South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

SCDOR vs. Scott Sheets, d/b/a S & S Amusements

South Carolina Department of Revenue

South Carolina Department of Revenue

Scott Sheets, d/b/a S & S Amusements

Nicholas P. Sipe, Esquire for Petitioner

James Griffin, Esquire for Respondent and

Greg Harris, Esquire for Respondent




This matter comes before me pursuant to a citation issued by the Department of Revenue ("Department") against Scott Sheets, d/b/a S&S Amusements for violating S.C. Code Ann.  12-21-2720(A)(3) (Supp. 1995), by operating a nonpayout type in-line pin game without the proper license at Porter's Quick Stop. After notice to the parties, a hearing was conducted on November 4, 1996.


Prior to the hearing, the parties stipulated to the following facts:

    1. The "Miss Nevada" machine is owned by Scott Sheets, d/b/a S&S Amusements.
    2. The "Miss Nevada" machine was in operation on April 4, 1996 at Porter's Quick Stop, 3601 Parris Bridge Road, Spartanburg, South Carolina, and had a valid and current Class II license displayed.
    3. The parties stipulated to the admission of Plaintiff's exhibits #1-5 and Respondent's exhibits #1-6, which were accepted.


I make the following findings of fact, taking into consideration the burden on the parties to establish their respective cases by a preponderance of the evidence and taking into account the credibility of the witnesses:

    1. This Division has subject matter jurisdiction in this case.
    2. Notice of the date, time, place and nature of the hearing was given to all parties.
    3. On April 4, 1996, during an inspection of Porter's Quick Stop, Revenue Officer Kermit Hines issued an administrative violation for operating the "Miss Nevada" (Serial #862632) without a Type III machine license.
    4. The Department inspected and photographed the Miss Nevada machine and in its Final Determination Letter dated July 17, 1996, the Department determined that the "Miss Nevada" is an in-line pin game machine and is required to have a Type III license.
    5. The "Miss Nevada" is a nonpayout pin table game. Specifically, it is an in-line pin table and it is equipped with levers or flippers that can be used to alter the course of the ball.
    6. Previously, the Department, through its Public Assistance Supervisor Michael W. Dawes, sent a letter dated July 28, 1995 to Frank McGuire Amusements in Rock Hill, South Carolina, stating that machines such as the "Miss Nevada" meet the definition of "Type II" machines as long as they have flippers.
    7. On August 8, 1995, the Department rescinded that letter stating that Mr. Dawes had incorrectly classified the "Miss Nevada."
    8. Mr. Joe Kirby, manager of the Department's Beaufort Office, was qualified as an expert in the area of the Department's licensing procedures for amusement machines.
    9. According to Mr. Kirby, the "Miss Nevada" should be classified as a Type III machine because it is a gambling type machine associated with prizes, as opposed to the Type II amusement type machines that are not associated with prizes.
    10. Pin ball machines can be classified as either Class II or Class III. Class II pinball machines are typically called "flipper" machines. They are considered amusement type machines. The machines are played by 1-4, 6 or 8 players. Each game costs between 25 - 50 cents per player. When the coins are deposited the machine will allow between three to five balls to be played. The balls are set into motion by the spring plunger. The object of the game is to keep the ball in play to achieve maximum points and bonus points. A replay feature is available contingent upon the number of points scored. There are a limited number of replays. Flippers are used to keep the ball in play to strike the pins or bumpers to score points.
    11. A Class III pinball machine does not have levers or flippers. A machine similar to the "Miss Nevada" without the flippers is commonly called a "bingo" machine by the revenue agents. In this machine, only one person may play. The player may deposit varying amounts of money which activate various features on the backboard and which determine the number of replays. The object of the game is to line up the balls in various positions which correspond to the number and positions on the backboard similar to the game Bingo. The balls are also set into motion by the spring plunger.
    12. Mr. Kirby had never seen a "bingo" machine with flippers until the "Miss Nevada". He would classify the "Miss Nevada" as a Class III machine whether it has flippers or not.
    13. The Department issued several Revenue Rulings thereby offering to the public its interpretation of the law regarding the classification of certain games and machines. Revenue Ruling 90-9 was utilized by the Department in issuing the letter to Frank McGuire Amusements which stated that the "Miss Nevada" type machines were Class II machines.
    14. In January 1996, the Department issued Revenue Ruling 96-2 which changed its interpretation. After the issuance of Revenue Ruling 96-2, the "Miss Nevada" type machines are considered Class III machines.
    15. According to Mr. Kirby, Revenue Rulings are not used by field officers to classify game machines. Field officers of the Department use Technical Advise Memos issued by the Department as a guide to determine classifications. Technical Advise Memoranda are not available to the public. Revenue Rulings are disseminated to the public as general information.


Based upon the foregoing Findings of Fact, I conclude, as matter of law, the following:

    1. Pursuant to S. C. Code Ann.  12-4-30(D) (Supp. 1995) and Chapter 23 of Title 1 of the 1976 Codes, as amended, the South Carolina Administrative Law Judge Division has jurisdiction to hear this contested case.
    2. Pursuant to S. C. Code Ann.  12-21-2720(A)(2) (Supp. 1995), a Class II machine is:
      a machine for the playing of amusements or video games, without free play feature, or machines of the crane type operated by a slot in which is deposited a coin or thing of value and a machine for the playing of games or amusements, which has a free play feature, operated by a slot in which is deposited a coin or thing of value, and the machine is of the nonpayout pin table type with levers or "flippers" operated by the player by which the course of the balls may be altered or changed. A machine required to be licensed under this item is exempt from the license fee if an admissions tax is imposed.
    (emphasis added).
    3. Pursuant to S. C. Code Ann.  12-21-2720(A)(3) (Supp. 1995), a Class III machine is:
      a machine of the nonpayout type, in-line pin game, or video game with free play feature operated by a slot in which is deposited a coin or thing of value except machines of the nonpayout pin table type with levers or "flippers" operated by the player by which the course of the balls may be altered or changed.
    (emphasis added).
    4. When the terms of the statute are clear and unambiguous, they must be applied according to their literal meaning. State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991). The clear and plain language of the statute establishes the criteria to determine classification. The "Miss Nevada" is an in-line pin game; however, it is also a machine, with a free play feature, and is of the nonpayout pin table type with levers or "flippers" operated by the player by which the course of the balls may be altered or changed. The "Miss Nevada" is expressly excluded from the Type III machine classification.
    5. Revenue Ruling 90-9 applies to coin operated devices and interprets S.C. Code  12-21-2720 and 12-21-2730. This ruling distinguishes between pin tables with levers and in-line pin games without levers. It classifies pin tables with levers as Class II machines under Code Section 12-21-2720(2), and in-line pin games without levers as Class III machines under Code Section 12-21-2720(3). The Revenue Ruling acknowledges that both machines (pin tables with levers and in-line pin game without levers) are pinball machines, one with levers or "flippers" and one without levers or "flippers". SC Revenue Ruling #90-9 at p.4.
    6. Revenue Ruling 90-9 was in effect and contained the Department's policy and interpretation in 1995 when the machine was licensed.
    7. In 1996, the Department issued Revenue Ruling 96-2. This revenue ruling addressed the identical issues raised in Revenue Ruling 90-9 and renders the same interpretation, except Revenue Ruling 96-2 classifies all in-line pin games as Class III, irrespective of levers or flippers.
    8. Revenue Rulings are "the Department's official advisory opinion of how laws administered by the Department are to be applied to a specific issue . . . and as guidance for all persons or a particular group." See Revenue Ruling 96-2 and 90-9. The Respondent can and should reasonably rely on this information that is disseminated to the public.
    9. The Department urges that its longstanding interpretation of the "bingo" machine as a Class III should be given great deference and that Revenue Ruling 96-2 correctly states the Department's longstanding practice.
    10. Where the construction of the statute has been uniform for many years in administrative practice, and has been acquiesced in by the General Assembly for a long period of time, such construction is entitled to weight, and should not be overruled without cogent reasons. Etiwan Fertilizer Co. v. S.C. Tax Comm'n, 217 S.C. 354, 60 S.E.2d 682 (1950) (citing City of Spartanburg v. Leonard, 180 S.C. 491, 186 S.E. 395 (1936)). For approximately six years, the Department continually classified pin tables with levers as Class II machines. The "Miss Nevada" meets this criteria.
    11. Administrative interpretations of statutes by the agency charged with their administration and not expressly changed by the legislative body are entitled to great weight. Marchant v. Hamilton, 279 S.C. 497, 309 S.E.2d 781 (1983). The legislature has had ample opportunity to change the Department's interpretation of the law as contained in Revenue Ruling 90-9. It has not amended the statute to reflect any changes. If the Department has encountered a change in the coin-operated machines industry that it feels is contrary to the intent of the General Assembly in regulating this area, it should seek the appropriate change through legislative action.
    12. Machines must be licensed before placement or operation in a licensed establishment pursuant to S.C. Code Ann.  12-21-2778 (Supp. 1995). The Miss Nevada was so licensed by the Department.
    13. S.C. Code Ann.  12-21-2738 (Supp. 1995) sets out the penalties for failure to comply with the terms and provisions of Article 19 dealing with coin-operated machines and devices and other amusements. The Department has not demonstrated that the Respondent has violated Article 19, therefore, no penalty should be assessed.


Based upon the foregoing Findings of Fact and Conclusions of Law, the Department of Revenue and Taxation improperly issued a citation against the Respondent Scott Sheets, d/b/a S&S Amusements. IT IS ORDERED, that the citation and violation are dismissed.


Administrative Law Judge

November _____, 1996
Columbia, South Carolina

Brown Bldg.






Copyright © 2022 South Carolina Administrative Law Court