No electronic gaming establishments have yet filed for the proper permits in Sampson County, following action by the Board of Commissioners earlier this month officially modifying county zoning to allow such businesses in commercial districts.
There are electronic gaming businesses permitted in the county’s municipalities, which bring with them privilege license fees. No such tax can be levied in the county, as state statute does not allow for it.
Upon an initial request by Robert Cooper, the Board of Commissioners approved at its October meeting amending the county zoning ordinance to include electronic gaming as a special use in C-Commercial district. Commissioners declined to set minimum requirements for those gaming operations, electing to let the Planning Board consider specific conditions on a case-by-case basis.
It was a measure that commissioners were essentially forced to oblige, as state law does not prohibit such operations, however two electronic gaming operations did have to close their doors while the requisite action was approved by the board. After tabling the matter in September, the board went forward with the zoning change allowing for electronic gaming this month.
Planning director Mary Rose said this week that the two businesses have not filed permit applications to open back up.
“Not since (commissioners) have made that change,” Rose noted. “They haven’t submitted an application yet. I will probably be getting back in touch with them to make sure they know the change was made and that they would have to apply for a special use permit. Those two businesses shut down their operations and now we have to go back to those individuals and let them know.”
The two businesses were located at the vacated Doug’s Diner location on U.S. 421 North and on N.C. 242, just outside of Salemburg. While the diner building was being used primarily as an electronic gaming operation, the N.C. 242 location was a convenience store-type business that also had gaming terminals, Rose noted.
Commissioners actually expressed concern that they might be opening the floodgates for such operations as the county is prohibited from assessing the privilege license tax on them, contrary to its municipalities. Board attorney Annette Chancy Starling explained that counties do not have the authority at this time to tax this type of electronic gaming business. While a bill has been proposed, it has not been passed.
“I think that’s why we’re seeing some businesses move out of the city and into the county in some cases to avoid that tithe,” Starling told commissioners.
For now, that simply has not proved to be the case, with no businesses on the books and no cases yet to be heard by the planning board.
With the change, each request would have to provide a site-specific plan for their location approved by the Sampson County Planning Board, which would address any quality of life issues relevant to the site by placing additional conditions they see fit. Commissioners opted out of establishing minimum development requirements, so the planning board will consider any request on a case-by-case basis, taking into account the plans, as well as what the property owner, adjoining property owners and planning board members have to say.
If approved, the business can open up under whatever conditions have been set. While those conditions may vary, one thing is for certain as of now — they will not be subject to the additional tax.
“They will not be able to charge a privilege license fee,” said Rose.
Every person, firm or corporation engaging in a business activity, trade, service or profession is subject to a privilege license fee by local government, payments that cover the period from July 1 to June 30 each year. Over the last couple years, license fees for electronic gaming have become one of the highest assessed by some local governments as the state gives discretion to municipal boards as to how and what they will charge.
About two years ago, the city set a fee of $1,000 per machine. Earlier this year, Garland upped its fee of $200 per gaming terminal to $500. Around the same time, a vote in Roseboro to up theirs to $1,000 per machine deadlocked, so the fee has stayed at $750 per terminal.
The city of Clinton has one business that has 25 machines, another that has 30 and a few others scattered around with a total of about 20 machines total among them, according to city officials. In total, the city is expected to generate $105,000 from privilege license fees in 2012-13, the majority of which comes from fees on electronic gaming, which brings in $74,000 a year annually.
Shortly after instituting an increase in its electronic gaming fee, Garland saw a sizable rise in revenue taken in due to privilege license fees, thanks in large part to the gaming fee hike. While the fees would not be levied in the county’s jurisdiction, Rose said such businesses would still be monitored to ensure they had proper permits and were not in violation of the newly established ordinance.
With a huge amount of ground to cover, that presents a large task.
“We would have to send them a letter and explain the process by which they would have to apply,” Rose said. “That’s going to be our challenge — to make sure we identify those who are operating and notify them that they are going to need to have a permit.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at firstname.lastname@example.org.