Georgia Coin Operated Amusement Machine Sales Tax Audit

By November 1, 2018Sales Tax

Georgia Coin Operated Amusement Machine Sales Tax Audit

Our firm was dealt with a new predicament where a GDOR auditor levied sales tax on the winnings of a COAM.

At issue is the taxability of transactions stemming from the winnings of coin operated amusement machines, administered by COAM. Rule 13.3 of COAM allows players of their coin operated machines to apply their winnings to the following three items without incurring a taxable transaction:

  1. Gas
  2. Grocery
  3. Lottery Reply

The auditor determined that the use of winnings in these circumstances are taxable transactions. If a player went from one machines to another machine, the auditor applied sales tax to the replay. Clearly, the replay was levied sales tax. Neither COAM or the State lottery commission has rules and/or regulations regarding record keeping of such transactions.

For the reasons mentioned above, we protested the liability as a result of the contrast between the rules surrounding COAM versus the audit procedure that was used in his audit. In essence, the auditor has determined all of the proceeds of the winnings were used to purchased fully taxable items that were simply not charged sales tax.

Georgia Coin Operated Amusement Machine Sales Tax Audit

Leave a Reply