A Revenue Opportunity WITHOUT a Tax Increase
NCSL 2011 Legislative Summit

Session Handout
 August 10, 2011

Excerpt from:  Georgia 2011 H.B. 415, related to fraud and related offenses ('Automated sales suppression devices' or 'zappers'.


Article 4 of Chapter 9 of Title 16 of the Official Code of Georgia Annotated, relating to fraud and related offenses, is amended by adding a new Code section to read as follows:


(a) As used in this Code section, the term:

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

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

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

(4) 'Transaction data' includes items purchased by a customer, the price for each item, a taxability determination for each item, a segregated tax amount for each of the taxed items, the amount of cash or credit tendered, the net amount returned to the customer in change, the date and time of the purchase, the name, address, and identification number of the vendor, and the receipt or invoice number of the transaction.

(5) 'Transaction reports' means a report documenting, but not limited to, the sales, taxes collected, media totals, and discount voids at an electronic cash register that is printed on cash register tape at the end of a day or shift, or a report documenting every action at an electronic cash register that is stored electronically.

(b) It shall be unlawful to willfully and knowingly sell, purchase, install, transfer, or possess in this state any automated sales suppression device or zapper or phantom-ware.

(c) Any person convicted of a violation of subsection (b) of this Code section shall be guilty of a felony and shall be punished by imprisonment of not less than one nor more than five years, a fine not to exceed $100,000.00, or both.

(d) Any person violating subsection (b) of this Code section shall be liable for all taxes and penalties due the state as the result of the fraudulent use of an automated sales suppression device or phantom-ware and shall disgorge all profits associated with the sale or use of an automated sales suppression device or phantom-ware.

(e) An automated sales suppression device or phantom-ware and any device containing such device or software shall be contraband."