Amended in Senate July 9, 2013

Amended in Assembly April 18, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 781


Introduced by Assembly Member Bocanegra

February 21, 2013


An act to add Sections 7153.6 and 55363.5 to the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 781, as amended, Bocanegra. Sales and use taxes: fees: administration: violations for noncompliance: sales suppression devices.

Existing law requires the payment ofbegin insert sales and useend insert taxes,begin insert and specified taxes,end insert fees, and surcharges that are administered by the State Board of Equalization under the provisions of the Sales and Use Tax Law and the Fee Collection Procedures Law,begin delete as prescribedend deletebegin insert respectivelyend insert.

This bill would, under those laws, provide that a person whobegin delete knowinglyend deletebegin insert purchases, installs, or uses in this state any automated sales suppression device or zapper or phantom-ware with the intent to defeat or evade the determination of an amount due or collected pursuant to those laws is guilty of a misdemeanor, and would provide that any person who, for commercial gain,end insert sells, purchases, installs, transfers,begin delete possesses, or usesend deletebegin insert or possessesend insert in this state any automated sales suppression device or zapper or phantom-warebegin insert with the knowledge that the sole purpose of the device is to defeat or evade the determination of an amount due or collectedend insert is guilty of an offense punishable by a fine, imprisonment, or both, as specified. This bill would also provide that the person is liable for all taxes, interest, and penalties due as the result of the use of an automated sales suppression device or zapper or phantom-ware. By creating a new crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 7153.6 is added to the Revenue and
2Taxation Code
, to read:

3

7153.6.  

(a) Notwithstanding any other provision of this part,
4begin delete aend deletebegin insert any person who purchases, installs, or uses in this state any
5automated sales suppression device or zapper or phantom-ware
6with the intent to defeat or evade the determination of an amount
7due pursuant to this part is guilty of a misdemeanor.end insert

8begin insert(b)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insertbegin insertAnyend insert person whobegin delete knowinglyend deletebegin insert, for commercial gain,end insert sells,
9purchases, installs, transfers,begin delete possesses, or usesend deletebegin insert or possessesend insert in
10this state any automated sales suppression device or zapper or
11phantom-warebegin insert with the knowledge that the sole purpose of the
12device is to defeat or evade the determination of an amount due
13pursuant to this partend insert
is guilty of an offense punishable by a fine
14begin delete of not more than ten thousand dollars ($10,000)end deletebegin insert as specified in
15paragraph (2)end insert
, by imprisonment in a county jail for not more than
16one year, or, pursuant to subdivision (h) of Section 1170 of the
17Penal Code, for 16 months, orbegin delete two,end deletebegin insert twoend insert or three years, or by both
18that fine and imprisonment. In addition, any person who uses an
19automated sales suppression device or zapper or phantom-ware
20shall be liable for all taxes, interest, and penalties due as a result
21of the use of that device.

begin insert

22(2) (A) Where a person is guilty of the offense described in
23paragraph (1) and the person sold, installed, transferred, or
24possessed three or fewer automated sales suppression devices or
25zappers or phantom-ware, that person shall be guilty of an offense
26punishable by a fine of not more than five thousand dollars
27($5,000).

end insert
begin insert

P3    1(B) Where a person is guilty of the offense described in
2paragraph (1) and the person sold, installed, transferred, or
3possessed more than three automated sales suppression devices
4or zappers or phantom-ware, that person shall be guilty of an
5offense punishable by a fine of not more than ten thousand dollars
6($10,000).

end insert
begin delete

7(b)

end delete

8begin insert(c)end insert For purposes of this section:

9(1) “Automated sales suppression device” or “zapper” means
10a software program carried on a memory stick or removable
11compact disc, accessed through an Internet link, or accessed
12through any other means, that falsifies the electronic records of
13electronic cash registers and other point-of-sale systems, including,
14but not limited to, transaction data and transaction reports.

15(2) “Electronic cash register” means a device that keeps a
16register or supporting documents through the means of an
17electronic device or computer system designed to record transaction
18data for the purpose of computing, compiling, or processing retail
19sales transaction data in whatever manner.

20(3) “Phantom-ware” means a hidden, preinstalled, or installed
21at a later time programming option embedded in the operating
22system of an electronic cash register or hardwired into the
23electronic cash register that can be used to create a virtual second
24till or may eliminate or manipulate transaction records that may
25or may not be preserved in digital formats to represent the true or
26manipulated record of transactions in the electronic cash register.

27(4) “Transaction data” includes information regarding items
28purchased by a customer, the price for each item, a taxability
29determination for each item, a segregated tax amount for each of
30the taxed items, the amount of cash or credit tendered, the net
31amount returned to the customer in change, the date and time of
32the purchase, the name, address, and identification number of the
33vendor, and the receipt or invoice number of the transaction.

begin insert

34(d) This section shall not preclude prosecution under any other
35law.

end insert
36

SEC. 2.  

Section 55363.5 is added to the Revenue and Taxation
37Code
, to read:

38

55363.5.  

(a) Notwithstanding any other provision of this part,
39begin delete aend deletebegin insert any person who purchases, installs, or uses in this state any
40automated sales suppression device or zapper or phantom-ware
P4    1with the intent to defeat or evade the determination of an amount
2collected pursuant to this part is guilty of a misdemeanor.end insert

3begin insert(b)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insertbegin insertAnyend insert person whobegin delete knowinglyend deletebegin insert, for commercial gain,end insert sells,
4purchases, installs, transfers,begin delete possesses, or usesend deletebegin insert or possessesend insert in
5this state any automated sales suppression device or zapper or
6phantom-warebegin insert with the knowledge that the sole purpose of the
7device is to defeat or evade the determination of an amount
8collected pursuant to this partend insert
is guilty of an offense punishable
9by a finebegin delete of not more than ten thousand dollars ($10,000)end deletebegin insert as
10specified in paragraph (2)end insert
, by imprisonment in a county jail for
11not more than one year, or, pursuant to subdivision (h) of Section
121170 of the Penal Code, for 16 months, orbegin delete two,end deletebegin insert twoend insert or three years,
13or by both that fine and imprisonment. In addition, any person who
14uses an automated sales suppression device or zapper or
15phantom-ware shall be liable for all taxes, interest, and penalties
16due as a result of the use of that device.

begin insert

17(2) (A) Where a person is guilty of the offense described in
18paragraph (1) and the person sold, installed, transferred, or
19possessed three or fewer automated sales suppression devices or
20zappers or phantom-ware, that person shall be guilty of an offense
21punishable by a fine of not more than five thousand dollars
22($5,000).

end insert
begin insert

23(B) Where a person is guilty of the offense described in
24paragraph (1) and the person sold, installed, transferred, or
25possessed more than three automated sales suppression devices
26or zappers or phantom-ware, that person shall be guilty of an
27offense punishable by a fine of not more than ten thousand dollars
28($10,000).

end insert
begin delete

29(b)

end delete

30begin insert(c)end insert For purposes of this section:

31(1) “Automated sales suppression device” or “zapper” means
32a software program carried on a memory stick or removable
33compact disc, accessed through an Internet link, or accessed
34through any other means, that falsifies the electronic records of
35electronic cash registers and other point-of-sale systems, including,
36but not limited to, transaction data and transaction reports.

37(2) “Electronic cash register” means a device that keeps a
38register or supporting documents through the means of an
39electronic device or computer system designed to record transaction
P5    1data for the purpose of computing, compiling, or processing retail
2sales transaction data in whatever manner.

3(3) “Phantom-ware” means a hidden, preinstalled, or installed
4at a later time programming option embedded in the operating
5system of an electronic cash register or hardwired into the
6electronic cash register that can be used to create a virtual second
7till or may eliminate or manipulate transaction records that may
8or may not be preserved in digital formats to represent the true or
9manipulated record of transactions in the electronic cash register.

10(4) “Transaction data” includes information regarding items
11purchased by a customer, the price for each item, a taxability
12determination for each item, a segregated tax or fee amount for
13each of the items subject to the tax or fee, the amount of cash or
14credit tendered, the net amount returned to the customer in change,
15the date and time of the purchase, the name, address, and
16identification number of the vendor, and the receipt or invoice
17number of the transaction.

begin insert

18(d) This section shall not preclude prosecution under any other
19law.

end insert
20

SEC. 3.  

No reimbursement is required by this act pursuant to
21Section 6 of Article XIII B of the California Constitution because
22the only costs that may be incurred by a local agency or school
23district will be incurred because this act creates a new crime or
24infraction, eliminates a crime or infraction, or changes the penalty
25for a crime or infraction, within the meaning of Section 17556 of
26the Government Code, or changes the definition of a crime within
27the meaning of Section 6 of Article XIII B of the California
28Constitution.



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