Hanover’s amusement tax debate heads into bonus round


By Andrew Staub | PA Independent

HANOVER, Pa. — Brandon Spencer left Wednesday night’s borough council meeting baffled.

That’s because the meeting offered no definitive answer to the question of whether Spencer’s TimeLine Arcade is subject to the borough’s amusement tax. Instead, the borough council delayed changes to its 40-year-old ordinance, leaving Spencer wondering if officials simply don’t know how to handle the situation.

“How long can you drag something out?” Spencer asked afterward.

Spencer’s found himself at odds with the borough through the summer and into fall after officials sent him a $5,400 amusement tax bill. Borough code subjects all coin-operated amusement devices to a $50 annual fee, and with 130-plus machines at Spencer’s downtown arcade, it’s easy to see how costs escalate.

MAKING HIS CASE: Brandon Spencer, the owner of TimeLine Arcade, speaks the Hanover Borough Council during their Wednesday night meeting.

But there’s a catch. Spencer’s arcade games don’t accept coins. Instead, customers pay a flat rate per every half-hour of play. That’s spurred Spencer’s fervent belief that the amusement tax doesn’t apply, given that the ordinance specifically says “coin-operated” amusement devices.

The council cut Spencer’s bill to $2,000 on Wednesday, but tabled a motion that would have reduced the fee to $25 a machine and refined the ordinance “to accommodate the modern definition of amusement device to include revised payment options for the previously designated coin-operated device.”

The same motion would cap the amusement tax at $2,000 per business, the basis for the council’s decision to reduce Spencer’s bill from this year. Postponing the changes will allow the borough to research how other municipalities handle amusement taxes, Councilman James Roth said

“I don’t think it’s fair the way it is right now,” Roth said of Hanover’s ordinance.

While Spencer wouldn’t say whether or not he’d pay the bill — just that he would “re-visit” the issue — he stuck to his belief the words “coin-operated” protect him.

Borough officials see the debate through a different prism, one in which the overall intent of the law supersedes outdated definitions of amusement devices. While Spencer’s games might not take quarters, they’re still the same machines from decades ago, Roth said.

For now, the language of the law hasn’t caught up to the modern times when council members use high-tech tablets during meetings and residents can follow the agenda on flat-screen televisions. It’s causing friction between the council and Spencer, a businessman who’s taking a risk in an effort to wake Hanover’s sleepy downtown.

Gary Laird, president of the Hanover Area Chamber of Commerce, told the council the arcade has been a “catalyst” for downtown, attracting people from outside the area and drawing foot traffic to nearby businesses.

Laird requested the council repeal or modify the ordinance so it doesn’t burden the arcade. Other businesses use arcade games for supplemental income, but Spencer’s operation is different, Laird said.

“For TimeLine Arcade, it is their primary source of income and certainly the heart of their livelihood,” Laird said.

SEARCHING FOR EQUITY: Councilman Jim Roth wants the borough’s ordinance to be fair for everyone, including Spencer.

While changes could come later, there’s still the issue of the 2014 tax bill. Roth said waiving Spencer’s bill would be unfair to businesses that have already paid this year’s tax. And retroactively eliminating the tax would also mean refunding others, he said.

“Everybody else paid it,” said Barb Krebs, the borough manager.

While some council members would prefer to just eliminate the tax and move on, Wednesday’s meeting made it clear that won’t happen. As the council studies other towns, Spencer will have to wait, knowing that even a revised ordinance with a $25 annual fee would hurt him far more than the local pizza shop that still has a Pac-Man game in the corner.

“They’re going to try to change the wording to kill me,” he said before the council meeting. “That’s the way it works.”

Staub can be reached at Andrew@PAIndependent.com. Follow @PAIndependent on Twitter for more.