Play Meter

Issue: 1978 November 15 - Vol 4 Num 21

Meters
in Florida?
Florida operators are watching
their state legislature with a great deal
of apprehension these days because
of a proposed bill which was
uncovered by the investigative staff
of the Florida state association ,
F.A.M.A.
The proposed bill , which is still in
the drafting stages, would require
operators to put meters on all their
coin-operated equipment in the
state . But F.A.M .A. , with early news
about the proposed piece of
legislation , is already gearing up to
combat the proposal.
In a newsletter which went out to
member and non-member operators
alike , Ernestine Tolisano , F.A.M.A .'s
president , urged everyone to fight
the bill if and when it is proposed .
"Do not take the attitude that the
large operators or some of the other
operators will take care of the
problem," she wrote . "If we don't
unite to fight this legislation and raise
the necessary funds, nothing will get
done ."
Robert Rhinehart , Jr. , the execu-
tive director of the state association ,
said that news of the impending
piece of legislation "came back to
me. I learned that certain depart-
ments in the state was looking into
the possibility of requiring operators
to . put meters in coin-operated
machines ." He said that F.A.M.A.
initiated its own investigation and
found that , in fact , the matter was
being studied and a proposal being
drafted .
Rhinehart said that F.A.M.A.'s
action on this matter was about a
month premature , but that it was
necessary to start gearing up for this
legislative proposal because "if you
wait around for things to happen in
government , they can happen to you
very fast."
Rhinehart said that if the law were
enacted it would cost operators over
$2 million to buy the meters , install
them , and keep them in working
condition . He added that such a
regulation would require many
operators to hire a fulltime staff
member just to keep up with the
metering and reporting requirements
for the state.
To help fight this proposed bill,
F.A.M.A. members and non-mem-
bers alike are being asked to donate
$100 to the legislative fund , which is
used to fight adverse legislation .
PLAY METER, N ovember, 1978
Operator sues for damages
following confiscation
B.K . Raybourn of B&K Music and
Amusement in Piqua , Ohio has filed
a $581 ,506 suit which charges that a
pinball machine which was confis-
cated from one of his locations was
never returned .
The suit , filed in Miami County
Common Pleas Court claimed that
county law enforcement officers and
prosecutors never returned the
pinball machine and the money
taken in August , 1976.
In his legal brief, Raybourn notes
that he has been deprived of the use
of his equipment and already has
suffered a substantial loss of income
due to the illegal seizure .
Tax Clinic:
Children on the payroll
QUESTION : What are the tax
effects of placing children on the
payroll?
ANSWER : Payments to children
and relatives in general are de-
ductible as compensation only for
services actually rendered , either in
connection with a trade or business ,
or in the production and generation
of income .
These transactions involve related
parties, and are generally not
considered to be made at arm's
length . The Internal Revenue Service
and the courts will closely scrutinize
these payments to ensure that they
are made in connection with actual
services rendered , and that the
remuneration is reasonable in
relation to the services . Due to the
nature of these transactions , docu-
mentary evidence of the amounts
paid should be carefully maintained
to satisfy the strict scrutiny that these
relationships are subjected to.
In determining whether these
payments are for services actually
rendered , the courts examine the
circumstances to decide whether a
bona fide employment relationship
existed , or whether the payments are
being made strictly for family
purposes . The Internal Revenue
Service also scrutinizes the situation
where payment for services rendered
to a child are deposited in joint bank
accounts between the parent and the
child to determine if the payments
actually benefited the child/ em-
ployee . The amount of the compen-
sation paid to a child also must be
reasonable in relation to the work
performed since unreasonable com-
pensation will be disallowed as a
deduction to the employer .
Reasonable wages paid by a
parent to an unemancipated minor
child, under 21 years of age , made
for personal services rendered as a
bona fide employee , are deductible
by the parent, as an expense . The
income of that child is included in his
or her own gross income , and not in
the gtoss income of the parent .
Payments made to the child for
services normally expected to be
rendered by them as household
members , such as cleaning , mowing
the lawn , etc ., are personal
expenses , non-deductible by the
parent.
In the event you are a sole
proprietorship , employment of your
child will benefit both of you since
wages paid to your child who is
under 21 years of age , are not
subject to Social Security Tax or
Federal Unemployment Tax. Your
child will save payment of 5 .85
percent of his or her wages and you
will save the payment of a like
amount in addition to the Federal
Unemployment Taxes.
The Internal Revenue Code
clearly allows and encourages the
employment of children , providing a
bona fide employment relationship
exists, and wages paid are reason-
able in light of the services actually
performed .
-By Comprehensive Accounting
Corp. of Aurora , Illinois . Compre-
hensive provides a bookkeeping,
accounting, and tax service to over
14,000 business clients each month
through a nationwide network of
more than 140 franchised offices.
9
The tax revolt's 'Paul Revere'
featured at NAMA convention
Howard A. Jarvis , provocative
author and sponsor of California's
tax referendum , was keynoter at the
opening session of the 1978
Convention-Exhibit of Vending and
Foodservice Management , October 5
through 8 at Atlanta 's Georgia World
Congress Center.
• With a record 190 exhibitors
showing the newest versions of
vending machines , food service prod-
ucts , equipment and services needed
by industry companies , the sponsor-
ing National Automatic Merchan -
dising Association (N . A. M. A. )
held its national convention in
Atlanta for the first time .
More than 6 ,500 convention
visitors attended the four-day affair .
Program topics also included a
review and forecast of economic
trends by Leo Cherne , executive
director of the Research Institute of
America , New York City; a
discussion of plans for a new dollar
coin by U. S . Bureau of the Mint
Director Stella Hackel ; a keynote
address by association chairman Dick
Estey of Portland , Oregon , and
numerous discussions of industry-
related topics presented by panels of
experts or treated in group discus-
sions .
J. Gordon Scott III , Scott Vending
Company , Forest City , North
Carolina , was general chairman of
the convention ; and William Finn ,
Trico Vendors , Easthampton , Mass-
ach usetts , was program chairman,
assisted by Richard Ball , Wes-Tex
Vendor initiates
foosball 'mini-tour'
Mitchell Games Machines of
Mitchell , South Dakota-a vending
route owned and operated by Adrian
Hoines , ElRoy Gruenwald , and
David Backlund-is initiating a new
concept of foosball play for its South
Dakota players . That concept is a
tournament mini-tour .
M. G . M. has always been a
pioneer in South Dakota foosball
promotion and had a loyal body of
players , but this is the first year that
an organized and well-advertised
$1 ,000 mini-tour will be run .
The success of the tour depends
on player response (which has
always been good) and location
cooperation . M. G . M. has been
able to use not only its primary
locations but has even been asked to
install foosball tables in new
locations because of the expanded
business foosball promotion brings.
[n these new locations where just
foosball tables were set in , says
Hoines , owners are seeing their
profits double and triple because of
increased patronage .
According to Hoines, there are
many advantages to running a
mini-tour. First , as has been
mentioned , foosball play can double ,
triple , or even quadruple . Increased
play, Hoines reports , leads to a
desire for tables at home , and this
10
becomes an outlet for old coin-op
tables , thus allowing the operator to
buy new models .
This increased demand for home
tables , he points out , allows for the
operator less depreciation expense
since the selling price for the home
model should remain as high as the
purchase price for a new coin-op .
From the interest generated by
mini-tours , M. G . M. plans to take
an additional step and develop
foosball leagues , run by the players
and locations . This will give
operators a steady , weekly foosball
income .
Most players are excited by the
prospect of leagues , Hoines pOints
out , but they should not be
attempted before a large core of
players is developed from tourna-
ment promotion . M. G . M. believes
that December is a ripe time to begin
leagues after the mini-tour program
has begun , and players are becoming
more involved with the sport.
A mini-tour involves a series of
small tournaments in various loca-
tions for $50 to $500 scheduled on
the same poster for advance
advertisements . Operators interested
in developing a mini-tour can contact
Adrian Hoines , Premier Soccer,
Rural Route 114 , Mitchell , South
Dakota 57301.
Vending , Mineral Wells . Texas , and
Bennet Taylor , Rochester Coca-Cola
Bottling Company , Rochester , New
York . Mrs . William H . Martin ,
Columbus , Georgia , was in charge of
ladies' program activities.
Entertainment highlights included
a reception sponsored by vending
machine manufacturers on October 6
and the annual N. A. M. A. ban -
quet on October 7 with the Peter
Duchin Orchestra and Singer Helen
Forrest entertaining .
"[t Only LOOKS Automatic ," a
new audio-visual story produced by
N. A. M. A . which gives a look
behind the operations of vending and
foodservice management firms , was
shown for the first time October 6 . [t
is available
for
purchase to
N. A. M. A . members and others,
N. A. M. A.
President G .
R.
Schreiber said .
The Friday program also offered
thirty different round-table discus-
sions on such diverse topics as
computer applications , foodservice
trends , cigarette vending and em-
ployee training .
Other Friday subjects included a
discussion on acquisitions and
mergers , employee incentive pro-
grams , and the keynote address by
Ms. Hackel on coinage .
On Saturday concurrent sessions
dealt with trends in cigarette vending
and maintaining a company's non-
union status . Newly appointed
N. A. M. A .
labor counsel P .
Kevin Connelly led the discussion .
General sessions on Saturday
covered parts inventory control
systems , a panel discussion on
innovative foodservice management
methods and the economic trends
review by Cherne.
The Sunday morning concluding
sessions covered management of
cash flow and getting maximum
results from the use of computers .
All meetings were held at the
Georgia World Congress Center .
The special programs for ladies
featured tours of historical areas , a
seminar on financial and estate
planning , and several luncheons .
Sponsors of the ladies ' programs
were The Vendo Company , National
Vendors , R. J . Reynolds Tobacco
Company , and Rock-Ola Manu-
facturing Company .
The convention banquet enter-
tainment was sponsored , as in
previous years , by Philip Morris
U. S. A .
PLAY METER, November, 197 8

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