Automatic Age

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HUTOmHTIC
VOL. 18 - No. 11
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AUTOMATIC AGE, $1.00 per year. Published monthly by Autqpjati Age, Ine/^16-18 El
IllXunder thfe^Ag
second class matter August 10, 1926, at the Post Office at Chi
SOME LETTERS AND THOUGHTS
ABOUT FEDERAL TAX ON PRIZE
BALL GUM MACHINES, ETC.
Here’s a running record of
what has been taking place in
the matter of Federal Tax on
various types of coin operated
machines. This account is pub­
lished to inform Automatic Age
readers. It isn’t a bright outlook,
and under the stress of the war
economy there isn’t much that
can be done to correct or alter
the situation. There’s been so
much muddling that any con­
structive effort would die before
birth.
A letter from an operator fol­
lows:
“The present law that is in
effect governing the operation of
ball gum machines I consider
very unjust as the returns from
the machines won’t even pay the
tax say nothing relative the in­
vestment, price of gum, and a
fair return for taking care of the
machines.
“I have never abused these
machines by having an inscrip­
tion on them giving any infor­
mation relative to prize balls
and I consider no game of chance
as they get a ball of gum or a
bar of candy for each cent, and
it is a stimulator to get business
for the store.”
The fellow who wrote the
above is a sensible operator. He’s
been a good cooperator, and has
given much of his time to get
consideration for equitable relief
and proper understanding of the
function and place of the prize
ball gum vending machine.
Next, is a letter from a U. S.
Senator, which sheds significant
light on the state of affairs:
“When Congress passed this
Act, I do not believe that they
meant to include the operators
of the gum vending machines.
However, the Act is so construed
that they do come under its con­
trol so the Bureau of Internal
Revenue must enforce it.
“You state that for every
tenth ball of gum, the player re­
ceives a nickel bar of candy;
that the player is receiving full
value for every penny invested.
However, the Bureau of Inter­
nal Revenue has construed this
awarding of the bar of candy on
every tenth ball to be a prize;
© International Arcade Museum
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pe.. Chicago. Entered as
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therefor the element of chance
is pres t in the operation of
machine, and it is subject
to the tax.
“The Bureau of Internal
Revenue has given all operators
of these machines an opportu­
nity to avoid the tax- This may
be done by discontinuing the giv­
ing of prizes and by specifying
on the machine that no prize will
be given. There is no tax on a
bona fide vending machine, and
by discontinuing the giving of
prizes I assume that your ma­
chine will then become a bona
fide gum vending machine.”
Another Senator looks into
the situation, and from his letter
it is noted that the need for
revenue is the prime factor:
“The tax bill has not yet come
to the Senate, as the House Com­
mittee on Ways and Means is
still considering it, and I do not
know what the details will be.
Owing to the t r e m e n d o u s
amounts of many that must be
raised to fight this war every
possible source of revenue will
be taxed to the limit, and I do
not know what can be done in
your case. I realize this is a very
heavy tax and I shall be glad to
present your views to the Senate
Committee on Finance as soon as
the bill reaches the Senate.”
Automatic Age sums up the
situation as follows: Congress is
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