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Kentucky Bans Tax Zappers

  • Apr 2, 2014 | Gail Cole

 Zap. Kentucky criminalizes the use of tax zappers.

Kentucky is the latest state to officially criminalize the use of tax zappers or phantom-ware. Anyone found guilty of possessing or using business record falsification devices will be convicted of a Class D felony and have their sales tax permit revoked for a period of ten years.

Lest there be any confusion over what constitutes the felony, the new law reads:

“A person is guilty of possession of an automated business record falsification device when he or she knowingly possesses any device or software program that falsifies the business records created by a point-of-sale system, such as any electronic device or computer system that keeps a register or supporting documents designed to record retail sales transaction information, by eliminating or manipulating true retail sales transaction information in order to represent a false record of transactions. These devices may also be referred to as ‘zappers’ or ‘phantom-ware.”

In addition to being convicted of a Class D felony, persons found guilty of using phantom-ware will suffer the following consequences:

  • All proceeds associated with the tax zapper’s creation, sale, or usage shall be forfeited;
  • Each permit held by the convicted person shall be revoked for a period of ten years by the Kentucky Department of Revenue; and
  • The authorities will take the zapper.

Kentucky’s new tax zapper law takes effect 90 days after adjournment.

Other states that have made it illegal to use sales tax suppression devices include:

Don’t try to suppress sales tax. Switch to an automated sales tax solution and remain on the right side of the law.

photo credit: *Amanda Richards via photopin cc

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.