What physical, licensing, and employee requirements made each video-game room a separate place under RR 95-13?

Plain-English summary

South Carolina Revenue Ruling 95-13 explained the regulation for determining whether several video-game areas in one structure counted as separate "single places or premises." It replaced RR 95-7 after the regulation became effective June 23, 1995.

Each premises had to be enclosed by qualifying exterior walls or firewalls with no window, door, or other opening leading directly to another machine area. Each also needed a separate electric meter, at least one separate employee on the premises during every business hour, a separate local business license where required, and a separate state sales-tax license. All four operational factors had to be satisfied.

Landlord-installed meters were allowed if applicable Public Service Commission rules were followed. Premises could share central heating and air conditioning, and one operator could receive one combined electric bill, but each premises still needed its own meter.

A permanently sealed window between machine areas still violated the regulation. Doors to a mall common area had to meet firewall building-code requirements, but the regulation itself did not require them to remain closed or be opaque.

Several premises could share a payout station, but each premises' income and payouts had to be separately accounted for. An employee stationed only in a common payout area did not satisfy the rule: each distinct premises needed an employee physically present whenever open. If one convenience-store building itself was the premises and contained no more than five machines in an internal room, the employee could be elsewhere inside that building.

Common questions

Q: Did each premises need a utility-company meter? No. A landlord-installed meter could qualify, subject to applicable utility regulation.

Q: Could premises share heating, air conditioning, or one invoice? Yes, while maintaining separate meters.

Q: Could one employee cover several game rooms from a common area? No. RR 95-13 required an employee inside each distinct premises during business hours.

Q: Could multiple premises share a payout counter? Yes, but their income and payouts had to remain separately accounted for.

Q: Did RR 95-13 replace RR 95-7? Yes, expressly.

Citations and references

• S.C. Code Ann. § 12-21-2804(A) (five-machine limit described)
• S.C. Code Ann. § 12-21-2798 (regulatory authority)
• Video Game Machines Act, Article 20, Chapter 21 of Title 12 (context identified in the ruling)

Subject

Regulation - Single Place or Premises

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR95-13.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING #95-13 (TAX)

SUBJECT:

Regulation - Single Place or Premises
(Video Game Machines)

EFFECTIVE DATE: The date the Video Game Machine regulation on what constitutes a
"single place or premises" is effective.
SUPERSEDES:

SC Revenue Ruling #95-7 and all previous documents and any oral
directives in conflict herewith.

REFERENCES:

S. C. Code Ann. Section 12-21-2798 (Supp. 1994)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1994)
SC Revenue Procedure #94-1

SCOPE:

A Revenue Ruling is the Department of Revenue's official advisory
opinion of how laws administered by the Department are to be applied to a
specific issue or a specific set of facts, and is provided as guidance for all
persons or a particular group. It is valid and remains in effect until
superseded or modified by a change in the statute or regulations or a
subsequent court decision, Revenue Ruling or Revenue Procedure.

LAW AND REGULATION:
Code Section 12-21-2804(A) restricts the number of video game machines that may be located in
a "single place or premises" to five. The statute, however, does not define the terms single place
or premises. Under its authority in Code Section 12-21-2798 and in accordance with the
provisions of the Administrative Procedures Act, the Department promulgated regulations
concerning various aspects of the Video Game Machine Act. As a result, the following
regulation concerning what constitutes a "single place or premises" was approved by the General
Assembly. This regulation became effective June 23, 1995, and states:
The Video Game Machines Act, found in Article 20, Chapter 21 of Title 12, limits the
number of machines that may be located in a "single place" or "premises".
A single place or premises must be a fixed location. It does not include moving property
such as a boat or a train, unless such property is permanently affixed to a specific location.
A "single place" or "premises" means a structure surrounded by exterior walls or firewalls
consistent with the requirements of the applicable building code (or where no building code
is applicable, a one hour rated firewall), provided such exterior walls and firewalls may not
have any windows, doors or other openings leading to another area where video game
machines are located

1

If a structure surrounded by exterior walls has two or more areas where video game
machines are located, each surrounded by exterior walls or firewalls as defined and
required above, the Department must review all the facts and circumstances to determine if
each area in reality constitutes a single place or premise for video game machines. In
determining whether each entity is in fact a single place or premises, the Department of
Revenue will consider the following factors: (1) Does each entity or business have a
separate electric utility meter? (2) Does each entity or business have at least one separate
employee on the premises during business hours? (3) Does each entity or business have a
separate local business license where required? (4) Does each entity or business have a
separate state sales tax licenses? A positive answer to these four questions is required for
each area to be considered a "single place or premise" for purposes of The Video Game
Machines Act.
The purpose of this ruling is to address various issues and questions that have arisen as a result
of the General Assembly's approval of the regulation. Most of the issues and questions concern
the application of this regulation to structures surrounded by exterior walls that have two or more
areas where video game machines are located.
QUESTIONS AND ANSWERS:
Requirement of Separate Electric Utility Meters
The regulation on "single place or premises" requires a location with video game machines to have
its own electric utility meter if it is located in a structure that has other areas with video game
machines.
1.

Q. Does this require each single place or premises 1 to have an electric utility meter that is
supplied by a traditional electric utility company? Or may a landlord install his own
meters in each tenant's single place or premises?
A. Each single place or premises is not required to have an electric utility meter that is
supplied by and read by an electric utility company. The landlord may install his own
meters in each tenant's single place or premises; however, the landlord and tenant must
comply with all applicable Public Service Commission laws and regulations.

2.

Q. Does the requirement for separate electric utility meters require each single place or
premises to be completely self-contained? In other words, may a mall type setting have
a central heating and air conditioning unit whereby heating and air conditioning costs
are included in the lease? Or must each single place or premises have its own heating
and air conditioning system?
A. A mall type setting may have a central heating and air conditioning unit whereby
heating and air conditioning costs are included in the lease. Each single place or

1

See page 2 of this document for the regulation that defines the term "single place or premises" for purposes of
the Video Game Machines Act.

2

premises is not required to have its own heating and air conditioning system. However,
each single place or premises must have a separate electric utility meter.
3.

Q. Does the requirement for separate electric utility meters also require each single place
or premises to be billed separately for the electricity? In other words, if one person
operates more than one single place or premises in the structure, may that person be
billed on one invoice for all single places or premises operated by the person within the
structure?
A. The requirement for separate electric utility meters does not require each single place or
premises to be billed separately for the electricity. If one person operates more than one
of the single places or premises in the structure, that person may be billed on one
invoice for all single places or premises the person operates within the structure.
However, each single place or premises must have a separate electric utility meter.

Windows, Doors, and Other Openings in Exterior Walls and Firewalls
The regulation on "single place or premises" states that "exterior walls and firewalls may not have
any windows, doors or other openings leading to another area where video game machines are
located."
4.

Q. If a firewall has a window leading to another area where video game machines are located,
but that window is permanently sealed shut, is the single place or premises in violation of
the regulation?
A. The regulation does not distinguish between windows that may be opened and windows
that are sealed shut. A firewall with a window leading to another area where video game
machines are located, even if that window is permanently sealed shut, is a violation of the
regulation.

5.

Q. In a mall type setting, must the firewalls which provide access to the commons area of the
structure have doors that meet the building code requirements of doors within a firewall?
Or may such firewalls have an opening without a door leading to the commons area?
A. In a mall type setting, the firewalls which provide access to the commons area of the
structure must have doors that meet the building code requirements of doors within a
firewall.

6.

Q. In a mall type setting, since the firewalls which provide access to the commons area of the
structure must have doors that meet the building code requirements of doors within a
firewall, must these doors remain closed at all times except when the door is opened by
someone entering or leaving the location?
A. The regulation does not require the doors within the firewalls to be closed at all times.
Such doors may remain open during the business hours of the single place or premises,
unless the building code requirements for doors within a firewall require such doors to
remain closed except when the door is opened by someone entering or leaving the location.

3

7.

Q. In a mall type setting, since the firewalls which provide access to the commons area of the
structure must have doors that meet the building code requirements of doors within a
firewall, may these doors be constructed of glass or must the doors be opaque?
A. The regulation does not require the doors to be made of a certain material and does not
require the doors to be opaque. However, the doors, whether made of glass or other
materials, must meet the building code requirements for doors within a firewall.

Employees
The regulation on "single place or premises" requires that "each entity or business [within a structure
that has several areas where video game machines are located] have at least one separate employee
on the premises during business hours".
8.

Q. In a mall type setting, will a separate payout station be required for each single place or
premises? Or may several single places or premises payout winnings from the same payout
station (cash register)?
A. In a mall type setting, a separate payout station will not be required for each single place or
premises. The regulation does not establish a requirement with respect to payout stations
within a structure that has several single places or premises.
However, since the regulation requires separate state sales tax licenses for each single
place or premises, each location's income and payouts must be accounted for separately.

9.

Q. Is an employee required to be located in the same single place or premises as the video
game machines at all times? In other words, in a mall type setting, may the employee for
each single place or premises be located in a commons area where players come to collect
their winnings or purchase food and drinks?
A. The regulation requires that "each entity or business [within a structure that has several
areas where video game machines are located] have at least one separate employee on the
premises during business hours." "On the premises" refers to the single place or premises
itself. Therefore, the regulation requires each distinct single place or premises to have an
employee present on the premises anytime the business is open. In other words, in a mall
with 10 single places or premises, there must be an employee in each of the 10 single
places or premises during all business hours.

10

Q. If a single place or premises, such as a building that houses a convenience store, has no
more than five video game machines within it and has these machines located in a game
room within the building, does the regulation require that an employee be located in the
same room as the video game machines at all times?
A. No, the building housing the convenience store is the single place or premises. Therefore,
the regulation only requires the employee to be located within the building and not
specifically within the game room that contains the five video game machines.

4

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III
Burnet R. Maybank, III, Director

Columbia, South Carolina
August 1
, 1995

For questions concerning this matter, please contact your local Taxpayer Service Center as follows:
Aiken
Beaufort
Charleston
Columbia
Florence

(803) 641-7685
(803) 524-2852
(803) 571-3000
(803) 737-4602
(803) 661-4850

Greenville
Myrtle Beach
Rock Hill
Spartanburg

5

(803) 241-1200
(803) 293-6550
(803) 324-7641
(803) 594-4900