Alabama Lawmakers Consider Coin-Op Amusement Machine Tax

MONTGOMERY, AL -- A bill working its way through the Alabama Legislature would require operators of coin-operated amusement devices to pay equipment-licensing fees. Introduced in the Alabama State House by Rep. David Faulkner (R-Mountain Brook), the Amusement-Entertainment Machine Tax Act (HB595) seeks to raise an estimated $1 million a year for the state's coffers.

The proposed licensing fee would be based on the number of machines operating in locations. For instance, five or fewer machines would cost $500 a year to license, six-50 units would cost $1,500, 51-100 jumps to $3,000 and 100 or more machines would incur a $5,000 tariff. Verification of proper licensing would be accomplished by using stickers attached to each machine and random inspections by state officials.

"It's a lot easier to issue licenses than to deal with coins that can't easily be counted," Faulkner said.

Alabama is facing a $260 million budget shortfall, and the amusement machine tax is intended to help alleviate it, along with measures to legalize gambling. A bill seeking to authorize a state lottery and Las Vegas-style casinos at four existing state dog tracks in Birmingham, Mobile and Macon and Greene counties was recently approved by the Tourism and Marketing Committee in the state Senate. Alabama voters last rejected the idea of a state lottery in 1999.

Meanwhile, the Amusement-Entertainment Machine Tax Act lists specific machine types for taxation. It also makes clear that amusement machines activated by bills, credit cards, tokens, tickets and payment media are subject to fees, along with jukeboxes. The bill excludes coin-operated vending machines that dispense products, including bulk venders. If the bill succeeds, a licensing fee could go into effect on Jan. 1, 2016. Taxable equipment types named in the bill are:

Pinball machines
Console machines
Videogames
Crane machines
Claw machines
Pusher machines
Bowling machines
Novelty arcade games
Foosball or table soccer machines
Miniature racetrack, football or golf machines
Target or shooting gallery machines
Basketball machines
Shuffleboard games
Kiddie ride games
Skeeball machines
Air hockey machines
Rolldown machines
Trivia machines
Laser games
Simulator games
Virtual reality machines
Maze games
Racing games
Coin-operated pool tables or coin-operated billiard tables