A bill moving through the Senate Judiciary Committee this week would create criminal penalties for restaurants and retail stores that are caught skimming cash to evade tax officials. Software programs called zappers have a computer program that alter cash registers’ memory to balance the registers and hide theft. This type of tax fraud has traditionally been done by keeping two sets of books or throwing away paper receipts. Modern day cash registers make automated records, so hiding the theft now requires getting to the machine’s memory. This bill would make zappers illegal and impose penalties for sale and possession of zappers or other sales suppression software.
The National Restaurant Association estimated in 2011 that zappers cost Minnesota approximately $41.2 million in lost tax revenue from 9,767 restaurants in the state, with an additional $17.8 million lost from convenience stores. Zapper sale or possession has been made illegal in 16 other states. (SF 1655)