For purposes of the Mechanical Amusement Device Tax Act, unless the context otherwise requires:

(1) Cash device means any mechanical amusement device capable of awarding (a) cash, (b) anything redeemable for cash, (c) gift cards, credit, or other instruments which have a value denominated by reference to an amount of currency, or (d) anything redeemable for anything described in subdivision (c) of this subdivision;

(2) Department means the Department of Revenue;

(3) Distributor means any person who places and who either directly or indirectly controls or manages a mechanical amusement device within a retail establishment within the State of Nebraska;

(4) Manufacturer means an individual, partnership, corporation, or limited liability company that manufactures, builds, rebuilds, fabricates, assembles, produces, programs, designs, or otherwise makes modifications to cash devices or associated equipment for use or play of cash devices;

(5)(a) Mechanical amusement device means any machine which, upon insertion of a coin, currency, credit card, or substitute into the machine, operates or may be operated or used for a game, contest, or amusement of any description, such as, by way of example, but not by way of limitation, pinball games, shuffleboard, bowling games, radio-ray rifle games, baseball, football, racing, boxing games, electronic video games of skill, and coin-operated pool tables. Mechanical amusement device also includes game and draw lotteries and coin-operated automatic musical devices.

(b) Mechanical amusement device does not mean vending machines which dispense tangible personal property, devices located in private homes for private use, pickle card dispensing devices which are required to be registered with the department pursuant to section 9-345.03, gaming devices or limited gaming devices as defined in and operated pursuant to the Nebraska Racetrack Gaming Act, or devices which are mechanically constructed in a manner that would render their operation illegal under the laws of the State of Nebraska;

(6) Net operating revenue means the dollar amount collected by a distributor or operator of any cash device computed pursuant to applicable statutes, rules, and regulations less the total of cash awards paid out to players by the cash device as described in subdivision (1) of this section;

(7) Operator means any person who operates a place of business in which a mechanical amusement device owned by him or her is physically located;

(8) Person means an individual, partnership, limited liability company, society, association, joint-stock company, corporation, estate, receiver, lessee, trustee, assignee, referee, or other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination of individuals; and

(9) Whenever in the Mechanical Amusement Device Tax Act the words electronic video games of skill, games of skill, or skill-based devices are used, they refer to mechanical amusement devices which produce an outcome predominantly caused by skill and not chance.

(1) Any operator shall be required to procure an annual license from the Tax Commissioner permitting him or her to operate mechanical amusement devices within the State of Nebraska. The Tax Commissioner, upon the application of any person, may issue a license, except that if the applicant (a) is not of good character and reputation in the community in which he or she resides, (b) has been convicted of or has pleaded guilty to a felony under the laws of the State of Nebraska, of any other state, or of the United States, or (c) has been convicted of or has pleaded guilty to being the proprietor of a gambling house, or of any other crime or misdemeanor opposed to decency and morality, no license shall be issued. If the applicant is a corporation whose majority stockholders could not obtain a license, then such corporation shall not be issued a license. If the applicant is an individual, the application shall include the applicant's social security number. Procuring a license shall constitute sufficient contact with this state for the exercise of personal jurisdiction over such person in any action arising out of the operation of mechanical amusement devices in this state.

(2)(a) Except for an applicant that holds a liquor license under the Nebraska Liquor Control Act, an applicant for a license as an operator of a cash device shall be subject to a one-time background check by the department prior to the issuance of a license. An applicant shall pay the costs associated with the background check along with any required fees as determined by the department.

(b) The Tax Commissioner has the authority to deny any application for a license as an operator of a cash device for cause. Cause for denial of a license application includes instances in which the applicant individually, or in the case of a business entity, any officer, director, employee, or limited liability company member of the applicant or licensee other than an employee whose duties are purely ministerial in nature:

(i) Violated the provisions, requirements, conditions, limitations, or duties imposed by the Mechanical Amusement Device Tax Act or any rules or regulations adopted and promulgated pursuant to the act;

(ii) Knowingly caused, aided, abetted, or conspired with another to cause any person to violate any of the provisions of the act or any rules or regulations adopted and promulgated pursuant to the act;

(iii) Obtained a license or permit under the act by fraud, misrepresentation, or concealment;

(iv) Has been convicted of, forfeited bond upon a charge of, or pleaded guilty or nolo contendere to any offense or crime, whether a felony or a misdemeanor, involving any gambling activity or fraud, theft, willful failure to make required payments or reports, or filing false reports with a governmental agency at any level;

(v) Denied the department or its authorized representatives, including authorized law enforcement agencies, access to any place where activity required to be licensed under the act is being conducted or failed to produce for inspection or audit any book, record, document, or item required by law, rule, or regulation;

(vi) Made a misrepresentation of or failed to disclose a material fact to the department;

(vii) Failed to prove by clear and convincing evidence such applicant's qualifications to be licensed in accordance with the act;

(viii) Failed to pay any taxes and additions to taxes, including penalties and interest required by the act or any other taxes imposed pursuant to the Nebraska Revenue Act of 1967; or

(ix) Has been cited for a violation of the Nebraska Liquor Control Act and had a liquor license suspended, canceled, or revoked by the Nebraska Liquor Control Commission for illegal gambling activities on or about the premises licensed by the commission pursuant to the Nebraska Liquor Control Act or the rules and regulations adopted and promulgated pursuant to such act.

(c) No renewal of a license issued pursuant to this section shall be issued when the applicant for renewal would not be eligible for a license upon a first application.

(3) The Tax Commissioner has the authority to suspend or revoke the license of any operator that is in violation of the Mechanical Amusement Device Tax Act.

(4) Beginning on the implementation date designated by the Tax Commissioner pursuant to subsection (2) of section 9-1312, prior to the winnings payment of any cash device winnings as defined in section 9-1303, an operator of a cash device shall check the collection system to determine if the winner has a debt or an outstanding state tax liability as required by the Gambling Winnings Setoff for Outstanding Debt Act. If such operator determines that the winner is subject to the collection system, the operator shall deduct the amount of debt and outstanding state tax liability identified in the collection system from the winnings payment and shall remit the net winnings payment of cash device winnings, if any, to the winner and the amount deducted to the Department of Revenue to be credited against such debt or outstanding state tax liability as provided in section 9-1306.

(1) Any distributor shall be required to procure an annual license from the Tax Commissioner permitting him or her to place and either directly or indirectly control or manage a mechanical amusement device within the State of Nebraska. The Tax Commissioner, upon the application of any person, may issue a license, subject to the same limitations as an operator's license under section 77-3002. If the applicant is an individual, the application shall include the applicant's social security number.

(2)(a) Except for an applicant that holds a liquor license under the Nebraska Liquor Control Act, an applicant for a license as a distributor of a cash device shall be subject to a one-time background check by the department prior to issuance of the license. An applicant shall pay the costs associated with the background check along with any required fees as determined by the department.

(b) The Tax Commissioner has the authority to deny any application for a license as a distributor of a cash device for cause. Cause for denial of a license application includes instances in which the applicant individually, or in the case of a business entity, any officer, director, employee, or limited liability company member of the applicant or licensee other than an employee whose duties are purely ministerial in nature:

(i) Violated the provisions, requirements, conditions, limitations, or duties imposed by the Mechanical Amusement Device Tax Act or any rules or regulations adopted and promulgated pursuant to the act;

(ii) Knowingly caused, aided, abetted, or conspired with another to cause any person to violate any of the provisions of the act or any rules or regulations adopted and promulgated pursuant to the act;

(iii) Obtained a license or permit under the act by fraud, misrepresentation, or concealment;

(iv) Has been convicted of, forfeited bond upon a charge of, or pleaded guilty or nolo contendere to any offense or crime, whether a felony or a misdemeanor, involving any gambling activity or fraud, theft, willful failure to make required payments or reports, or filing false reports with a governmental agency at any level;

(v) Denied the department or its authorized representatives, including authorized law enforcement agencies, access to any place where activity required to be licensed under the act is being conducted or failed to produce for inspection or audit any book, record, document, or item required by law, rule, or regulation;

(vi) Made a misrepresentation of or failed to disclose a material fact to the department;

(vii) Failed to prove by clear and convincing evidence such applicant's qualifications to be licensed in accordance with the act;

(viii) Failed to pay any taxes and additions to taxes, including penalties and interest required by the act or any other taxes imposed pursuant to the Nebraska Revenue Act of 1967; or

(ix) Has been cited for a violation of the Nebraska Liquor Control Act and had a liquor license suspended, canceled, or revoked by the Nebraska Liquor Control Commission for illegal gambling activities on or about the premises licensed by the commission pursuant to the Nebraska Liquor Control Act or the rules and regulations adopted and promulgated pursuant to such act.

(c) No renewal of a license issued pursuant to this section shall be issued when the applicant for renewal would not be eligible for a license upon a first application.

(3) Beginning January 1, 2025, the annual license for a distributor of a cash device shall be accompanied by a fee of one hundred dollars per cash device up to a maximum of five thousand dollars.

(4) The Tax Commissioner has the authority to suspend or revoke the license of any distributor that is in violation of the Mechanical Amusement Device Tax Act.

(5) Beginning on the implementation date designated by the Tax Commissioner pursuant to subsection (2) of section 9-1312, prior to the winnings payment of any cash device winnings as defined in section 9-1303, a distributor of a cash device shall check the collection system to determine if the winner has a debt or an outstanding state tax liability as required by the Gambling Winnings Setoff for Outstanding Debt Act. If such distributor determines that the winner is subject to the collection system, the distributor shall deduct the amount of debt and outstanding state tax liability identified in the collection system from the winnings payment and shall remit the net winnings payment of cash device winnings, if any, to the winner and the amount deducted to the Department of Revenue to be credited against such debt or outstanding state tax liability as provided in section 9-1306.

(1)(a) The Tax Commissioner or his or her agents or employees, at the direction of the Tax Commissioner, or any peace officer of this state may seize, without a warrant, any mechanical amusement device if there is cause to believe such mechanical amusement device is not in compliance with the Mechanical Amusement Device Tax Act or any rules and regulations adopted and promulgated under the act or if the department determines the response to a request for information is materially deficient without good cause. In addition to seizure, any person placing in service or operating a cash device constituting an illegal game of chance or an unlicensed cash device of any kind within this state shall be subject to a penalty of up to one thousand dollars for each day of such operation. The Tax Commissioner has the authority to suspend or revoke the license of any operator, manufacturer, or distributor of a cash device that is in violation of this section.

(b) For purposes of this subsection, a mechanical amusement device is subject to seizure and penalties as if it were a game of chance if:

(i) The mechanical amusement device is a cash device; and

(ii) The mechanical amusement device does not bear an unexpired decal as required under the Mechanical Amusement Device Tax Act.

(c) This section does not apply to any device (i) used in any bingo, lottery by the sale of pickle cards, or other lottery, raffle, or gift enterprise conducted in accordance with the Nebraska Bingo Act, Nebraska County and City Lottery Act, Nebraska Lottery and Raffle Act, Nebraska Pickle Card Lottery Act, Nebraska Small Lottery and Raffle Act, State Lottery Act, or section 9-701, (ii) used for a prize contest as defined in section 28-1101, (iii) specifically authorized by the laws of this state, or (iv) regulated under the Nebraska Racetrack Gaming Act.

(2) To receive a determination from the department that a cash device is in compliance with the Mechanical Amusement Device Tax Act and any rules and regulations adopted and promulgated under the act, a manufacturer or distributor of the device shall:

(a) Submit an application to the Tax Commissioner containing information regarding the device's location, software, Internet connectivity, and configuration as may be required by the Tax Commissioner;

(b) Submit an application fee of five hundred dollars;

(c) Provide a specimen of the proposed cash device;

(d) Provide all supporting evidence, including a report by an independent testing laboratory certified by the Tax Commissioner, to the Tax Commissioner indicating that, under all configurations, settings, and modes of operation, operation of the cash device constitutes a game of skill and not a game of chance and the use, operation, sale, or manufacture of the cash device would not constitute a violation of section 28-1107; and

(e) Provide an affidavit from the manufacturer or distributor affirming that no functional changes in hardware or software will be made to the approved cash device without further approval from the Tax Commissioner.

(3) The Tax Commissioner shall issue a response in writing to the applicant within forty-five days after the applicant has completed and submitted all application requirements. The Tax Commissioner's response shall state the reason for any denial or the reasons a determination cannot be made.

(4)(a) A cash device shall not be considered a game of skill if one or more of the following apply:

(i) The ability of any player to succeed at the game played on the cash device is impacted by the number or ratio of prior wins to prior losses of players playing such cash device;

(ii) The ability of the player to succeed at the game played on the cash device is impacted by the ability of any person to set a specified win-loss ratio for the cash device or by the cash device having a predetermined win-loss percentage;

(iii) The outcome of the game played on the cash device can be controlled by a source other than any player playing the cash device;

(iv) The success of any player is or may be determined by a chance event which cannot be altered by player action;

(v) There is no possibility for the player to win every game played on the cash device or there are unwinnable games or game modes on the cash device;

(vi) The ability of any player to succeed at the game played on the cash device requires the exercise of skill that no reasonable player could exercise; or

(vii) The primary determination of the prize amount is determined by the presentation or generation of a particular puzzle or group of symbols dealt to the player and the player does not have control over the puzzle or group of symbols presented.

(b) For purposes of this subsection, reasonable player means a player with an average level of intelligence, physical and mental skills, reaction time, and dexterity.

(5) The department or any court considering whether a gambling device is a game of skill may consider:

(a) The results of an analysis by the independent testing laboratory certified by the Tax Commissioner to evaluate the reaction time required for a player of a particular game on such cash device to perform the tasks required by the game to win; or

(b) The results of an analysis by the independent testing laboratory certified by the Tax Commissioner to evaluate factors set forth by the Tax Commissioner, other than reaction time, required for the player of a particular game on such cash device to perform the tasks required by the game to win.

(6) Factors which are not sufficient indications of a skill-based game include, but are not limited to:

(a) Whether a comprehensive list of prizes or outcomes is offered to the player or whether all outcomes are drawn from a finite pool of predetermined outcomes or starting positions;

(b) Whether a player can increase his or her chance of winning based on knowledge of probabilities in general or the probabilities of any particular prize or outcome in a game or on a cash device;

(c) Whether a player can simply choose not to play before committing money or credits; or

(d) A game task consisting solely of moving a symbol up or down, replacing one symbol with another, or any similar action, with or without a timer.

(7) Upon approval of an application based on a determination that the mechanical amusement device is a game of skill and not a game of chance, the Tax Commissioner shall issue a mechanical amusement device decal for the device as configured and as provided in subsection (8) of this section. No mechanical amusement device decal shall be issued for any cash device unless the department has determined that such cash device is a game of skill and not a game of chance and that the manufacture, sale, transport, placement, possession, or operation of such cash device does not constitute a violation of section 28-1107. If the Tax Commissioner does not approve the application for the cash device, the application shall be denied and the operator shall have the opportunity for an administrative hearing before the Tax Commissioner at which evidence may be presented on the issue of whether the cash device is specifically authorized by law and is not a gambling device as defined in section 28-1101. After such hearing, the Tax Commissioner shall enter a final decision approving or denying the application. The Tax Commissioner's final decision may be appealed, and the appeal shall be in accordance with the Administrative Procedure Act.

(8)(a) Upon approval of a specimen of a cash device as a game of skill under this section, the department may issue a mechanical amusement device decal for each such cash device:

(i) If certified by the manufacturer to be functionally identical in both hardware and software configurations to the specimen provided to the department; and

(ii) If the application fee described in subdivision (2)(b) of this section and the annual decal fee described in subdivision (c) of this subsection have been paid.

(b)(i) In order for a distributor or operator of a cash device to place a cash device into operation at a retail establishment, other than a retail establishment owned or operated by a fraternal benefit society organized and licensed under sections 44-1072 to 44-10,109 or a recognized veterans organization as defined in section 80-401.01, such retail establishment shall generate at least sixty percent of the gross operating revenue of such retail establishment from sources other than the total gross operating revenue of any cash devices located within the retail establishment.

(ii) The number of cash devices permitted at any retail establishment shall not exceed the lesser of either:

(A) Except for a fraternal benefit society organized and licensed under sections 44-1072 to 44-10,109 or a recognized veterans organization as defined in section 80-401.01, the number of cash devices it takes to generate forty percent of the gross operating revenue of the retail establishment; or

(B) Four cash devices, except that an establishment with over four thousand square feet may have one cash device for each one thousand square feet, up to a maximum of fifteen cash devices.

(c) The distributor or operator of a cash device shall pay an annual decal fee of two hundred fifty dollars to the department for each cash device in operation in Nebraska. The decal issued under this section shall be distinct from other decals issued by the department for mechanical amusement devices that are not required to be evaluated under this section. Regardless of the issuance of a decal by the department, no cash device shall be considered in compliance if it does not bear an unexpired decal in a conspicuous place.

(9) The application process described in this section shall not be construed to limit further investigation by the department or the issuance of further regulations to promote compliance after the application process is completed. At any point after a determination of skill by the department, the department may request from the manufacturer, distributor, or operator information about any cash device in operation in this state, including, but not limited to, information regarding currently operable source code, changes to software or hardware, and communications from or to the device over the Internet. A manufacturer, distributor, or operator that receives a request shall respond with all responsive information in its possession or control within fifteen business days.

(10) If a manufacturer or distributor receives a determination from the department that a cash device is not in compliance with the Mechanical Amusement Device Tax Act, such manufacturer or distributor shall have thirty days after the issuance of that determination to remove any such cash device from operation in Nebraska.

(11) Application fees collected under subsection (2) of this section and annual decal fees collected under subsection (8) of this section shall be remitted to the State Treasurer for credit to the Department of Revenue Enforcement Fund.

(1) No cash device shall be operated using a credit card, charge card, or debit card. No person under twenty-one years of age shall play or participate in any way in the operation of a cash device. No distributor, operator, or employee or agent of any distributor or operator shall knowingly permit any individual under twenty-one years of age to play or participate in any way in the operation of a cash device. The distributor, operator, or employee or agent shall verify the age of any individual requesting to play a cash device.

(2) No distributor or operator shall charge a fee or require a gratuity in return for the payment of any prize money won by a player of a cash device.

(3) The Tax Commissioner has the authority to suspend or revoke the license of any distributor or operator of a cash device for a violation of this section.

(4) The department shall adopt and promulgate rules and regulations for the implementation and enforcement of this section as long as such rules and regulations do not restrict how a cash device manufacturer, distributor, or operator markets or advertises the existence of a cash device, unless the advertiser or marketer of a cash device is willfully conflating the cash device play with casino-style gambling or slot machine wagering.

(1) A manufacturer of a cash device shall be required to procure an annual license from the Tax Commissioner permitting such manufacturer to place any cash devices in the State of Nebraska for sale, lease, or distribution through a third party. The Tax Commissioner, upon the application of any person, may issue a license subject to the same limitations as an operator's license under section 77-3002. If the applicant is an individual, the application shall include the applicant's social security number. The license fee for a manufacturer of a cash device shall be five thousand dollars.

(2)(a) Each applicant for a license as a manufacturer of a cash device shall be subject to a one-time background check by the department prior to the issuance of a license. An applicant shall pay the costs associated with the background check and any required fees as determined by the department.

(b) The Tax Commissioner has the authority to deny a license for a manufacturer of a cash device for cause. Cause for denial of a license application includes instances in which the applicant individually, or in the case of a business entity, any officer, director, employee, or limited liability company member of the applicant or licensee other than an employee whose duties are purely ministerial in nature:

(i) Violated the provisions, requirements, conditions, limitations, or duties imposed by the Mechanical Amusement Device Tax Act or any rules or regulations adopted and promulgated pursuant to the act;

(ii) Knowingly caused, aided, abetted, or conspired with another to cause any person to violate any of the provisions of the act or any rules or regulations adopted and promulgated pursuant to the act;

(iii) Obtained a license or permit under the act by fraud, misrepresentation, or concealment;

(iv) Has been convicted of, forfeited bond upon a charge of, or pleaded guilty or nolo contendere to any offense or crime, whether a felony or a misdemeanor, involving any gambling activity or fraud, theft, willful failure to make required payments or reports, or filing false reports with a governmental agency at any level;

(v) Denied the department or its authorized representatives, including authorized law enforcement agencies, access to any place where activity required to be licensed under the act is being conducted or failed to produce for inspection or audit any book, record, document, or item required by law, rule, or regulation;

(vi) Made a misrepresentation of or failed to disclose a material fact to the department;

(vii) Failed to prove by clear and convincing evidence such applicant's qualifications to be licensed in accordance with the act;

(viii) Failed to pay any taxes and additions to taxes, including penalties and interest required by the act or any other taxes imposed pursuant to the Nebraska Revenue Act of 1967; or

(ix) Has been cited for a violation of the Nebraska Liquor Control Act and had a liquor license suspended, canceled, or revoked by the Nebraska Liquor Control Commission for illegal gambling activities on or about the premises licensed by the commission pursuant to the Nebraska Liquor Control Act or the rules and regulations adopted and promulgated pursuant to such act.

(c) No renewal of a license pursuant to this section shall be issued when the applicant for renewal would not be eligible for a license upon a first application.

(3) The Tax Commissioner has the authority to suspend or revoke the license of any manufacturer of a cash device that is in violation of the Mechanical Amusement Device Tax Act.

(1) An occupation tax is hereby imposed and levied, in the amount and in accordance with the terms and conditions stated in this section, upon the business of operating mechanical amusement devices that are not cash devices within the State of Nebraska for profit or gain either directly or indirectly received. Every person who now or hereafter engages in the business of operating such mechanical amusement devices that are not cash devices in the State of Nebraska shall pay such occupation tax in the amount and manner specified in this section.

(2) Any distributor or operator of a mechanical amusement device that is not a cash device within the State of Nebraska shall pay an occupation tax for each such mechanical amusement device which he or she places into operation during all of the taxable year. The occupation tax shall be due and payable on January 1 of each year on each mechanical amusement device that is not a cash device in operation on that date, except that it shall be unlawful to pay any such occupation tax unless the sales or use tax has been paid on such mechanical amusement devices. For every mechanical amusement device that is not a cash device put into operation on a date subsequent to January 1, and which has not been included in computing the occupation tax imposed and levied by the Mechanical Amusement Device Tax Act, the occupation tax shall be due and payable therefor prior to the time the mechanical amusement device is placed in operation. All occupation taxes collected pursuant to the act shall be remitted to the State Treasurer for credit to the General Fund.

(3) The amount of the occupation tax shall be thirty-five dollars for each mechanical amusement device that is not a cash device for any period beginning on or after January 1, 2000, except that for such mechanical amusement devices placed in operation after July 1, and before January 1 of each year, the occupation tax shall be twenty dollars for each mechanical amusement device.

(1) The occupation tax levied and imposed by the Mechanical Amusement Device Tax Act shall be in addition to any and all taxes or fees, of any form whatsoever, now imposed by the State of Nebraska upon the business of operating or distributing mechanical amusement devices, except that payment of the tax and license fees due and owing on or before the licensing date of each year shall exempt any such mechanical amusement device from the application of the sales tax which would or could otherwise be imposed under the Nebraska Revenue Act of 1967. Nonpayment of the taxes or fees due and owing on or before the licensing date of each year shall render the exemption provided by this section inapplicable, and the particular mechanical amusement devices shall then be subject to all the provisions of the Nebraska Revenue Act of 1967, including the penalty provisions pertaining to the distributor or operator of such mechanical amusement devices.

(2) No political subdivision of the State of Nebraska shall levy or impose any tax on mechanical amusement devices in addition to the taxes imposed by the Mechanical Amusement Device Tax Act.

(1) The administration of the Mechanical Amusement Device Tax Act is hereby vested in the Tax Commissioner subject to other provisions of law relating to the Tax Commissioner. The Tax Commissioner may prescribe, adopt and promulgate, and enforce rules and regulations relating to the administration and enforcement of the act and may delegate authority to his or her representatives to conduct hearings or perform any other duties imposed under the act. The Tax Commissioner may adopt and promulgate rules and regulations necessary to carry out section 77-3003.01.

(2) The department has the authority to review all documents between a distributor, manufacturer, and operator regarding a cash device. Such documents shall include, but not be limited to, a contract, agreement, lease, revenue-sharing agreement, profit-sharing document, annual report, tax filing, or bill of sale.

(3) The department has the authority to approve all cash device locations across the state. No cash device shall be moved from such cash device's approved location without the prior approval of the department.

(4) The department shall establish retail establishment location standards required for the placement of any cash device in this state.

(5) The following factors shall be considered for the issuance of a license to operate a cash device at a particular retail establishment location:

(a) Whether there are physical walls separating a retail establishment operating a cash device from other businesses located in the same building;

(b) Whether there are dedicated entrances and exits to the retail establishment;

(c) Whether a separate sales tax permit has been obtained by the retail establishment;

(d) Whether the retail establishment has separate points of sale;

(e) Whether the retail establishment has separate points of ticket redemption;

(f) Whether there is diversity of merchandise for sale in the retail establishment;

(g) Whether the retail establishment issues a receipt for sales;

(h) The number of dedicated employees on duty at the same time at the retail establishment;

(i) The level of business activity being conducted in the retail establishment;

(j) Whether the physical space for the retail establishment within the building is contiguous to other businesses; and

(k) Whether there are distinct owners or officers of the retail establishment within the shared building.

(1) The payment of the occupation tax imposed by the Mechanical Amusement Device Tax Act shall be evidenced by a separate decal for each mechanical amusement device signifying payment of the tax, in a form prescribed by the Tax Commissioner.

(2) Every distributor or operator shall place such decal in a conspicuous place on each mechanical amusement device to denote payment of the tax for each device for the current year.

(1) Each distributor of a cash device shall pay taxes owed quarterly to be filed January 1, April 1, June 1, and October 1 of each calendar year. Such taxes required to be paid shall include income tax, occupation tax, and net operating revenue tax.

(2)(a) Each operator of a cash device shall pay income taxes on income generated by such cash device quarterly to be filed January 1, April 1, June 1, and October 1 of each calendar year.

(b) Each operator of a cash device shall pay occupation tax and net operating revenue tax for such cash device quarterly to be filed January 1, April 1, June 1, and October 1 of each calendar year if the operator is not subject to a revenue-sharing or other agreement with a distributor who is paying such taxes pursuant to subsection (1) of this section.

(3) Each distributor, operator, or employee or agent of any distributor or operator of a cash device shall provide an Internal Revenue Service Form 1099 to each player that wins a prize in excess of one thousand one hundred ninety-nine dollars from a cash device placed into operation by such distributor or operator. The department shall make this form available on the department's website.

(4) A distributor or manufacturer located outside the State of Nebraska shall pay income taxes in Nebraska on all income earned in Nebraska.

(1) Any distributor or operator who places a cash device into operation in the State of Nebraska without the necessary decal being placed conspicuously upon it or without having obtained the necessary license shall be subject to an administrative penalty of up to one thousand dollars per day for each unlicensed cash device.

(2) Any cash device which does not have the necessary decal conspicuously displayed upon it shall be subject to being sealed by the Tax Commissioner or his or her delegate. If such seal is broken prior to payment of the occupation tax upon such cash device, the cash device shall be subject to forfeiture and sale by the Tax Commissioner.

(3) Any person violating the Mechanical Amusement Device Tax Act shall be guilty of a Class II misdemeanor. Each day on which any person engages in or conducts the business of operating or distributing the mechanical amusement devices subject to the Mechanical Amusement Device Tax Act, without having paid the tax or obtained the required license as provided, shall constitute a separate offense.

(4) The department has the authority to levy an administrative penalty of up to one thousand dollars per day for any other violation of the act.

Prosecutions for any violations of the Mechanical Amusement Device Tax Act shall be brought by the Attorney General or county attorney in the county in which the violation occurs. Any prosecution for the violation of any of the provisions of the act shall be instituted within three years after the commission of the offense.

Sections 77-3001 to 77-3014 shall be known and may be cited as the Mechanical Amusement Device Tax Act.