AB 781, as amended, Bocanegra. Sales and use taxes: fees: administration: violations for noncompliance: sales suppression devices.
Existing law requires the payment of sales and use taxes, and specified taxes, 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, respectively.
This bill would, under those laws, provide that a person who 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, sells, purchases, installs, transfers, or possesses in this state any automated sales suppression device or zapper or phantom-ware with the knowledge that the sole purpose of the device is to defeat or evade the determination of an amount due or collected 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:
Section 7153.6 is added to the Revenue and
2Taxation Code, to read:
(a) Notwithstanding any other provision of this part,
4any 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.
8(b) (1) Any person who, for commercial gain, sells, purchases,
9installs, transfers, or possesses in this state any automated sales
10suppression device or zapper or phantom-ware with the knowledge
11that the sole purpose of the device is to defeat or evade the
12determination of an amount due pursuant to this part is guilty of
13an offense punishable by a fine
as specified in paragraph (2), by
14imprisonment in a county jail for not more than one year, or,
15pursuant to subdivision (h) of Section 1170 of the Penal Code, for
1616 months, or two or three years, or by both that fine and
17imprisonment. In addition, any person who uses an automated
18sales suppression device or zapper or phantom-ware shall be liable
19for all taxes, interest, and penalties due as a result of the use of
20that device.
21(2) (A) Where a person is guilty of the offense described in
22paragraph (1) and the person sold, installed, transferred, or
23possessed three or fewer automated sales suppression devices or
24zappers or phantom-ware, that person shall be guilty of an offense
25punishable by a fine of not more than five thousand dollars
26($5,000).
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 or
4zappers or phantom-ware, that person shall be guilty of an offense
5punishable by a fine of not more than ten thousand dollars
6($10,000).
7(3) This subdivision shall not apply to a person that is a
8corporation that possesses any automated sales suppression device
9or zapper or phantom-ware for the sole purpose of developing
10hardware or software to combat the evasion of taxes by use of
11automated sales suppression devices or zappers or phantom-ware.
12(c) For purposes of this section:
13(1) “Automated sales suppression device” or “zapper” means
14a software program carried on a memory stick or removable
15compact disc, accessed through an Internet link, or accessed
16through any other means, that falsifies the electronic records of
17electronic cash registers and other point-of-sale systems, including,
18but not limited to, transaction data and transaction reports.
19(2) “Electronic cash register” means a device that keeps a
20register or supporting documents through the means of an
21electronic device or computer system designed to record transaction
22data for the purpose of computing, compiling, or processing retail
23sales transaction data in whatever manner.
24(3) “Phantom-ware” means a hidden, preinstalled, or installed
25at a later time programming option embedded in the
operating
26system of an electronic cash register or hardwired into the
27electronic cash register that can be used to create a virtual second
28till or may eliminate or manipulate transaction records that may
29or may not be preserved in digital formats to represent the true or
30manipulated record of transactions in the electronic cash register.
31(4) “Transaction data” includes information regarding items
32purchased by a customer, the price for each item, a taxability
33determination for each item, a segregated tax amount for each of
34the taxed items, the amount of cash or credit tendered, the net
35amount returned to the customer in change, the date and time of
36the purchase, the name, address, and identification number of the
37vendor, and the receipt or invoice number of the transaction.
38(d) This section shall not preclude prosecution under any other
39law.
Section 55363.5 is added to the Revenue and Taxation
2Code, to read:
(a) Notwithstanding any other provision of this part,
4any 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
7collected pursuant to this part is guilty of a misdemeanor.
8(b) (1) Any person who, for commercial gain, sells, purchases,
9installs, transfers, or possesses in this state any automated sales
10suppression device or zapper or phantom-ware with the knowledge
11 that the sole purpose of the device is to defeat or evade the
12determination of an amount collected pursuant to this part is guilty
13of an offense punishable by
a fine as specified in paragraph (2),
14by imprisonment in a county jail for not more than one year, or,
15pursuant to subdivision (h) of Section 1170 of the Penal Code, for
1616 months, or two or three years, or by both that fine and
17imprisonment. In addition, any person who uses an automated
18sales suppression device or zapper or phantom-ware shall be liable
19for all taxes, interest, and penalties due as a result of the use of
20that device.
21(2) (A) Where a person is guilty of the offense described in
22paragraph (1) and the person sold, installed, transferred, or
23possessed three or fewer automated sales suppression devices or
24zappers or phantom-ware, that person shall be guilty of an offense
25punishable by a fine of not more than five thousand dollars
26($5,000).
27(B) Where a person is guilty of the offense described in
28paragraph (1) and the person sold, installed, transferred, or
29possessed more than three automated sales suppression devices or
30zappers or phantom-ware, that person shall be guilty of an offense
31punishable by a fine of not more than ten thousand dollars
32($10,000).
33(3) This subdivision shall not apply to a person that is a
34corporation that possesses any automated sales suppression device
35or zapper or phantom-ware for the sole purpose of developing
36hardware or software to combat the evasion of taxes by use of
37automated sales suppression devices or zappers or phantom-ware.
38(c) For purposes of this section:
39(1) “Automated sales suppression device” or “zapper” means
40a software program carried on a memory stick or removable
P5 1compact disc, accessed through an Internet link, or accessed
2through any other means, that falsifies the electronic records of
3electronic cash registers and other point-of-sale systems, including,
4but not limited to, transaction data and transaction reports.
5(2) “Electronic cash register” means a device that keeps a
6register or supporting documents through the means of an
7electronic device or computer system designed to record transaction
8data for the purpose of computing, compiling, or processing retail
9sales transaction data in whatever manner.
10(3) “Phantom-ware” means a hidden, preinstalled, or installed
11at a later time programming option embedded in
the operating
12system of an electronic cash register or hardwired into the
13electronic cash register that can be used to create a virtual second
14till or may eliminate or manipulate transaction records that may
15or may not be preserved in digital formats to represent the true or
16manipulated record of transactions in the electronic cash register.
17(4) “Transaction data” includes information regarding items
18purchased by a customer, the price for each item, a taxability
19determination for each item, a segregated tax or fee amount for
20each of the items subject to the tax or fee, the amount of cash or
21credit tendered, the net amount returned to the customer in change,
22the date and time of the purchase, the name, address, and
23identification number of the vendor, and the receipt or invoice
24number of the transaction.
25(d) This section shall not preclude prosecution under any other
26law.
No reimbursement is required by this act pursuant to
28Section 6 of Article XIII B of the California Constitution because
29the only costs that may be incurred by a local agency or school
30district will be incurred because this act creates a new crime or
31infraction, eliminates a crime or infraction, or changes the penalty
32for a crime or infraction, within the meaning of Section 17556 of
33the Government Code, or changes the definition of a crime within
34the meaning of Section 6 of Article XIII B of the California
35Constitution.
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