TAX DATA
Coast Associations Aid Government
In Collecting New Federal Use Tax
LOS ANGELES-The Associated Op·
erators of Los Angeles County, comprising
the amusement machine operators in the
most densely populated county in the state,
and the Amusement Merchants' Associa-
tion, Inc., composed of operators of like
devices in the San Francisco Bay Area, are
working with the Bureau of Interna~ Rev·
enue in compiling lists of operators In the
state of California and preventing delin·
quency penalties being assessed upon these
operators.
Sid Mackin, managing director of the
northern group, summarized their activity
to date by stating: "Immediately follow·
ing the final passage of the tax bill, we
were called upon by District No. 1 of the
Bureau of Internal Revenue to work in
conjunction with them in setting up the
necessary basic records for collection of
the tax in the 48 counties of Northern
California making up this particular dis·
trict of the Bureau. Needless to say, we
believe the occasion of the federal tax,
aside from an opportunity to demonstrate
the willingness of the members of this in·
dustry to do their share willingly and
gladly toward defraying the cost of the
national defense program, is one of the
grandest opportunities possible for the in·
dustry to solidify and stabilize itself.
"Fortunately, due to the extensive reo
search and business and industrial surveys
that we have carried on over the past year,
we have been in a position of responding
and cooperating with the Bureau imme·
diately. Of course, the machinery for this
tax purpose being entirely new, the very
nature of the busi'ness in California
creates many complications and ramifica·
tions, all of which we have been able to
deal with quite successfully to date. Upon
the many rulings yet to come from the
Commissioner of Internal Revenue at
Washington, D. c., will depend the ulti·
mate effect. At any rate, it is pleasing to
note that the large majority of regular op·
erators in this area have responded beau·
tifully in cooperating with this association,
thereby enabling us to obtain a very fav-
orable reaction towards the industry as a
whole.
"The program we have entered into to
develop as nearly as possible 100 per cent
the information required to make this tax
collection machinery function smoothly i~
basically simple. Through the cooperation
of the jobbers in the area, we were imme·
diately able to circularize every member of
the industry in Northern California; sec·
ond, a general informative bulletin on the
subject has been issued also to all op-
erators in Northern California. The next
step, which will be taken immediately
upon official i'nformation being received
from Washington, will be to have a North·
ern California general meeting in San Fran·
cisco at which time we will have a repre·
sentative of the Bureau present to outline
the tax procedure. Following this general
meeting we plan a series of regional
meetings in the various regional centers
throughout the 48 counties in Northern
California. A this plan progresses, of
course, there will be many educational and
informative bulletins issued in order to
keep everyone properly posted and to keep
confusion, misunderstanding and misinfor·
mation at a minimum."
In Southern California "Curley" Robin·
son, managing director of the Associated
Operators of Los Angeles County has fol·
lowed a like program and assisted the Bu·
reau, whose district comprises the 10
Southern Counties, prepare a list of all op·
erators in the South. Bulletins have like·
wise been mailed informing all operators
of the tax and the information now avail·
ahl~
•
THE TAX BILL
P ART IX
COIN OPE R ATED AMUSEM ENT &
GAMI NG
D EVICES,
SECTION
3 2 67, T AX O N COIN OPE R AT E D
AMUSEMENT &
GAMING D E -
VICES.
A-Rate every person who maintains for
use or permits the use of, on any place
or premise occupied by him, a coin op·
erated amusement or gaming device shall
pay a special tax as follows:
(l) 10,00 per year in the case of a de·
vice defined in clause (l) of subsec·
tion (b).
(2) $50.00 per year in the case of a de·
vice defined in clause (2) of subsec·
tion (b), and
(3) $10.00 or $50.00 as the case may
be, for each additional device so
maintained or the use of which is
so permitted. If one such device is
replaced by another, such other de·
vice shall not be considered an addi·
tional device.
B- D efin i tion -as used in this part, the
term coin·operated amusement and gam·
ing devices means:
(l) So·called pinball and other similar
amusement machines, operated by
means of the insertion of a coin,
token or object, and
(2) So·called slot machines which op·
erate by means of insertion of a coin,
token, or similar object and which,
by application of the element of
chance, may deliver, or entitle the
person playing or operating the mao
chine to receive cash, premiums,
merchandise, or tokens. The term
does not include bona fide vending
machines in which are not incorpor·
ated gaming or amusement features.
C-Ap p licab ility of Admin istrative
P r ovisions-An operator of a place or
premises who maintains for use or per·
mits the use of any coin·operated device
shall be considered, for the purpose of
sub·chapter (B) to be engaged in a trade
or business in respect of each such
device.
D-E ffective Da te of Tax-With respect
to . the year ending June 30, 1942, no tax
shall be payable under this part for any
period prior to October 1, 1941.
E -P e n a lty-5 per cent for 30 days or
fraction of delinquency up to 25 per
cent.
Commissioner of Internal Revenue,
Washington, D. C.
*
*
*
Mrs. Scarponi (standing in swimming
pool up to her neck) : "My goodness, Tony,
where'sa da baby?"
Mr. Scarponi (beside her}: "He's all
right. I gotta him by da hand."
V The Federal Tax is on locations.
V Effective date of Tax is October 1.
1941.
V Final payment date of Tax is not
y et ascertained. (Sufficient time will be
allowed for proper filing).
'
V Penalty after Tax deadline is estab-
lished will be 5'10 for 30 days or fraction
of delinque ncy up to 25 '10'
V Tax will be in the form of a revenue
stamp to be posted in each location.
The number of machines being operate d
will gov ern the number of s tamps re-
quired for each location.
V Tax year will run from June 30th to
June 30th .
V First Tax will be paid for period be-
ginning October 1. 194 1 to June 30th.
1942.
V Tax declaration forms will be avail-
able from division offices of the Bureau
of Internal Revenue.
V Many types of equipment will re-
quire special rulings. All rulings must
come from the Tax Commissioner's Of-
fice, Washington. D. C.
V The Federal Tax is purely a "Tax"
and is not a license or permit. and in no
way whatso e ver does it change the
pre sent status of gambling laws in the
various s tates.
TAX AMOUNTS
$10.00 per year for marble games and
similar amusement devices. 10'10 of the
manufacturer's cost on phonographs.
Wall and bar boxes are exempt on
firs t rulings of the Bureau of Internal
Re venue.
$50.00 per year fo r gambling devices
s uch as slot machines and consoles.
8% of the regular wholesale price of
phonograph records.
2c per thousand on matches.
EXEMPTIONS
Bona fid e vending machines d ispens-
ing m e rchandise such as candy. g um.
cigarettes. peanuts and the like. a n d
which do not have gaming features in-
corporate d, are e xempt from t axation.
Other. specific exemptions include:
Electric e y e targets.
Air rifles.
G rips.
G eneral Arcade Equipment.
Baseball. football. basketball.
Fortune -telling devices.
Coin-operated movie boxes.
Scales.
Wall boxes.
Phonographs.
If only entertainment is coin-operate d
phonograph and space is p rovided
where patrons may dance the 5'10 cab-
aret tax does not apply.
IMPORT ANT NOTICE
This tax data has b een assembled
from reliable sources and is correct as
of October 10 - the date on which this
page was prepared for publication.
However. important changes were made
three different times while this material
was being set in type and new and va-
ried interpretations are possible still as
the Bureau of Internal Revenue studies
the field more closely. Write or 'phone
THE REVIEW for latest rulings.
•
COIN
MACHINE
REVIEW
9
FOR
OCTOBER
1941