Saint Clair Advised to Tap Brakes on Copycat Skill Machine Ordinance, Consider Gross Receipts Tax Instead

Residents and Borough Council members in Saint Clair have seen what other municipalities are doing to cash in on the popularity of PA Skill machines operating in their communities.

Now, they want some of that action. After all, Saint Clair may have the most machines in any Schuylkill County municipality right now. An estimate thrown out at Tuesday’s meeting of Borough Council was nearly 80 such machines currently in operation there.

In recent weeks, boroughs like Minersville and Cressona have either passed or are planning to adopt ordinances that would tax each PA Skill machine operating within their limits $1,000 annually through a licensing fee.

If Saint Clair were to do the same, that could be quite the windfall for the borough.

But on Tuesday, Saint Clair Solicitor Ed Brennan urged council members and some residents who urged their elected officials to pass a similar ordinance to tap the brakes on that idea just a little bit.

First, he cautioned, the borough can’t impose a similar fee or tax through its existing Amusement Tax. Brennan said the language of an amusement tax only allows for the collection of a percentage of money on any entrance fees paid to access an establishment where these games are played. No business in Saint Clair charges an entrance fee to play PA Skill machines so the borough would collect exactly $0 going that route.

Further, Brennan believes Saint Clair can’t just pick a number out of thin air – like $1,000 per machine – to tax each machine through a licensing fee. He said the borough would have to justify that cost somehow by saying that it costs that much to conduct inspections and keep a record of how many machines are operating there. And it definitely can’t be collected via the Amusement Tax.

“The number has to have some rational basis,” Brennan said. “You can’t just pick a big number. As much as you’d like to, those days are done of just picking a number as your tax.”

That doesn’t mean Saint Clair is out of luck when it comes to imposing some form of tax or fee on the PA Skill machines that seem to be breeding like rabbits in the borough.

“In order to do it right, you have to make sure that the research is done. So, if it’s challenged (legally), you’re on good footing,” Brennan told council members.

There are two options, essentially, for Saint Clair council members to consider and either or both can be chosen going forward.

First, is a gross receipts tax, which is already in place in Saint Clair. Brennan believes the gross receipts tax in the borough is at 1%. He told council members that the borough could get records regarding how much Skill machines generated and tax that through this means.

Saint Clair, through a separate ordinance, could impose that licensing fee, provided it is a justifiable amount. That ordinance could also tackle other concerns some on council and in the community have with Skill machines there.

Brennan said the ordinance could limit how many Skill machines are allowed in a single establishment, their operating hours, that records are being kept of the receipts, and that they’re part of another business, not a standalone operation, like a casino.

Subscribe to Coal Region Canary

Get email updates from Coal Region Canary by becoming a subscriber today. Just enter your email address below to get started!

Support Coal Region Canary

Like our reporting and want to support truly local news in Schuylkill County? Your small donations help. For as little as $5, your contribution will allow us to cover more news that directly affects you. Consider donating today by hitting the big yellow button below ...