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Representative Kerry Benninghoff of House District 171 introduced skill games legislation earlier this week that does not include an additional tax on the games.
Benninghoff wrote a memo in April indicating that a proposal was coming without a “special” tax. That is a wildly different approach, as several lawmakers, including Gov. Josh Shapiro, are calling for a tax as high as 52%.
HB 1619 would grandfather in all existing skill game machines.
HB 1619 calls for limits on games but doesn’t say what they are
The tax structure on the games has been a point of contention. There have been rates proposed at 16%, 35%, and 52%.
Benninghoff’s bill goes in a different direction:
“No additional taxes or fees, including amusement taxes, shall be imposed on the placement or operation of a skill game or on the revenue generated by a skill game terminal unless specifically authorized under this act.”
HB 1619 has the Pennsylvania Department of Revenue overseeing the licensing and distribution of skill games across the state. The games would be taxed as they are currently, through sales tax and personal income taxes.
Licenses would be good for 10 years and cost different amounts for each entity:
- Distributor: $50,000
- Operator: $5,000
- Establishment: $250
Renewal fees would drop to $25,000 for distributors, $1,000 for operators, and remain the same for establishments.
HB 1619 promises limits on the types of establishments and the number of games a location could have, but it leaves the particulars up to the Department of Revenue.
“A program is established within the department to regulate the distribution, operation and use of skill games in this Commonwealth. The program shall be implemented and administered by the department.”
Skill games legislation approaching deadline
There have been multiple bills that have called for fair tax structure for both small businesses and the commonwealth.
The highest tax rate has been proposed by Shapiro, who argued for a 52% rate during his 2025 budget address in February. That amount dwarfs the 16% tax Sen. Gene Yaw introduced in April.
Sen. Chris Gebhard proposed a tax of 35%.
It’s becoming more and more unlikely that there will be a resolution before the June 30 deadline for the 2025/2026 fiscal year. Skill games are legal in the state following the Commonwealth Court’s ruling in December 2023. They might have to continue to operate under that ruling until next year.
