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Washington State Looking to Criminalize Tax Zappers

  • Apr 22, 2013 | Gail Cole

 Before tax zappers.

Update, 8.20.2013: Governor Inslee signed SB 5715 on May 20, outlawing the use of automated sales suppression devices in Washington state.

It’s hard to find someone who will stand up in defense of tax zappers. Software that is designed to help businesses underreport taxable sales—and thus pocket unreported sales tax—has been criminalized by more than a dozen states, including Arkansas, Connecticut, Louisiana, Maine, Michigan, and Tennessee. Vermont is considering criminalizing tax zappers this session, and other states are expected to follow suit.

Recently, Washington state lawmakers passed a bill that would make it “a class C felony to commit tax fraud using automated sales suppression software.” Senate Bill 5715 found unanimous support in both the House and the Senate, and now awaits Governor Jay Inslee’s (D) signature.

Under the legislation, “persons convicted of selling, installing, or designing zappers will be subject to an additional mandatory fine that is the greater of $10,000 or the amount of tax that the retailer didn’t pay.” In addition, the bill would grant the Department of Revenue the authority to “revoke the business licenses of any business found using such devices.” Those businesses could be reinstated if they agree to “five years of electronic monitoring.”

According to an expert on the devious devices, some “30 percent of the predominantly cash businesses in the states are using tax zappers.” Carol K. Nelson, director of the Washington state DOR, reminds that “[c]ustomers have the right to expect the sales tax they pay to be returned to them in the form of state and local services such as schools and law enforcement.”

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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.