Rev. Rul. 73-291

Advice has been requested whether the special tax on coin-operated gaming devices imposed by section 4461(a) of the Internal Revenue Code of 1954 applies under the circumstances described below.

A store proprietor maintained two coin-operated gaming devices for use at a particular location he occupied. He paid the annual special tax imposed by section 4461(a) of the Code on such devices and received the special tax stamp denoting payment of the tax on the devices at that location. Before the period covered by the tax had expired, the proprietor removed one of the devices to different premises occupied by him and maintained the machine for use thereon. The remaining device continued in use at the original location. The question presented is whether the proprietor may operate the transferred device at its new location without incurring additional tax, until such time as the period covered by the payment of special tax has expired.

Section 4461(a) of the Code imposes a special tax to be paid by every person who maintains for use or permits the use of, on any place or premises occupied by him, certain coin-operated gaming devices. The tax is imposed at the rate of $250 a year for each such device so maintained.

Section 4905 of the Code (which is a section under Chapter 40 of the Code) provides, in part, that when any person removes from the premises for which a trade or business was taxed to any other place, he may carry on the trade or business at the new location without the payment of any additional tax.

Section 4463 of the Code provides that an operator of a place or premises who maintains for use or permits the use of any coin-operated device shall be considered, for purposes of Chapter 40, to be engaged in a trade or business with respect to each such device.

By reason of the provisions of section 4463 of the Code, the reference in section 4905 to the removal of a trade or business from one premises to another, when related to the question of removing coin-operated gaming devices, must be construed in such manner that the removal of each device is considered the removal of a separate trade or business.

Accordingly, when, as in the instant case, a taxpayer removes a coin-operated gaming device, upon which tax has been paid, from one location occupied by him to another location occupied by him, no additional tax liability is incurred under section 4461 of the Code.