Mechanical amusement devices to be taxed

Operators of mechanical amusement devices will face an additional tax under a bill passed by the Legislature May 21.

LB70, introduced by Columbus Sen. Paul Schumacher, imposes the tax—10 percent of the gross revenue derived from the operation of the device—on any business operating such a device.

Mechanical amusement device, as defined in state statute, includes any machine in which a person plays a game by inserting some form of currency, a prize is paid and the results are determined by chance.

The bill applies to mechanical amusement devices that:
• accept currency, coins, tokens or other value in exchange for play;
• award a monetary prize or anything redeemable for a monetary prize;
• are played by a player using a touch screen, computer mouse, touch pad, light pen, laser or device of similar function by which the player competes against software running the device; and
• have not been adjudicated by a court of competent jurisdiction within the state of Nebraska to not constitute a gambling device.

Included are game and draw lotteries and coin-operated automatic musical devices. The bill does not apply to vending machines or pickle card dispensing machines.

Any operator of a mechanical amusement device can apply for an exemption from the tax. To receive the exemption, an operator will be required to apply to the tax commissioner for a determination that the device does not constitute illegal gaming.

Senators passed the bill on a 35-11 vote.