State inspectors on the hunt for expired tags — on arcade games


by Joe Conger / KENS 5

Posted on May 14, 2013 at 9:00 PM

Updated Tuesday, May 14 at 9:00 PM

SAN ANTONIO, Texas – Before the coin hits the slot and any aliens are slain in a virtual world, the state of Texas expects its cut through the coin-operated machine tax.

“We have about 170 inspectors around the state that do compliance checks for all types of taxes around the state,” said R.J. DeSilva, spokesperson for the Texas Comptroller of Public Accounts

The tax is collected on video games and other games of skill. It is not collected on other coin-operated machines, such as cigarette or vending machines.

In the last two years, inspectors with the State Comptroller’s Office looked at 90,000 coin-operated game machines across the state. On average, one out of every 10 machines was found out of compliance.
“We do spot inspections as part of our normal routine. We also get tips from different folks to go check places out,” DeSilva said.
Inspectors hit a home run at PowerSwing of San Antonio. The tags on the batting cages show no renewal since 2006. And for 10 machines, that’s seven years of back taxes totaling nearly $6,000.
Off camera, the complex’s manager told KVUE's sister station KENS that PowerSwing had no idea it needed to continue to register its machines.
“We assess penalties on it, on the owner. We also charge taxes if the owner needs to reopen the machines,” DeSilva said.
PowerSwing took a hard strike. Its machines were officially “sealed” by investigators.
Managers said they’ve been to Austin to make amends in order to play ball again.
In the last two years, the state reports it has collected $531,762 in penalties and fines.
Officials said the taxes from all these amusements and games of skill bring in more than $10 million a year to the state’s general revenue fund, with portions of that money earmarked to go toward education.