What made each video-game room a separate 'single place or premises' under South Carolina RR 95-7?

Plain-English summary

South Carolina Revenue Ruling 95-7 explained a then-pending regulation for deciding whether multiple video-game rooms inside one structure counted as separate "single places or premises." The cited statute limited each place or premises to five machines. RR 95-13 expressly superseded this ruling after the regulation became effective and added employee-location guidance.

Each game room had to be enclosed by qualifying exterior walls or firewalls with no window, door, or other opening leading directly to another area containing video-game machines. When several enclosed rooms occupied one building, each room also needed a separate electric meter, at least one separate employee during business hours, a separate local business license where required, and a separate state sales-tax license. The regulation required a positive answer on all four operational factors.

The ruling allowed landlord-installed submeters; the electric utility did not have to supply or read each meter. Rooms could share central heating and air conditioning, and one operator could receive a combined electric bill for multiple separately metered rooms.

A permanently sealed window in a firewall still violated the no-window rule. A doorway from a game room to a mall common area needed a door meeting the applicable firewall building-code requirements, but the regulation itself did not require the door to remain closed or be opaque. Several rooms could share a payout station, but each room's income and payouts had to be accounted for separately because each held its own sales-tax license.

Common questions

Q: Did each room need a utility-company meter? No. The landlord could install and read separate meters.

Q: Could several rooms share heating and air conditioning? Yes, if their other electricity was separately metered as described.

Q: Did a sealed window between game rooms satisfy the firewall rule? No. The ruling treated even a permanently sealed window as a violation.

Q: Could a fire door to a mall common area be glass or remain open? The regulation did not require opacity or closure, but the door still had to comply with the applicable building code.

Q: Could multiple game rooms share one payout counter? Yes, but each room's income and payouts had to remain separately accounted for.

Q: Was RR 95-7 later replaced? Yes. RR 95-13 expressly superseded it.

Citations and references

• S.C. Code Ann. § 12-21-2804(A) (five-machine limit described in the ruling)
• S.C. Code Ann. § 12-21-2798 (authority for video-game-machine regulations)
• Video Game Machines Act, Article 20, Chapter 21 of Title 12 (regulatory context identified in the ruling)

Subject

Regulation - Single Place or Premises

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR95-7.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING #95-7 (TAX)

SUBJECT:

Regulation - Single Place or Premises
(Video Game Machines)

EFFECTIVE DATE:

The date the Video Game Machine regulation on what constitutes a
"single place or premises" is effective.

SUPERSEDES:

All previous documents and any oral directives in conflict herewith.

REFERENCES:

S. C. Code Ann. Section 12-21-2798 (Supp. 1994)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1994)
SC Revenue Procedure #94-1

SCOPE:

A Revenue Ruling is the Department of Revenue's official advisory
opinion of how laws administered by the Department are to be applied
to a specific issue or a specific set of facts, and is provided as guidance
for all persons or a particular group. It is valid and remains in effect
until superseded or modified by a change in the statute or regulations
or a subsequent court decision, Revenue Ruling or Revenue Procedure.

LAW AND REGULATION:
Code Section 12-21-2804(A) restricts the number of video game machines that may be located in a
"single place or premises" to five. The statute, however, does not define the terms single place or
premises.
Under its authority in Code Section 12-21-2798 and in accordance with the provisions of the
Administrative Procedures Act, the Department promulgated regulations concerning various
aspects of the Video Game Machine Act. As a result, the following regulation concerning what
constitutes a "single place or premises" was approved by the General Assembly.
This regulation is not yet effective and will not become effective until the legislation concerning
this regulation is signed by the Governor and is published in the State Register. The earliest
possible date that this regulation can be published in the State Register is June 23, 1995.
All persons operating locations with video game machines should carefully review both the
proposed regulation on what constitutes a "single place or premises" and the following questions
and answers of this advisory opinion.

1

If this regulation is approved by the Governor, each location must be in compliance with the
regulation as soon as it is published in the State Register. The regulation states:
The Video Game Machines Act, found in Article 20, Chapter 21 of Title 12, limits
the number of machines that may be located in a "single place" or "premises".
A single place or premises must be a fixed location. It does not include moving
property such as a boat or a train, unless such property is permanently affixed to a
specific location.
A "single place" or "premises" means a structure surrounded by exterior walls or
firewalls consistent with the requirements of the applicable building code (or where
no building code is applicable, a one hour rated firewall), provided such exterior
walls and firewalls may not have any windows, doors or other openings leading to
another area where video game machines are located.
If a structure surrounded by exterior walls has two or more areas where video game
machines are located, each surrounded by exterior walls or firewalls as defined and
required above, the Department must review all the facts and circumstances to
determine if each area in reality constitutes a single place or premise for video game
machines. In determining whether each entity is in fact a single place or premises,
the Department of Revenue will consider the following factors: (1) Does each entity
or business have a separate electric utility meter? (2) Does each entity or business
have at least one separate employee on the premises during business hours? (3)
Does each entity or business have a separate local business license where required?
(4) Does each entity or business have a separate state sales tax licenses? A positive
answer to these four questions is required for each area to be considered a "single
place or premise" for purposes of The Video Game Machines Act.
The purpose of this ruling is to address various questions that have arisen as a result of the General
Assembly's approval of the regulation. Most of the questions concern the application of this
regulation to structures surrounded by exterior walls that have two or more areas where video game
machines are located.
QUESTIONS AND ANSWERS:
Requirement of Separate Electric Utility Meters
The regulation on "single place or premises" requires a location with video game machines to have
its own electric utility meter if it is located in a structure that has other areas with video game
machines.

2

1. Q. Does this require each game room1 to have an electric utility meter that is supplied by and
read by an electric utility company? Or may a landlord install his own meters in each
tenant's game room and bill them himself?
A. Each game room is not required to have an electric utility meter that is supplied by and read
by an electric utility company. The landlord may install his own meters in each tenant's
game room and bill the tenants himself.

2. Q. Does the requirement for separate electric utility meters require each game room to be
   completely self-contained? In other words, may a mall type setting have a central heating
   and air conditioning unit whereby heating and air conditioning costs are included in the
   lease contract and electricity for other purposes is billed the tenant based on the meter
   reading? Or must each game room have its own heating and air conditioning system?
   A. A mall type setting may have a central heating and air conditioning unit whereby heating
   and air conditioning costs are included in the lease contract and electricity for other
   purposes is billed each of the tenants based on the meter reading. Each game room is not
   required to have its own heating and air conditioning system.
3. Q. Does the requirement for separate electric utility meters also require each game room to be
   billed separately by the power company or landlord for the electricity? In other words, if
   one person operates more than one game room in the structure, may that person be billed on
   one invoice for all game rooms operated by the person within the structure?
   A. The requirement for separate electric utility meters does not require each game room to be
   billed separately by the power company or landlord for the electricity. If one person
   operates more than one of the game rooms in the structure, that person may be billed on one
   invoice for all game rooms the person operates within the structure.
   Windows, Doors, and Other Openings in Exterior Walls and Firewalls
   The regulation on "single place or premises" states that "exterior walls and firewalls may not have
   any windows, doors or other openings leading to another area where video game machines are
   located."
4. Q. If a firewall has a window leading to another area where video game machines are located,
   but that window is permanently sealed shut, is the game room in violation of the
   regulation?
   1

The term "game room" as used in this document refers to each individual single place or premises with
video game machines. Therefore a game room, which may consist of several individual rooms (machine
area, office, restrooms, etc), must be "surrounded by exterior walls or firewalls consistent with the
requirements of the applicable building code (or where no building code is applicable, a one hour rated
firewall), provided such exterior walls and firewalls may not have any windows, doors or other openings
leading to another area where video game machines are located." In addition, a game room must also meet
all the other requirements of the regulation.

3

A. The regulation does not distinguish between windows that may be opened and windows
that are sealed shut. A firewall with a window leading to another area where video game
machines are located, even if that window is permanently sealed shut, is a violation of the
regulation.

5. Q. In a mall type setting, must the firewalls which provide access to the commons area of the
   structure have doors that meet the building code requirements of doors within a firewall?
   Or may such firewalls have an opening without a door leading to the commons area?
   A. In a mall type setting, the firewalls which provide access to the commons area of the
   structure must have doors that meet the building code requirements of doors within a
   firewall.
6. Q. In a mall type setting, since the firewalls which provide access to the commons area of the
   structure must have doors that meet the building code requirements of doors within a
   firewall, must these doors remain closed at all times except when the door is opened by
   someone entering or leaving the location?
   A. The regulation does not require the doors within the firewalls to be closed at all times.
   Such doors may remain open during the business hours of the game room, unless the
   building code requirements for doors within a firewall require such doors to remain closed
   except when the door is opened by someone entering or leaving the location.
7. Q. In a mall type setting, since the firewalls which provide access to the commons area of the
   structure must have doors that meet the building code requirements of doors within a
   firewall, may these doors be constructed of glass or must the doors be opaque?
   A. The regulation does not require the doors to be made of a certain material and does not
   require the doors to be opaque. However, the doors, whether made of glass or other
   materials, must meet the building code requirements for doors within a firewall.
   Employees
   The regulation on "single place or premises" requires that "each entity or business [within a
   structure that has several areas where video game machines are located] have at least one separate
   employee on the premises during business hours".
8. Q. In a mall type setting, will a separate payout station be required for each game room? Or
   may several game rooms payout winnings from the same payout station (cash register)?
   A. In a mall type setting, a separate payout station will not be required for each game room.
   The regulation does not establish a requirement with respect to payout stations within a
   structure that has several game rooms.

4

However, since the regulation requires separate state sales tax licenses for each game room,
each location's income and payouts must be accounted for separately.

SC Revenue Ruling #95-7

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III
Burnet R. Maybank, III, Director

Columbia, South Carolina
June 7
, 1995

For questions concerning this matter, please contact your local Taxpayer Service Center as follows:
Aiken
Beaufort
Charleston
Columbia
Florence

(803) 641-7685
(803) 524-2852
(803) 571-3000
(803) 737-4602
(803) 661-4850

Greenville
Myrtle Beach
Rock Hill
Spartanburg

5

(803) 241-1200
(803) 293-6550
(803) 324-7641
(803) 594-4900