Senate tax committee advances sales-tax exemption for bowling centers after narrowing amendment

The Senate Assessment and Taxation Committee voted to recommend favorable passage of Senate Bill 26 after adopting an amendment that narrowed the measure’s scope.

The bill would add a new subsection to 79-3606 to exempt “materials, machinery and equipment purchased by [a] bowling center or bowling alley for commercial use and used directly in the game of bowling,” including machinery such as automatic pinsetters and ball returns, according to the amendment text presented in committee.

Committee staff member Amelia introduced the bill, saying it would “provide a sales tax exemption for certain purchases by bowling centers” and offered to answer questions. Senator (mover) then proposed an amendment that the committee described as a condensation that “really talk[ed] about materials machinery and kind of highlight that as, items we should be exempting.” The amendment lists exempt items as automatic pin setters, ball returns and other equipment “used directly in the game of bowling.”

The amendment was moved (recorded in the transcript as moved by a senator) and seconded by Senator Schallenberger. The committee approved the amendment by voice vote; the clerk recorded the motion as carrying.

Following brief debate about whether the amendment singled out one industry, Senator Ware said he was concerned about precedent: “Is it why are we picking 1 specific little industry and saying, sure, here's a benefit to you?” An exchange with staff and other senators stressed that requests for targeted exemptions are common in the committee.

Kathleen Smith of the Department of Revenue told the committee that sales-tax treatment of machinery and equipment is complex and varies by industry. “Most service businesses pay tax on their machinery equipment…farmers do not pay, tax on their machinery and equipment and manufacturing businesses,” Smith said, noting the differences between sales-tax and property-tax treatment.

After adopting the amendment, Senator Peck moved that the committee pass SB 26 and recommend it favorable for passage as amended; Senator Tyson seconded. The motion was approved by voice vote.

No roll-call tally was recorded in the transcript; the committee approved both the amendment and the final recommendation by voice votes.

The committee then recessed business and moved on to the next agenda item.