North Carolina and Fayetteville Serious about Taxes on Sweepstakes Parlors !

Fayetteville seizes property from sweepstakes firms that owe privilege license fees
Published: 06:47 AM, Wed Dec 14, 2011 The Fayetteville Observer

The city of Fayetteville has taken the unusual step of seizing furniture, computers and other property from two Internet sweepstakes businesses that the city said each owed more than $200,000 in privilege license fees. At the request of The Fayetteville Observer, city spokeswoman Jennifer Lowe on Tuesday identified the two businesses as SWAT Gaming Group at 664 Country Club Drive and 777 Sweepstakes at 6257 Raeford Road. Lowe said SWAT Gaming owed more than $238,000 in delinquent license fees, and 777 Sweepstakes owed more than $200,000.
City officials said police officers accompanied city employees with a moving truck when they took the property from inside the businesses, sometime within the past month. Lowe said the seized property will be sold. The city plans to target other businesses with the highest amounts of delinquent privilege license fees. The fees are an annual tax charged to many entities that do business in the city limits.
Efforts to reach someone at the sweepstakes businesses were unsuccessful. Last year, the city began charging fees of $2,000 per sweepstakes cafe and $2,500 for each computer terminal. The fees add up for owners with multiple terminals. Other cities also have levied hefty licensure fees against the gaming businesses, which have sprung up in old storefronts and strip centers.
At the gambling businesses, customers can buy Internet or phone time to play variations of card and number games on computer terminals. Their purchased time gives them chances to win cash prizes.
Fayetteville City Attorney Karen McDonald said state law gives cities broad authority to enforce the collection of license fees. One way is seizing property, she said. "The city is aggressively pursuing the collection of privilege license fees," McDonald said. McDonald said seizing property from a delinquent business owner doesn't require a warrant or court action. The city is taking the action only after other attempts to collect the money have failed, including warning letters, she said. The action is not unprecedented. The city seized property for similar reasons in the early 2000s, McDonald said.
Other remedies cities can use to collect privilege license fees from business owners, she said, are through attachments of bank accounts, garnishments of state tax refunds and lottery winnings. In city warning letters, delinquent business owners are told that "failure to pay a privilege license could result in the issuance of a criminal citation." McDonald described the seizures under police escorts as a "levy" and "a last resort" to collect a tax that was six months past due. She said it would be incorrect to describe the actions as raids.