Games and Gambling

Games and Gambling https://wahospitality.org/wp-content/uploads/2016/05/darts-856367_1280.jpg

How does tax apply to games and gambling?

Many restaurants offer entertainment in the form of games. The restaurant may own the games or receive commission for allowing the games to be placed in the restaurant.

Commissions: Income for allowing the placement of vending machines or games is subject to B&O tax under the Service and Other Activities classification. (See Vending Machines Section at dor.wa.gov/Content/DoingBusiness/BusinessTypes/Industry/RestaurantsPreparedFoods/default.aspx#DORLogo.)

Air hockey/Pool/Foosball/Darts/Shuffleboard: These activities are retail sales. Gross receipts are subject to retail sales tax and the Retailing classification of the B&O tax.  Game operators may factor out retail sales tax from the amount received by coin-operated games to determine gross receipts.

Note: Effective Jan. 1, 2016, amounts paid to play all forms of dart games (i.e., steel tip darts, soft tip darts, and electronic dart games) are retail sales.  Prior to this date steel and soft tip darts were retail sales, and electronic dart games were subject to B&O tax under the Service and Other Activities classification.  

Video games/Amusement devices: This includes slots, pinball, and other machines or devices that permit the patron to play a game. Gross receipts are subject to B&O tax under the Service and Other Activities classification.

Note: Sales or use tax applies to the purchase of the machines.

Internet Access: Gross receipts for allowing customers access to the Internet is subject to B&O tax under the Service and Other Activities classification.

References: WAC 458-20-187

 

 

Rev. 2/19/16

 


This article is an excerpt from the Handbook for Excellent Restaurant Operations (HERO), published by the Washington Hospitality Association.  Want a hard copy of the whole manual?  It’s one of the many benefits of becoming a member!  Find out more about joining the Washington Hospitality Association here.

View the Table of Contents

Categories: HERO