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Arkansas Bans Tax Evasion Devices

  • Apr 16, 2013 | Gail Cole

 Vermont lawmaker explains that tax zappers are not mosquito zappers.

Arkansas lawmakers have passed a bill that criminalizes "certain activities relating to software and other devices and mechanisms that modify or falsify electronic records for the purpose of evading taxes." SB 718 is now Act 1076.

Under the new law:

"It is unlawful for a person to knowingly manufacture, sell, rent, lease, make available, purchase, install, transfer, possess, or use software or any other device or mechanism designed to falsify the electronic records of an electronic cash register or other point-of-sale system for the purpose of evading a tax due under Arkansas law."

Anyone convicted of such a crime is both "[g]uilty of a Class C felony" and "[l]iable for all taxes assessed by the Department of Finance and Administration …."

The new law takes effect 90 days after the end of the 2013 legislative session.

Vermont - Tax Zappers Don't Kill Mosquitos

Meanwhile, Vermont lawmakers are now considering a bill that would criminalize tax zappers.

Senator Dick Sears (D), sponsor of the bill, first needed to explain to his colleagues what a tax zapper is: "It is not a Taser, or a device that would shock you or cause you discomfort. It's not a thing that kills mosquitos, either."

The Vermont Tax Department defines a zapper as "an automated sales suppression device." As explained by the Rutland Herald, such devices allow the number of sales recorded to be artificially depressed but require customers to pay "full freight on the entire purchase, tax and all." The result? "The retailer…pockets sales tax that would otherwise funnel into the state treasury."

While no one yet knows how many such devices are being used in the state of Vermont, "Quebec police have uncovered 31 distinct software programs designed for compatibility with 13 different cash register devices." Sen. Sears notes that "Quebec has lost over $20 million in sales taxes."

The Vermont tax zapper bill has a "safe harbor" provision that "would allow tax cheats to voluntarily hand over their zappers -- and pay off back taxes they owe -- in exchange for immunity from criminal prosecution."

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.