'llvorllhie Arkllnslls License Lllw
Witllstllntls Test of Time
The state license law of Arkansas be·
longs high . on the list for its position
amonl!: the states alphabetically. Then, it is
one of the first general licensing statutes
and has also been referred to often for its
generally low rates. It is the low rates
that make it useful for reference, because
practically every state proposal that has
come up in recent years has contained high.
er tax rates than the Arkansas law.
The statute has many points on which
it can be criticised and one of the chief
objections which comes from the vending
machine trade is that it sets fees on each
vending machine, small fees in most cases,
instead of licensing the operator as a busi·
ness proprietor similar to other business
license statutes of the state. In the text of
the law there are 12 separate classifications
with fees on each "type of machine rangin~
from $1 to $5, and at least eight of them
. are vending and service machines.
The statute specifies penny scales, gum,
peanut, stamp, cigar and cigarette vendors
for a definite license fee each year and
then has one 'of those broad clauses~"all
other coin·operated vendors." Music rna·
chines are listed by name, and then a
general clause which covers "all other
coin· operated devices."
When operators prepare to fight un·
favorable legislation in other states, they
can refer to the Arkansas law for its very
!ow rates, and then it would be a good
Idea to suggest business licenses for opera·
tors of the many types of small vendors as
much more economical to collect than small
fees on each machine.
The present statute in this southern
state is an amended version, approved
March 9, 1939, of the original law passed
by the General Assembly of 1933. This
shows that coin machine legislation began
very early in the modern period of trade
history, that state license laws are now not
so very new. The date 1933 would also
suggest that the law was passed at a time
following the Depression, when states and
cities all over the nation were looking for
new sources of revenue. In fact, a few
more states looked around at about the
same time and discovered coin machines
for taxation.
The Arkansas law must also be classed
as a p~rt of the mo.vement to set up busi·
ness lIcense laws In various states and
especially among southern states. The'meas.
ures are regulatory and then the licenses
provide revenue. The coin machine trade
can feel that it has not been singled out for
special taxation, but that the idea came
in the regular course of taxing all kinds
of busi·"ss. In those states having a system
of business or privilege licenses, every ses·
sian of the legislature is marked by a
check to see what new business enterprises
are spreading in the state, and should be
included under the license laws. In such
situations, it would not be possible for the
coin machine trade to attain much size
and escape a license.
Legislative trends in 1945 and 1947 in-
dicated that the move to pass state license
laws on businesses had not gained much
momentum in comparison with the much
bigger trend to pass various forms of sales
and gross receipts taxes. Unless trends shift
considerably, the threat to tax vending
machines especially in 1949 will come as a
part of proposals to tax sales of candy, soft
drinks, cigarettes, etc. In the many state
legislatures in 1947 that considered cigar·
ette sales taxes, it was very easy to insert
some special fee for cigarette vendors in
such proposals.
That Arkansas is likely to keep its gen·
eral policy of licensing businesses is sug·
gested by revenue received in the fiscal
year 1946, which amounted to $6,440,000
from all types of privilege licenses. Coin
machine revenue was only a small part of
this, but helped to swell the annual total.
The state collected nearly 40 million dollars
from sales and gross receipts taxes, making
a revenue gain in this field of nearly 35
per cent as compared with the previous
year. This immense gain in sales tax rev·
enue, if it continues for a few years and in
many states, may be the best protection
the coin machine industry will have against
fees placed on machines. It may be the
main reason why so few coin machine taxes
were passed in the big wave of legislation
in 1947.
The reason given by Arkansas officials
for the big 1946 gain in sales tax revenues
is the gain in consumer sales, which actu·
ally means the big dollar sales due to
postwar high prices. These immense sales
and gross receipts revenues in many states
,,:ill furnish the coin machine trade, espe-
CIally the vending machine trade, with its
best argument for dropping taxes on rna·
chines.
License and privilege revenue in Arkan·
sas gained over 16 per cent iQ 1946 as
compared with 1945, but in many months
the revenue from coin machines was show·
SELLING OUT
ARCADE EQUIPMENT
NAME YOUR PRICE-NO REASONABLE OFFER REFUSED
5-BALLY RAPID FIRES
l-EVANS TEN STRIKE, L.D.
l-BALLY SKY BATTLE
l-MUTOSCOPE SKY
l-CHI COIN HOCKEY
FIGHTER
Good clean c;ondition-ready for location.
NOBRO NOVEL TV CO.
369 Ellis Street
A UGUST, 7948
San Francisco 2, Calif.
Phone TUxedo 5-4976
ing declines. This revenue source showed
a gain of only 3 per cent from 1944 to
1945.
Arkansas has the various types of taxes
now common in most states, including sales
and gross receipts, liquor tax, tobacco, pari·
mutuels, amusements, occupational, chain
store, individual income, and so on.
The state passes on a good share of
revenue collected to local governments and
in some cases this helps to prevent city
and county taxation on coin machines. The
state law on coin machines, however, spe·
cifically provides that any city may tax
amusement machines and vendors, but lim-
its such local tax rates to not more than
the state tax.
This may be considered as a good protec-
tive measure, for some states that tax coin
machines do not set a limit to local fees
and in some cases a local tax has been
passed which is much higher than the
state rate. This is an important point to
watch in other states, when new tax pro·
posals come up.
The history of the Arkansas law proves
the well·known fact that once a tax gets
on the books, there will be repeated at-
tern pts to increase the rate. This is espe·
. cially true in the postwar period, when the
trend in state and city taxes is upward.
The Arkansas law has worked well and
by comparison with some other state laws,
it must be classed as favorable by the trade.
Considering the fortunes of amusement
games in the neighboring state of Okla·
homa, the Arkansas law no doubt has been
a stabilizing influence for games operation
in the state. But all these favorable facts
still do not prevent efforts to increase the
tax rates. Maybe there is a temptation in
the fact that such close states as Texas
and Tennessee have much higher rates.
Strong moves to I;,aise the license fees
COLUMBIA
TWIN JACKPOT
Fruit or cigarette mach ine. Gold
Award or Jackpot Mode l. Si18 :
Height. IS ¥. in. ; Width . 12112 in.;
Depth. 12 in.; Weight. 43 Ibs.
WRITE FOR PR ICES
CROETCHEN
TOOL & MFG. COMPANY
126 N. Union Ave •• Chicago 6, III.
11