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Michigan Governor Signs Tax Zapper Law

  • May 31, 2012 | Susan McLain

Michigan Senate Bills 768 and 769, known as “Tax Zapper” laws, have been signed into law by Governor Rick Snyder.

Tax Zappers are automated sales suppression devices that are used to skim cash sales and evade taxes. Sponsored by Senator John Pappageorge, the bills “…make it a felony to knowingly sell, purchase, install, transfer, or possess such devices.”

Senator Pappageorge said, “Last year, it is estimated that Michigan lost $740 million in tax revenues due to zapper use. This is money that could be going to schools, roads and municipalities.”

Individuals or businesses found in possession [of], manufacturing, or [selling] an automated sales suppression device…” are subject to the following penalties:

  • “Imprisonment for not less than one year or more than five years;
  • A possible fine of not more than $100,000; and
  • Legal responsibility for all taxes and penalties due the state resulting from automated sales suppression devices.”

Michigan’s bill comes on the heels of a major zapper case where “…the owners purportedly ‘zapped’ more than $20 million in sales over a 4-year period and allegedly sent the money to Hezbollah in Lebanon. One owner reportedly fled overseas and remains a fugitive from the U.S. authorities.”

Tax Zappers have been in the news quite a bit and gaining the attention of more and more states who realize they need to make the software and equipment illegal in order to prosecute:

Senator Pappageorge expresses his feelings on why this legislation was important, “…we cannot stand idly by as the hard-working citizens of Michigan are potentially bilked out of hundreds of millions of dollars they believe are going to schools, roads and the like.” He expressed that he wished such legislation was not necessary.

The law goes into effect immediately.

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”