Play Meter

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.
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