Cash registers believed to be zapping away state revenue

[TexasTowelie]

JACKSON – Computerized cash registers, designed to hide total sales made by merchants, could be costing the state millions of dollars in revenue, Mississippi Revenue Commissioner Herb Frierson says.

The high tech registers, known as “zappers,” or automated sales suppression devices, allow merchants to hide some of their sales, thus costing the state a portion of the 7 percent tax it assesses on retail sales.

“The zapper has two sets of books. Al Capone (the Chicago gangster who was convicted of tax evasion) would have loved it,” Frierson said recently during testimony to legislators at the state Capitol. “It has one set of books for tax purposes and another (true set of books) if you want to sell your business.”

An article in Bloomberg, based on interviews with state revenue collectors and other tax experts, estimates that the zappers are costing the states $21 billion annually in revenue. The article goes on to estimate that the zapper software is being used in 30 percent of all electronic cash registers in the nation. The zappers are believed to be especially prevalent in the restaurant industry.

Read more: http://www.djournal.com/news/cash-registers-believed-to-be-zapping-away-state-revenue/article_590b4ab9-ca6d-5179-ba42-e5d06ef62846.html

[diva77]

1. K&R for exposure.

[thbobby]

2. Cheating at taxes is not new

I am so confused on how I feel about this.

I am guilty in actions, if not in law. I buy most of my durable goods on Amazon. Tax is part of the total cost. When I am faced with the choice of buying the product I want at an 8% or more cheaper price because of out of state supplier, I choose the cheaper option.

Sales tax is a tax that affects poor people more than rich. It is the same for both, and poor people are less able to afford it. When the rich do not pay their share of tax, how can the poor feel they should not strive to cheat where they can?

As far as the zapper registers, it seems to me there would be the ability to find and punish this. But again, people will cheat where and how they can. Perhaps if all were subject to the same taxation laws and the government used tax revenue to benefit the people it would be easier to feel a community responsibility to not cheat on taxes. Perhaps not. I do not know. I know when the rich pay less tax than their employees and the government uses taxes for war or 24 million dollar refrigerators or private jet travel for corrupt officials, I do not feel guilty avoiding sales tax on Amazon.

[flotsam]

3. And neither is this scam

"In 1993, Stew Leonard, Sr. was convicted of having committed tax fraud via an elaborate scheme to divert more than $17.1 million in cash register receipts over a 10-year period.[16][17][7] The fraud, which involved a computer program designed to skim off sales, was directed by Stew Leonard, Sr., in concert with the company's CFO and store manager. Skimmed cash was placed in bundles in Leonard, Sr.'s office fireplace, to be later moved offshore or disguised as gifts.[18][19] Leonard, Sr. was caught in June 1991 carrying $80,000 cash en route to the island of Saint Martin.[18][20]

Leonard, Sr. pled guilty to the charges and, in 1993, was sentenced to 52 months in prison.[21][7] He ultimately served 44 months before being released in June 1997.[22]"

https://en.wikipedia.org/wiki/Stew_Leonard%27s

[More_Cowbell]

4. Depending on where you live, you're required to pay use tax if you didn't pay sales tax

Many states, like my California, require you to pay the equivalent use tax if you didn't pay sales tax. In CA we report it on our personal income tax forms.

Choosing an out-of-state seller doesn't constitute "avoiding" the tax, but not reporting it to your own state does.

I agree with your point that sales tax is a regressive tax.

[marble falls]

5. The first bar I worked at in the early '70's had three registers - two with tapes, one without....

later I worked at places that used a register for cash only transactions, and the other registers used for cash, credit, checks. Businesses that get cash are notorious for skimming in the hospitality industry. There are other tax dodging tricks my bosses have used, too. Businesses dodge taxes, no new news there.