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Issue Date: Vol. 51, No. 4, April 2011, Posted On: 3/25/2011

Oklahoma House Votes To Roll Back Vending Tax

Emily Jed
Charles Ortega (R-Altus), Oklahoma House Bill 1634, small business, Oklahoma vending machine tax, vending machine tax decals, vending, vending machine, vending machine operator, coin-op amusements, jukebox, jukebox tax, pinball machine, arcade game

OKLAHOMA CITY -- Oklahoma's operators scored a victory when the state House of Representatives overwhelmingly voted to roll back last year's 300% fee increase on vending and amusement machines.

In 2010, state lawmakers passed a bill that increased the cost of state's sales tax decal for vending and coin-op amusement equipment from $50 to $150. Instead of paying taxes on total sales volume generated by machines, vending and amusement operators purchase a decal for each machine they place for an annual flat rate. Fees for operators had not increased since 1988. | SEE STORY

The Oklahoma Vending Association has been working since the bill's passage to reduce the fee. In December, the association provided public comment to the Oklahoma Tax Commission and in January industry representatives attended a hearing as the commission revised its tax rules to conform to the provisions of the new law. | SEE STORY

"It has become clear that we have to reassess last year's policy decision to triple the fee on vending machine operators," said state Rep. Charles Ortega (R-Altus). "The fee increase was clearly excessive and now threatens to drive many operators out of business, which will ultimately reduce state tax collections. By voting to roll back the increase, lawmakers voted today to provide some support to small business owners across Oklahoma"

Ortega's bill (HB 1634), which passed unanimously on March 15, would reduce the fee from $150 to $75. The legislation now moves to the state Senate.

Tax officials estimated the tax increase would bring in about $6 million a year, compared with $3 million under the previous structure, which would help close the state's $1.2 billion budget shortfall.

The vending association and bottlers had estimated that the fee increase would forced operators to remove about 30% of the vending and amusement machines from the field, which, if accurate, could have yielded $6.5 million in losses to the state as a result of associated job reductions.

According to tax records, there are 54,323 vending machines across Oklahoma.

"The $150 fee was simply bad policy and I am pleased to see such broad support for rolling it back this year," Ortega said.

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