With local and state government holding all the cards, area bars feel like they are in danger of folding.
Between a smoking ban and stronger enforcement on amusement tax evasion, taverns and pubs in the Baltimore area had a very tough February. State Comptroller Peter Franchot has made it one of his goals in office to crack down on establishments that either fail to pay an amusement tax or have failed to even set up an account with the state to put their devices on record.
“I?m 100 percent behind [Franchot],” said Baltimore City Councilman Edward Reisinger, a part owner of Good Times bar. “You have some establishments that have ?ghost? machines, and they are not paying taxes and they should pay.”
State law requires that venues with pool tables, jukeboxes, video poker and other similar devices pay a 10 percent tax on gross receipts. This “amusement tax” has long been an item that slips through the cracks. Franchot?s office is set on fixing the leaks.
In a 2006 report issued by the Abell Foundation, a Baltimore-based nonprofit group, the study revealed there are nearly 3,500 video gambling devices around Baltimore where players receive their winnings from bartenders or clerks, thus circumventing accurate receipts. Other issues include businesses putting out more machines then allowed by law and owners not registering accounts with the state. The report estimates that Maryland loses more than $15 million annually in uncollected taxes.
In a crackdown effort, the comptroller?s office has sent out more than 100 letters to businesses, calling for compliance. Of these letters, approximately 28 targets have yet to respond, firmly putting a target on their backs.
“We are involved right now in doing follow-up on those who have not responded,” said Jim Loftus, the directorof the compliance division for the Office of the Comptroller. “It?s just too early to say any more than that.”
To complicate matters even further, a bill in front of the City Council looking to allow up to 11 total amusement devices in an establishment has been sent back down to committee for review. As to a possible return of the legislation, it seems like it?s only a matter of time.
“What?s next?” said Frank Boston III, lawyer for the Baltimore Licensed Beverage Association. “First a smoking ban passes, and now they are cracking down on these video machines. Why don?t they just padlock our doors?”
