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New York Trade Escapes 'Obesity' And 'Entertainment' Taxes; $1.50 Exemption Progresses

Posted On: 4/8/2009

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Vending, Vending Machine, Coin-Op, Tax, Jukebox, Amusements, Arcade, New York State Automatic Vending Association, Amusement and Music Owners Association of New York

ALBANY, NY -- Two distinct segments of New York's coin-op industry have escaped potentially harmful taxes. New York Gov. David Paterson said federal stimulus funds will close next year's $14 billion deficit, eliminating the need for a number of new taxes proposed in his budget. Among them were the much-debated 18% "obesity tax" on nondiet soft drinks, an "entertainment" tax on coin-operated amusement devices and a digital entertainment tax that posed a threat to jukebox operators.

While the elimination of the obesity tax is a huge victory for New York vendors, Paterson's proposed Bigger Better Bottle Bill is expected to pass. It would extend the state's current 5¢ a bottle deposit on soft drinks to noncarbonated beverages, costing vending operators an estimated $8,500 for $1 million in sales. (The estimation for the previous combined costs of the obesity tax and BBBB was $37,551 for every $1 million in sales.)

The New York State Automatic Vending Association's lobbyist has been meeting with lawmakers to seek their support of a bill that would raise the state's tax exemption for vended candy and soda from 75¢ to $1.50. The association estimates the higher exemption would save operators approximately $35,000 for every $1 million in sales.

NYSAVA president Mike Esposito of Prestige Services (Clifton Park, NY) told VT that a dozen assemblymen and six senators have already agreed to sponsor the bill. Lawmakers said the BBBB would most likely be taken off the 2009 budget and presented as standalone legislation likely to take effect in January 2010. Esposito anticipates the proposed bill to raise the vending exemption will be submitted to the legislature in late May or early June.

New York amusement operators escaped a broadly defined sales tax on entertainment activities and sporting events eliminated from the state's 2009 budget. The Amusement and Music Owners Association of New York lobbied against the so-called entertainment tax, which alarmed New York's operators because it could have been imposed on gross receipts generated by coin-operated amusement devices.

Additionally, the governor withdrew a proposed "iPod" tax on downloaded music and other "digitally delivered entertainment services." AMOA-NY said it was unclear whether the vaguely worded proposal would have taxed jukebox activity.