NY State Senate Bill 2011-S7733

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 19, 2012	referred to ways and means delivered to assembly passed senate ordered to third reading cal.1338
Jun 15, 2012	referred to rules

Votes

- Jun 19, 2012 - Floor Vote
  S7733
  
  59
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  3
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 19, 2012
      
      aye (59)
      
      Adams
      
      Addabbo Jr.
      
      Avella
      
      Ball
      
      Bonacic
      
      Breslin
      
      Carlucci
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Farley
      
      Flanagan
      
      Fuschillo
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Grisanti
      
      Hannon
      
      Hassell-Thompson
      
      Johnson
      
      Kennedy
      
      Klein
      
      Krueger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Libous
      
      Little
      
      Marcellino
      
      Martins
      
      Maziarz
      
      McDonald
      
      Montgomery
      
      Nozzolio
      
      O'Mara
      
      Oppenheimer
      
      Parker
      
      Peralta
      
      Perkins
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stavisky
      
      Stewart-Cousins
      
      Storobin
      
      Valesky
      
      Young
      
      Zeldin
      
      excused (3)
      
      Alesi
      
      Espaillat
      
      Huntley
  Jun 21, 2012 - Rules Committee Vote
  S7733
  
  24
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  1
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 21, 2012
      
      aye (24)
      
      Breslin
      
      Dilan
      
      Duane
      
      Farley
      
      Fuschillo
      
      Hannon
      
      Hassell-Thompson
      
      Johnson
      
      Krueger
      
      LaValle
      
      Larkin
      
      Libous
      
      Marcellino
      
      Maziarz
      
      Montgomery
      
      Nozzolio
      
      Parker
      
      Perkins
      
      Saland
      
      Sampson
      
      Seward
      
      Skelos
      
      Smith
      
      Stewart-Cousins
      
      excused (1)
      
      Alesi

co-Sponsors

2011-S7733 (ACTIVE) - Details

Current Committee:: Assembly Ways And Means
Law Section:: Tax Law
Laws Affected:: Add §1816, Tax L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S3612
2015-2016: S5308
2017-2018: S5852

2011-S7733 (ACTIVE) - Summary

Prohibits the use of automated sales suppression devices, zappers or phantom-ware.

2011-S7733 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7733

TITLE OF BILL:
An act
to amend the tax law, in relation to prohibiting the use of
automated sales suppression devices, zappers or phantom-ware

PURPOSE:
To make it illegal for a person to knowingly purchase,
possess, install, update, maintain, upgrade, transfer or use any
automated sales suppression device, zapper or phantom-ware.

SUMMARY OF PROVISIONS:
Section 1: Adds a new section 1816 to the tax law to define Automated
sales suppression device or zapper, electronic cash register,
phantom-ware, transaction data and transaction data.

Prohibits and makes it an offense for a person to knowingly purchase,
possess, install, update, transfer or use any automated sales
suppression device, zapper or phantom-ware. It is also an offense to
transmit data with the intent of data manipulation.

A violation violation is a class E felony punishable by a fine or not
less than five thousand dollars but not more than twenty-five
thousand dollars. For a second offense within five years, it is
punishable by a fine of not less than twenty-five thousand dollars

but not more than one hundred thousand dollars and for a third or
subsequent offense within ten years, by a fine of not less than one
hundred thousand dollars but not more than five hundred thousand
dollars.

It is an offense for a person to knowingly sell any automated sales
suppression device, zapper or phantom-ware. This violation is a class
E felony punishable by a fine of twenty-five thousand dollars per
incident,

Section 2: This act takes effect on January 1, 2013.

JUSTIFICATION:
Automated sales suppression devices can be used to
evade sales tax collection, including the so called tax-zapper
software that lets businesses, especially those that deal mostly in
cash, to underreport taxable sales and pocket money that should be
given to the government.

During business hours, cashiers record the true sales and give
customers accurate receipts. A software of real sales can also be
stored electronically. After hours, a memory stick that contains the
zapper is inserted to remove a given amount in the sales from the
day's receipts. For each altered transaction, the zapper software
will also re-total and recalculate the individuals receipts. This
action alters the tax due and creates a second set of books.

The Internal Revenue Service finds more than half of all cash
businesses under-report income from their sales. The IRS does not
track the use of zapper software. As a result, New York State has
increased their focus on cash businesses. It is estimated that New


York State loses over $1 billion in tax revenue annually as a result
of these devices.

It has been reported that New York State operated a series of stings
operations in which cash register vendors were invited to pitch their
equipment to phony restaurants. The results were shocking. In many
cases, the vendors offered the phony restaurant opportunities to
underpay their taxes using software.

The majority of the businesses in our State are complying with New
York State sales tax laws and properly remitting the money collected.
This legislation is focused on the small number of businesses which
are illegally underreporting their tax collections.

LEGISLATIVE HISTORY: New Bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect on January
1, 2013.

2011-S7733 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7733

                            I N  S E N A T E

                              June 15, 2012
                               ___________

Introduced by Sens. MARCELLINO, KRUEGER -- read twice and ordered print-
  ed, and when printed to be committed to the Committee on Rules

AN ACT to amend the tax law, in relation to prohibiting the use of auto-
  mated sales suppression devices, zappers or phantom-ware

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The tax law is amended by adding a new section 1816 to read
as follows:
  S 1816. AUTOMATED SALES SUPPRESSION. (A) DEFINITIONS. AS USED IN  THIS
SECTION:
  (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 TRANSACTION DATA.
  (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  WITH  INTENT  OR  BY  SPECIFIC  DESIGN IS 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" MEANS DATA ASSOCIATED WITH 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  IDEN-
TIFICATION  NUMBER  OF  THE VENDOR, AND THE RECEIPT, SEQUENCE OR INVOICE
NUMBER OF THE TRANSACTION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD16268-02-2

S. 7733                             2

  (5) "TRANSACTION REPORT" MEANS A REPORT DOCUMENTING  DATA,  INCLUDING,
BUT  NOT  LIMITED TO, DATA ASSOCIATED WITH SALES, TAXES COLLECTED, MEDIA
TOTALS, AND DISCOUNT VOIDS AT AN ELECTRONIC CASH REGISTER THAT IS PRINT-
ED ON CASH REGISTER TAPE AT THE END OF A DAY OR SHIFT, OR A REPORT DOCU-
MENTING EVERY ACTION AT AN ELECTRONIC CASH REGISTER THAT IS STORED ELEC-
TRONICALLY.
  (6)  "PERSON"  SHALL HAVE THE SAME DEFINITION AS IN SUBDIVISION (A) OF
SECTION ELEVEN HUNDRED ONE OF THIS CHAPTER.
  (B) PROHIBITIONS. (1) IT IS AN  OFFENSE  FOR  A  PERSON  TO  KNOWINGLY
PURCHASE,  POSSESS,  INSTALL, UPDATE, MAINTAIN, UPGRADE, TRANSFER OR USE
ANY AUTOMATED SALES SUPPRESSION DEVICE, ZAPPER OR PHANTOM-WARE.   IT  IS
ALSO AN OFFENSE TO TRANSMIT DATA WITH THE INTENT OF DATA MANIPULATION.
  (2)  A  VIOLATION  OF  PARAGRAPH  ONE OF THIS SUBDIVISION IS A CLASS E
FELONY PUNISHABLE BY A FINE OF NOT LESS THAN FIVE THOUSAND  DOLLARS  BUT
NOT  MORE  THAN  TWENTY-FIVE  THOUSAND DOLLARS AND, FOR A SECOND OFFENSE
WITHIN FIVE YEARS, BY A FINE  OF  NOT  LESS  THAN  TWENTY-FIVE  THOUSAND
DOLLARS  BUT NOT MORE THAN ONE HUNDRED THOUSAND DOLLARS AND, FOR A THIRD
OR SUBSEQUENT OFFENSE WITHIN TEN YEARS, BY A FINE OF NOT LESS  THAN  ONE
HUNDRED  THOUSAND  DOLLARS  BUT  NOT  MORE  THAN  FIVE  HUNDRED THOUSAND
DOLLARS.
  (3) IT IS AN OFFENSE FOR A PERSON  TO  KNOWINGLY  SELL  ANY  AUTOMATED
SALES SUPPRESSION DEVICE, ZAPPER OR PHANTOM-WARE.
  (4)  A  VIOLATION  OF PARAGRAPH THREE OF THIS SUBDIVISION IS A CLASS E
FELONY PUNISHABLE BY A FINE OF TWENTY-FIVE THOUSAND  DOLLARS  PER  INCI-
DENT.
  (5)  THE  OFFENSES CREATED BY THIS SECTION SHALL BE IN ADDITION TO AND
CONSIDERED A SEPARATE OFFENSE  FROM  ANY  OFFENSE  OF  SECTION  EIGHTEEN
HUNDRED SEVENTEEN OF THIS PART.
  S 2. This act shall take effect January 1, 2013.

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Senate Bill S7733

Sponsored By

Archive: Last Bill Status - In Assembly Committee

Jun 19, 2012 - Floor Vote

Floor Vote: Jun 19, 2012

Jun 21, 2012 - Rules Committee Vote

Rules Committee Vote: Jun 21, 2012

co-Sponsors

2011-S7733 (ACTIVE) - Details

2011-S7733 (ACTIVE) - Summary

2011-S7733 (ACTIVE) - Sponsor Memo

2011-S7733 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S7733

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Sponsored By

Carl L. Marcellino

Archive: Last Bill Status - In Assembly Committee

co-Sponsors

Liz Krueger

2011-S7733 (ACTIVE) - Details

2011-S7733 (ACTIVE) - Summary

2011-S7733 (ACTIVE) - Sponsor Memo

2011-S7733 (ACTIVE) - Bill Text download pdf

Comments