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Sales and Use Tax on Amusement Machines

What business proprietors and owners of coin-operated amusement machines need to know.

Definitions

Coin-operated Amusement Machine
Any machine operated by coin, slug, token, coupon, or other similar device for the purpose of entertainment or amusement, such as:
  • Coin-operated radios or televisions
  • Telescopes
  • Juke boxes or music machines
  • Pool tables
  • Mechanical rides
  • Video games or pinball machines
Dealer
Anyone required to register to collect and remit sales tax to the State of Florida.
Lease/License
The privilege to use real property or tangible personal property for any lawful purpose.
Real Property
The surface land, improvements thereto, and fixtures; i.e., "realty" and "real estate."
Tangible Personal Property
Property that may be seen, weighed, measured, touched, or is in any manner perceptible to the senses.

What is Taxable?

Sales

Sales tax is due on the receipts from the use of coin-operated amusement machines.

Machine Rental

The lease or license to use an amusement machine is taxable. The tax is collected by the machine owner (lessor) from the operator (lessee) and is based on the lease amount.

Real Property Rental

If the machine owner is also the operator and places the machine at another person's location, the arrangement between the operator and the location owner is a taxable lease or license to use real property. The tax is collected by the location owner (lessor) from the machine operator (lessee) and is based on the lease amount.

What is Exempt?

Receipts from amusement machines operated by churches and synagogues are exempt.

Certificates and Registration Required

Every physical location where coin-operated amusement machines are in operation must display a certificate authorizing the operation of a specified number of machines. The cost of the certificate is $30 per machine at each location. To obtain certificates, submit an Application for Amusement Machine Certificate (Form DR-18). Certificates must be renewed July 1 of each year.

The operator must be registered for sales and use tax in order to purchase an amusement machine certificate. To register, go to the Department's Internet site and click on e-Services. If you do not have Internet access, you can complete a paper Application to Collect and/or Report Tax in Florida (Form DR-1).

Operators with machines in multiple counties need a separate registration for each county in which their machines are located. If all the machines are located in one county, one registration is sufficient.

A $250 per machine penalty is imposed upon the operator for failure to obtain and properly display a certificate. Also, a penalty of $250 per machine is imposed on the lessee (when the lessee is not also the operator) of any machine placed in a business without a proper identifying certificate.

Who Collects and Remits the Tax?

The machine operator is responsible for:

  • Removing the receipts from the machine.
  • Remitting the tax on the gross receipts from the machine, without deducting rent, license fees or other costs.*
  • Obtaining and displaying the amusement machine certificate.
  • Keeping suitable records.

If the machine owner is also the business proprietor where the machine is operated, the business proprietor is considered the operator.

If the business proprietor where the machine is located does not own the machine, the business proprietor is considered the lessee and "operator" unless otherwise provided in a written agreement between the business proprietor and machine owner. The written agreement should specify:

  • Who the machine "operator" is.
  • Who is responsible for keeping records and remitting the tax on machine receipts.
  • Whether the arrangement is a lease of tangible personal property or a license to use real property.

*Exception

If the written agreement between the machine owner and the business proprietor does not specify who is responsible for paying the tax, the business proprietor is responsible for paying the tax regardless of who is responsible for removing the receipts from the machine.

Machine Lease or License

The arrangement between the machine owner and the business proprietor is viewed as a lease of tangible personal property. The business proprietor is responsible for paying sales tax on the lease of the machine to the machine owner, who then remits the tax to the Department.

However, if the parties designate in writing that the arrangement is a license to use real property, the machine owner/operator pays the tax on the license fee to the business proprietor, who then remits the tax to the Department. A machine operator can obtain a direct pay permit from the Department of Revenue and self-accrue and remit the tax due on the license to use real property. This relieves the business proprietor of the obligation to collect tax. To apply for a permit, submit Form DR-16A, Application for Self-Accrual Authority/Direct Pay Permit - Sales and Use Tax.

How is Tax Calculated?

If your sales tax rate is:                 Then your gross receipts divisor is:
6% 1.040
6.25% 1.0425
6.5% 1.045
7% 1.050
7.5% 1.055

Gross receipts divided by your gross receipts divisor equals gross sales. Gross receipts minus gross sales equals the tax due.

Example:
$100.00 ÷ 1.045 = $95.69 gross sales.
$100.00 - $95.69 = $4.31 tax due.

The sales tax rate of 6 percent plus any applicable discretionary sales surtax is collected on the amount paid for the lease of the machines, license to use the real property (commissions paid to the owners of real property), taxable purchase of amusement machines, repairs, and parts.

Reference Material

Tax Laws

Call Taxpayer Services to request a copy of section 212.05(1)(h), Florida Statutes, Sales, storage, use tax and Rule 12A-15.011, Florida Administrative Code, Coin-Operated Amusement and Vending Machines, and Other Devices. Tax laws are also available on the Department's Internet site. Look for the Florida Tax Law Library.

Brochures

Ask for the following brochures, available from your local Department of Revenue (DOR) service center, the DOR Distribution Center, or Taxpayer Services:

  • Tangible Personal Property Rentals
  • Commercial Real Property Rentals
  • Concession Stands
  • Vending Machines

For Information and Forms

To speak with a Department of Revenue representative, call Taxpayer Services, Monday through Friday, 8 a.m. to 7 p.m., ET, at 800-352-3671, or call the service center nearest you.

Persons with hearing or speech impairments may call the TDD at 800-367-8331 or 850-922-1115.

To receive forms by mail:
  • Order multiple copies of forms from our Internet site, or
  • Mail form requests to:
    Distribution Center
    Florida Department of Revenue
    168A Blountstown Hwy
    Tallahassee FL 32304-3761

Department of Revenue service centers host educational seminars about Florida’s taxes. Visit our Free Tax Seminars internet page to get a schedule of upcoming seminars and to register.