Houston, TX Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Tax rate
- 1/4 of state occupation tax
- Governing law
- Code of Ordinances Ch. 44, Art. II
- Nonpayment penalty
- $100 forfeiture plus machine sealing
- Exempt machines
- Service, merchandise, and children's machines
- Enforcing office
- Administration and Regulatory Affairs director
Summary
Houston imposes no general local business license tax; the only citywide occupation tax under Chapter 44 is on coin-operated machines, set at one-fourth of the state occupation tax rate and collected through mandatory annual registration.
Every owner who exhibits or displays, or who permits to be exhibited or displayed in the city any coin-operated machine shall pay, and there is hereby levied on each coin-operated machine, except those that are exempt under section 44-89 of this Code, an annual occupation tax in the amount equal to one-fourth of the current state occupation tax. All occupation taxes for coin-operated machines are payable annually in advance. Upon payment of the tax every owner shall register each machine by make, model, serial number, and street address location with the director.
Full Breakdown
Chapter 44, Article II is Houston's only specific occupation tax: coin-operated machines such as arcade games, vending machines and jukeboxes. Sec. 44-83 requires every owner to register each machine with the director of Administration and Regulatory Affairs and pay an annual tax equal to one-fourth of the state occupation tax, prorated quarterly for machines placed in service midyear. A paid decal must be affixed (Sec. 44-85); unregistered machines can be sealed by the director or police (Sec. 44-86). Service, merchandise and children's machines are exempt (Sec. 44-90). No other business category carries a comparable citywide occupation tax.
Violations & Fines
Operating an unregistered or undecaled coin-operated machine is unlawful; the machine can be sealed and the owner forfeits a $100 penalty per Sec. 44-85(e), recoverable by the city attorney in court.
Frequently Asked Questions
Does Houston have a general business license tax?
How much is the coin-operated machine tax?
What happens if a machine isn't registered?
Sources & Official References
Other rules in Houston
Texas rules heatmap·Compare Houston to another location·View the Texas local taxes & fees overview
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