Machine revenue share contracts can sound simple: one business supplies equipment, another provides the location, and receipts are divided. In Texas, the wording deserves closer attention. Occupations Code Chapter 2153 contains provisions on contract information, tax reimbursement and limits on compensation to a machine's bailee or lessee.
A headline percentage therefore does not describe the entire arrangement. This guide explains the cited provisions and offers questions for reviewing a proposed agreement. It does not determine the enforceability of a particular contract or the legality of the machine.
Begin with the parties and the equipment
Identify the owner, license holder, operator and location business. Record the equipment covered by the agreement and which entity receives each payment. Words such as “partner” or “location share” may be commercially convenient, but the contract needs enough detail to determine the actual roles.
Section 2153.204 says a written contract between an owner holding a license under the chapter and an operator in Texas must state the Comptroller's name, mailing address and telephone number. This is a specific statutory requirement, distinct from the additional business questions in this article.
Separate current-year reimbursement from next-year reimbursement
Section 2153.205(a) says the first money earned from exhibiting a coin-operated amusement machine may reimburse the owner for the current year's state machine tax and authorized county or municipal tax. Subsection (b) addresses a different obligation: a portion of each year's earnings must reimburse the owner for the following year's state machine tax and other taxes or fees imposed on exhibiting the machine.
The distinction matters. Subsection (a) uses permissive language for the listed current-year taxes. Subsection (b) requires reimbursement for the next year's payment. A contract summary that collapses these into an unspecified deduction may make it difficult to see which payment is being collected and why.
Request a clear explanation of the amounts, period and accounting treatment. Have the arrangement checked against the full statutory text rather than deciding that any reserve bearing a tax-related label satisfies the rule.
Understand what the compensation limit measures
Under section 2153.205(c), an owner may not waive the reimbursement required by subsection (b). Nor may the owner agree to compensate a bailee or lessee above 50 percent of gross receipts earned from the machine after that reimbursement.
The Comptroller's FAQ summarizes the gross-receipts limit. For contract drafting, the statute's wording about the subsection (b) reimbursement is essential. Do not translate the rule into an unrestricted agreement to divide “net profit” in any proportion the parties prefer.
The statute also specifies license revocation for a license holder who violates section 2153.205. That consequence is another reason to resolve the legal treatment of the actual arrangement before treating a salesperson's proposed percentage as sufficient.
Make the settlement statement understandable
The following are editorial accounting questions, not additional requirements we claim the statute imposes. Which machine records establish receipts? Who can inspect them? How are refunds, corrections and disputed entries documented? What period does each settlement cover?
List taxes and reimbursements clearly, and identify any separate maintenance or service charge. Ask the counterparty to demonstrate how a settlement can be traced back to the equipment records. If two people cannot independently reproduce the same calculation, the agreement or reporting process needs clarification.
A useful proposed statement identifies the machine and location, opening and closing records, documented adjustments, specified reimbursements and each party's payment. Avoid invented revenue forecasts when evaluating that format; the purpose is to test whether actual transactions will be auditable.
Plan for changes, disputes and removal
Agree how the parties will handle disputed records, equipment failure, software changes, a required suspension and termination. Clarify ownership of the equipment and records, access during a dispute and responsibilities for removal. These provisions need review in the context of the actual transaction.
Keep administrative records current as locations change. The Comptroller's forms list includes AP-142 for machine-location amendments; consult its current instructions for the situation at hand.
The vendor diligence checklist helps identify the parties and equipment before contracting. The permit guide explains the separate business and machine charges that can otherwise become confused in a settlement discussion.
Sources checked September 9, 2026. Produced with AI assistance and checked against the cited materials. This is editorial information, not a legal opinion on a particular machine or business.