SALT Report 2502 – Vermont recently enacted legislation that prohibits the sale, purchase, installation, transfer, or possession of automated sales suppression devices, zappers, and phantom-ware. Anyone found to be in violation will be held liable for the following:
- All taxes, interest, and penalties due as the result of the person’s use of an automated sales suppression device or phantom-ware, and
- All profits associated with sale of automated sales suppression devices or phantom-ware
If convicted, any person who violates the law will be subject to imprisonment for a minimum of one year and up to five years, a fine of up to $100,000, or both.
Furthermore, an automated sales suppression device or phantom-ware or any device containing such a device or software is considered contraband and is subject to seizure by the Commissioner of Taxes or by any law enforcement officer who the Commissioner of Taxes authorizes to do so.
Vermont is offering a Safe Harbor, or amnesty, that will allow anyone that has possession of a zapper or phantom-ware the opportunity to turn it over to the Commissioner without fear of prosecution for violating the prohibition. To qualify for the safe harbor the person must, by October 1, 2013:
- Notify the Department of the person’s possession of the automated sales suppression device,
- Provide any information requested by the Department, including transaction records, software specifications, encryption keys, passwords, and other data, and
- Correct any under-reported sales tax records and fully pay any amounts previously owed
These provisions were effective April 29, 2013.
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