Did SC PLR 92-6 require the Patriot Model 5000 coin-operated breath-alcohol tester to carry the historical amusement-machine license?

Plain-English summary

South Carolina PLR 92-6 concluded that the Patriot Model 5000 coin-operated breath-alcohol tester was not an amusement machine and therefore was not subject to the historical C.O.D. license tax.

The machine took two quarters, displayed the user's alcohol reading, and played one of more than 25 humorous voice comments. Even with that entertainment-like feature, the ruling found that its primary purpose was safety.

Why the license tax did not apply

Section 12-21-2720(2) imposed a historical $100 license tax on a machine for playing amusements or video games without a free-play feature.

The ruling treated a machine's primary purpose as a factual question requiring review of all its characteristics and circumstances. The Patriot Model 5000's advertising stated that:

• it was not a toy;
• it was tested weekly for accuracy;
• bar staff could use it as a polite way to stop serving unruly drinkers; and
• establishments using it might qualify for a liquor-liability insurance reduction.

The PLR concluded that the machine primarily helped protect the customer and the driving public. Its reading could tell a patron and bar owner that the patron should stop drinking, choose a designated driver, or call a cab.

Because that safety function—not playing an amusement—was primary, the machine fell outside the cited license-tax category.

What this means for you

Bar and restaurant operators

A coin slot and humorous output did not automatically make this machine an amusement device. The ruling looked at what the machine principally did and how it was promoted.

Coin-operated-device businesses

Classification depended on the device's own facts. A different machine with a different primary purpose could receive different treatment.

Tax professionals

The PLR used a facts-and-circumstances primary-purpose test rather than classifying the machine from one feature in isolation.

Current operators

Confirm today's licensing law and fee amounts. The $100 charge and statutory wording analyzed here are historical.

Common questions

Q: Did accepting coins make the tester taxable as an amusement machine?

A: No. The ruling focused on the machine's primary purpose, not the payment method alone.

Q: Did the humorous voice comments change the result?

A: No. The ruling still found that customer and public safety were the machine's primary purpose.

Q: What safety uses did the ruling identify?

A: Helping a patron or bar owner recognize when the patron should stop drinking, select a designated driver, or call a cab.

Q: Was the Patriot Model 5000 subject to the historical $100 license?

A: No. It was not a machine for playing amusements under Section 12-21-2720(2).

Q: Can another device operator rely on PLR 92-6?

A: No. The ruling was temporary, fact-specific, and nonprecedential.

Citations and references

• S.C. Code Ann. § 12-21-2720(2) — historical C.O.D. license tax for amusement or video-game machines without free play
• S.C. Code Ann. § 12-4-320 — Tax Commission authority cited by the ruling
• SC Revenue Procedure #87-3 — private-letter-ruling procedure cited by the ruling

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR92-6.pdf

Original ruling text

SC PRIVATE LETTER RULING #92-6

TO:

ABC Associates

TAX ANALYST:

Deana West, Tax Analyst
Tax Policy and Appeals Department

SUBJECT:

Breath Alcohol Tester Machine
(C.O.D. License Tax)

REFERENCE:

S.C. Code Ann. Section 12-21-2720 (Supp. 1991)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (Supp. 1991)
SC Revenue Procedure #87-3

SCOPE:

A Private Letter Ruling is a temporary document issued to a taxpayer,
upon request, and it applies only to the specific facts or circumstances
related in the request.
Private Letter Rulings have no precedential value and are not intended for
general distribution.

Question:
Is the Patriot Model 5000, a coin-operated computerized breath alcohol tester, subject to the
C.O.D. license tax imposed under Code Section 12-21-2720(2)?
Facts:
In an attempt to combat the problem of drunk driving, some bar owners are placing coinoperated computerized breath alcohol testers in their establishments. The particular machine in
question is known as the Patriot Model 5000. This machine operates by a person inserting two
quarters, placing the straw provided into the "bullseye" on the machine, and exhaling. The
machine states the legal drinking limit and shows a digital display of the persons alcohol reading,
accompanied by one of over 25 appropriate humorous voice comments.
The advertising brochures for the Patriot Model 5000 indicate the following characteristics:
1.

The tester is not a toy.

2.

The machine is tested weekly for accuracy.
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3.

The machine can be used as a polite way to stop serving unruly drinkers.

4.

Establishments using this machine may be eligible for up to a 10% to 40% reduction on
their liquor liability license.

Discussion:
Code Section 12-21-2720 reads, in part:
Every person who maintains for use or permits the use of, on any place or premises
occupied by him, any of the machines or devices described below shall apply for...a
license...and shall pay for the license a tax of...one hundred dollars for each machine
described in item (2) of this section...

(2) Any machine for the playing of amusements or video games, without free play
feature...(emphasis added).
In summary, a machine for the playing of amusements that does not have a free play feature
requires a $100 license. A machine which is not for the playing of amusements is not required to
have a $100 license.
The primary purpose of a particular machine is a question of fact to be determined by an
examination of all the facts and circumstances. Based upon a review of the Patriot Model 5000's
characteristics and advertising brochures, it can be concluded that the machine's primary purpose
is to provide for the safety of the customer as well as the driving public. With information about
a patron's blood alcohol content, the bar owner, as well as the patron, are aware that it is time for
the patron to stop drinking, select a designated driver, or call a cab.
Conclusion:
The Patriot Model 5000 is not a machine for the playing of amusement and, therefore, is not
subject to the C.O.D. license tax imposed under Code Section 12-21-2720(2).

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