine from the Harris County Tax Office every year.
Note: Each individual machine must have the permit affixed.
Costs and Fees
Some costs and fees to keep in mind:
- Registration certificate: $150
- Occupation tax permit: $60
- General business license:
- $200 for 50 or fewer machines
- $400 for 51-200 machines
- $500 for 201 or more machines
- Import license: $500
- Repair license: $50
Note: Machine owners can repair their own machines without obtaining a repair license.
Legal Assistance
Facing a sales tax audit in Texas?
Contact our attorney for a consultation.
Frequently Asked Questions
Who is required to pay the coin-operated amusement machine tax?
Any individual or business that owns or operates coin-operated amusement machines in connection with a business, or operates such machines exclusively on their own premises, must pay this tax.
Are all coin-operated machines subject to the tax?
No, certain machines are exempt. These include stamp vending machines, service coin-operated machines, and machines already subject to an occupation or gross receipts tax, such as gas meters and vending machines for food, beverages, cigarettes, and merchandise.
Do I need a separate permit for each machine?
Yes. Each coin-operated amusement machine must have its own annual permit issued by the Harris County Tax Office. The permit must be physically affixed to the individual machine.
How much does it cost to register and operate these machines?
Costs include a $150 registration certificate, $60 per occupation tax permit, and a general business license fee ranging from $200 to $500 depending on the number of machines. Additional licenses include $500 for importing and $50 for repairs (unless repairing your own machines).
What should I do if I’m facing a tax audit related to coin-operated machines?
You should contact a tax attorney for legal guidance. Professional legal assistance can help you understand your rights and obligations under Texas tax law.