West Virginia – Tax Suppression Software

SALT Report 1494 – The West Virginia Senate passed a bill that makes it unlawful to sell, purchase, install, transfer, or possess electronic cash register sales suppression devices or “phantom-ware” that is designed to misrepresent or falsify transaction records.
The new bill, SB 411, defines phantom-ware as a hidden, preinstalled, or after-market program that is embedded or hardwired into the operating system of a cash register and is used to either make a virtual second till or to eliminate or manipulate the transaction data in the cash register.
Automated sales suppression devices or zappers are defined as a software program, carried on a memory stick or a removable compact disc that is used to falsify the records of cash registers and other point-of-sale systems, including electronic records such as transaction data and transaction reports.
Transaction data is defined as the items purchased by a customer, the price paid for each item, the taxability of each item, the taxable amount for each of the items sold, the amount of cash or credit tendered, the amount of change given to the customer, the time and date of the sale, the receipt or invoice number of the transaction, and the vendor’s name, address, and identification number.
Anyone convicted of owning or possessing one of these devices will be charged with a felony and will face up to five years in jail, a fine of up to $100,000, or both. Also, those who violate this law will forfeit any profits derived from the devices and will be liable for any taxes and penalties owed to the state.
The automated sales suppression devices and phantom-ware described above, along with any cash register containing such devices, is considered contraband and will be subject to seizure and destruction by any law enforcement agency in West Virginia, including the State Tax Department’s Criminal Investigation Division.
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