Indiana Considers Banning “Sales Tax Zappers”

Indiana is considering banning "sales tax zappers," computer programs that help business avoid paying sales taxes.

cash register

Photo: Andrew Ferguson (Flickr)

The sales tax zappers delete transactions so they cannot be recorded by the government.

State lawmakers are exploring ways to crack down on “sales tax zappers,” the 21st century’s version of skimming from the cash register. Eight states have banned the programs, and CGI, a Canadian-based financial consulting firm, estimates Indiana could recover nearly $60 million in lost revenue if it found a way to prevent the use of zappers.

The sales tax zappers, computer programs that are typically downloaded from the internet and saved on a flash drive or CD, allow stores to delete purchases, or parts of purchases, from their records. The store then does not report the transaction to the government and does not pay sales tax on it.

Last session, a bill in the General Assembly that would make selling or owning a zapper a Class-C felony failed to make it out of committee. CGI consultant Bryce Berg says just banning zappers may not curb the practice. He says a more effective method is installing sales recording modules, small computers, between the cash register and the receipt printer.

“So anything that gets entered into the cash register would flow through this SRM, this sales recording module and would be captured in there,” Berg says.

Those records would then be available to the government.

Cicero Republican Representative Eric Turner, who introduced last session’s zapper bill, says SRMs could place a burden on restaurants, where zappers are most commonly use.

“Well, I would certainly first be concerned about the cost to those local restaurants.,” he says. “We have a lot of mom and pops in this state.”

Turner says he expects legislation to ban zappers next session but is not sure the General Assembly will want to go any farther than that.

Brandon Smith, IPBS

Brandon Smith, IPBS has previously worked as a reporter and anchor for KBIA Radio in Columbia, MO, and at WSPY Radio in Plano, IL as a show host, reporter, producer and anchor. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.

View all posts by this author »

What is RSS? RSS makes it possible to subscribe to a website's updates instead of visiting it by delivering new posts to your RSS reader automatically. Choose to receive some or all of the updates from Indiana Public Media News:

Support For Indiana Public Media Comes From

Search News

Stay Connected

RSS e-mail itunes Facebook Twitter Flickr YouTube

Follow us on Twitter

What is RSS? RSS makes it possible to subscribe to a website's updates instead of visiting it by delivering new posts to your RSS reader automatically. Choose to receive some or all of the updates from Indiana Public Media News:

Recent Politics Stories

Recent Videos

Find Us on Facebook