Illinois charges a yearly tax for running certain coin-operated amusement machines (like arcade machines) and redemption machines (machines that give tickets/prizes, as defined in the Criminal Code).
Section 1 — The yearly tax
- If you operate a covered machine in Illinois, you must pay $30 per machine per year.
- The tax year runs from August 1 to July 31 of the next year.
- This applies to coin/token/chip operated amusement devices that do not give the player money or property, and also to redemption machines.
Section 2 — Registration, payment, and decals (stickers)
(a) What operators must do before putting a machine out for the public
Before you let the public use the machine, you must:
- File a form with the Illinois Department of Revenue.
- Include:
- Your name and address
- A short description of the machine
- The location/premises where it will be placed
- Any other information the Department requires
- Pay the $30 tax for each machine.
- The Department will give you a tax decal (sticker) for each paid machine.
- You must securely attach the decal to the machine.
- Money collected goes into the State’s General Revenue Fund.
(b) Refunds/credits if you paid by mistake
- If you paid too much or paid by error, you can file for a refund or credit.
- The Department can first use your refund/credit to pay any taxes/penalties/interest you still owe under this Act.
- If there’s an ongoing dispute about what you owe, the Department can delay the refund until it’s settled.
- Usually, you cannot get a refund for payments made more than 3 years earlier (based on the July 1 rule in the statute).
- Refunds/credits may include interest, under the Uniform Penalty and Interest Act.
- Cash refunds depend on whether money was appropriated for refunds; hardship cases may be paid first if funds are limited.
Section 2a — “Sunset” dates for new tax breaks
- Any new exemptions, credits, or deductions created after 1994 must have an end date.
- If a law creates a tax break but doesn’t list an end date, it automatically ends 5 years after that law takes effect.
Section 3 — Moving decals and how they must be attached
- A decal can be moved from one machine to another, but the transfer must be reported to the Department.
- Decals expire on July 31 after they are issued.
- Decals must be securely attached.
- It counts as “secure” if it is behind a clear cover that is screwed/bolted/firmly fastened.
Section 4 — Department rulemaking
- The Department of Revenue can make and enforce rules to run this program.
Section 4a — Procedure law applies (with exceptions)
- The Illinois Administrative Procedure Act generally applies to the Department’s actions under this law, with some specific exceptions listed in the statute.
Section 4b — Banks may help collect the tax
- The Department can set up a system where banks or savings and loans collect the tax and distribute decals.
- Those institutions can be licensed, and the Department can charge a license fee up to $100 per year.
Section 5 — Penalty for not paying
- If a machine is found out for public use without the tax being paid, the tax is increased by 30% as a penalty.
Section 6 — Lawsuits to collect unpaid amounts
- The Department can file lawsuits to collect unpaid taxes, fines, or penalties.
Section 7 — Cities and counties can also tax or regulate
- The state tax is not the only tax allowed.
- Cities and counties may also charge local taxes or license fees and regulate these machines under other laws.
Section 8 — Crimes (misdemeanors)
- If someone operates/displays a machine so the public can play it before the tax is paid, that is a Class C misdemeanor.
- Using one of these machines for something other than amusement (when it’s taxed as an amusement device) is also a Class C misdemeanor.
Section 9 — Repealed
- Section 9 no longer exists (it was repealed).
Section 10 — Appealing Department decisions
- Final Department decisions can be reviewed in court under the Administrative Review Law or through the Illinois Independent Tax Tribunal Act (depending on the situation).
Section 11 — What the law does NOT apply to
This law does not apply to:
- Coin devices used by public utilities to provide utility service, or
- Machines that are only vending machines (selling products/services) and not amusement devices.
Section 12 — If part is invalid, the rest still stands
- If a court strikes down one part of the law, the rest of the law remains valid.
Section 13 — Seizure without a warrant (in some cases)
- A Department employee may seize a covered amusement device without a search warrant if it is being displayed in front of them in violation of the law.
- The device can then be subject to forfeiture.
Section 14 — Hearing and forfeiture process (after seizure)
- After seizure, the Department must hold a hearing in the county where it was seized to decide if the law was violated.
- The Department must give at least 7 days’ notice to the owner (if known) and/or the person who had it.
- If no one is known, the notice is published in a local newspaper for 3 weeks.
- If the Department finds a violation, it can order the device confiscated and forfeited to the State.
- The owner/person can redeem the device within 30 days by paying:
- 2 times the yearly tax, plus
- a 10% penalty
- If not redeemed (and after any appeals end), the Department sells the device and sends proceeds to the State Treasurer.
- If the value is $500 or more, it must be sold by public competitive bidding with advertisement.
Section 15 — Search warrant option and court forfeiture
- Officers/Department employees can also go to court to get a search warrant if they believe there is a violation.
- If a court finds the machine was displayed illegally, it can order it forfeited.
- Redemption is similar: within 30 days, pay 2× the annual tax + 10% penalty.
- If not redeemed, the Department sells the device (special bidding rules if $500+).
Section 16 — Name of the law
- This law is called the Coin-Operated Amusement Device and Redemption Machine Tax Act.