State Lawmakers are considering a plan to change the way arcade games in South Dakota are taxed.
What could be called the Pac-Man Tax includes a registration system for coin operated amusement games that began in 1985. Today some believe the system is out dated.
If you’re in the right age bracket you know the video game Pac-Man.
“Those of us who are older might remember Pac-Man days. They had Pac-Man machines out and they were kind of the rage of the market,” says Bob Riter, a lobbyist for the Music and Vending Association of South Dakota .
Riter is worried about the proposed changes to the taxing system on amusement games. He says the system was put in place to protect municipalities from over taxing amusement games.
“It isn’t what it once was, but it’s a way we’ve done business for a long period of time. Seemed to us to have worked reasonably well, and we’re anxious about the change,” says Riter
But proponents say the system of registering arcade games as separate from other coin operated vending machines is not efficient. Right now, a coin operated pool table in a bar is taxed under a different system than a coin operated vacuumed at a car wash. Jason Evans with the South Dakota Department of Revenue tells lawmakers both should be taxed the same.
“This was implemented in 1985, and I’m sure in 1985 it was a great idea. We think we can do better now. And, there’s several things that we think create benefits by repealing this chapter and simply making it subject to the sales tax, both state and city sales tax,” says Evans.
Proponents call the change revenue neutral for taxpayers they say it reduces paperwork for businesses and red tape in government. Lawmakers in the House Taxation Committee agreed and passed the bill by a vote of 11 to 3. It goes next to the House floor.