SALT Report 2510 – The Washington Department of Revenue announced that Governor Jay Inslee signed a Bill that penalizes any business involved in the distribution or use of “zapper” software. This type of software erases sales from cash registers so retailers can avoid reporting the sales tax that they collect from their customers.
The new law makes it illegal to “sell, purchase, install, transfer, manufacture, create, design, update, repair, use, possess, or otherwise make available” software or hardware that deletes sales transactions so that those sales can’t be tracked by auditors and compared to reported sales. Therefore, anyone found using this type of software will be charged with a “class C felony to commit electronic tax fraud.”
Currently, retailers are subject to felony charges if they fail to remit sales tax however, in addition to the felony charge, anyone who manufactures, provides, or services zappers will be subject to a mandatory fine of $10,000 or the amount of tax that wasn’t paid, whichever is greater.
The new law also authorizes the Department of Revenue to revoke the business licenses of any business found using any of these devices and will not reinstate a business unless it agrees to five years of electronic monitoring.
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