Does a mechanical amusement device with multiple playing stations need a separate tax decal for each station?

Plain-English summary

Nebraska imposes an occupation tax on mechanical amusement devices under the Mechanical Amusement Device Act (Neb. Rev. Stat. §§ 77-3001 to 77-3011). Payment is shown by a decal -- a stamp issued by the Department -- affixed to the device. This ruling (which supersedes Revenue Ruling 54-90-1) answers how the tax applies to a single machine that has more than one playing station.

The answer: one decal per playing station. A decal is required for each mechanical amusement device, and when a device has multiple playing stations, each playing station operates as a separate device for which the occupation tax must be paid -- so a decal is required for each station even when they are part of the same machine.

Key definitions.

• Decal -- the stamp issued by the Department denoting payment of the mechanical amusement device occupation tax.
• Mechanical amusement device -- a machine that, on inserting a coin or coin substitute, operates or is used for a game, contest, or amusement. It does not include vending machines dispensing property, devices in private homes for private use, pickle card dispensing devices, devices built so their operation would be illegal in Nebraska, or devices operated on an hourly fee basis.
• Playing station -- the device, or the portion of a device, that lets a player operate the machine independently of, or simultaneously with, another player. The number of playing stations may differ from the number of screens or coin slots.

The one exception. Multiple decals are not required where multiple players must use the same playing station sequentially (one after another) -- that is a single station.

What this means for you

Operators and distributors of amusement devices

Count playing stations, not machines, when buying decals. A multi-station machine (for example, a shared cabinet that lets two people play independently or at the same time) needs a decal for each station. Don't assume one cabinet equals one decal, and note that the station count can differ from the number of screens or coin slots. If players simply take turns at one station, that is a single station needing one decal.

Businesses that host leased machines

The operator or distributor that leases or rents the device to you is responsible for purchasing and affixing the decals. Confirm each playing station on a shared machine is decaled.

Common questions

Q: How many decals does a two-station machine need?
A: Two -- one for each playing station, even though the stations are part of the same machine.

Q: What is a "playing station"?
A: The device, or a portion of it, that lets a player operate the machine independently of, or simultaneously with, another player. The number of stations may differ from the number of screens or coin slots.

Q: Do sequential-use machines need multiple decals?
A: No. If multiple players must use the same station one after another, it is a single playing station requiring one decal.

Q: Does this replace an earlier ruling?
A: Yes. Revenue Ruling 54-08-1 supersedes Revenue Ruling 54-90-1.

Citations and references

• Neb. Rev. Stat. §§ 77-3001 to 77-3011 (Mechanical Amusement Device Act) -- imposes the occupation tax and requires a decal denoting payment.
• Revenue Ruling 54-90-1 -- the earlier ruling this ruling supersedes.
• One decal per playing station -- each playing station on a device operates as a separate device requiring its own decal, except where players use the same station sequentially.

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/revenue-rulings-issued-tax-commissioner
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr540801.pdf

Original ruling text

Revenue Ruling 54-08-1
Mechanical Amusement Device Tax

Supersedes Revenue Ruling 54-90-1

November 13, 2008

MACHINES WITH MULTIPLE PLAYING STATIONS
Issue:
Are multiple decals required for mechanical amusement devices with multiple playing stations?
Conclusion:
Yes. A decal is required for each playing station on a mechanical amusement device.
Definitions:
Decal means the stamp issued by the Department of Revenue denoting payment of the mechanical
amusement device occupation tax.
Mechanical amusement device means a machine which, upon insertion of a coin or coin substitute,
operates or is used for a game, contest, or amusement of any description. A mechanical amusement
device does not include vending machines that dispense tangible personal property, devices located
in private homes for private use, pickle card dispensing devices, devices which are mechanically
constructed in a manner that would render their operation illegal under the laws of the State of
Nebraska, or devices operated on an hourly fee basis.
Playing station means either the mechanical amusement device or the portion of a mechanical
amusement device that allows a player to operate the machine independently of, or simultaneously
with, another player. The number of playing stations may be different than the number of screens
or number of coin slots.
Analysis:
All operators and distributors that lease or rent mechanical amusement devices to business owners
are required to purchase and affix a decal or decals denoting payment of the occupation tax as
required under the Mechanical Amusement Device Act (Neb. Rev. Stat. §§ 77-3001 to 77-3011).
A decal is required for each mechanical amusement device. If a mechanical amusement device
has multiple playing stations, each playing station operates as a separate mechanical amusement
device for which the occupation tax must be paid. A decal is required for each playing station even
when they are part of the same machine. An operator or distributor is not required to purchase
multiple decals for mechanical amusement devices on which multiple players must use the same
playing station sequentially.
APPROVED:

Douglas A. Ewald
Tax Commissioner
November 13, 2008
Nebraska Department of Revenue, P.O. Box 94818, Lincoln, Nebraska 68509-4818