SF 1655

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 03/17/2017 08:28am

A bill for an act
relating to taxation; providing regulation of sales suppression devices; imposing
criminal penalties; amending Minnesota Statutes 2016, sections 289A.60, by adding
a subdivision; 289A.63, by adding a subdivision; 609.5316, subdivision 3;
proposing coding for new law in Minnesota Statutes, chapter 289A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [289A.14] USE OF AUTOMATED SALES SUPPRESSION DEVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of sections 289A.60, subdivision 32,
289A.63, subdivision 12, and 609.5316, subdivision 3, the following terms have the meanings
given.
new text end

new text begin (b) "Automated sales suppression device" or "zapper" means a software program, carried
on any tangible medium, 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.
new text end

new text begin (c) "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.
new text end

new text begin (d) "Phantom-ware" means hidden preinstalled or later-installed 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 electronic cash register
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.
new text end

new text begin (e) "Transaction data" includes items purchased by a customer, the price of each item,
the taxability determination for each item, a segregated tax amount for each of the taxed
items, 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.
new text end

new text begin (f) "Transaction report" 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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for activities enumerated in Minnesota
Statutes, section 289A.63, subdivision 12, or 289A.60, subdivision 32, that occur on or after
August 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 289A.60, is amended by adding a subdivision to
read:

new text begin Subd. 32. new text end

new text begin Sales suppression. new text end

new text begin (a) A person who:
new text end

new text begin (1) sells;
new text end

new text begin (2) transfers;
new text end

new text begin (3) develops;
new text end

new text begin (4) manufactures; or
new text end

new text begin (5) possesses with the intent to sell or transfer
new text end

new text begin an automated sales suppression device, zapper, phantom-ware, or similar device capable of
being used to commit tax fraud or suppress sales is liable for a civil penalty calculated under
paragraph (b).
new text end

new text begin (b) The amount of the civil penalty equals the greater of (1) $2,000, or (2) the total
amount of all taxes and penalties due that are attributable to the use of any automated sales
suppression device, zapper, phantom-ware, or similar device facilitated by the sale, transfer,
development, or manufacture of the automated sales suppression device, zapper,
phantom-ware, or similar device by the person.
new text end

new text begin (c) The definitions in section 289A.14 apply to this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for activities enumerated that occur on
or after August 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 289A.63, is amended by adding a subdivision to
read:

new text begin Subd. 12. new text end

new text begin Felony. new text end

new text begin (a) A person who:
new text end

new text begin (1) sells;
new text end

new text begin (2) purchases;
new text end

new text begin (3) installs;
new text end

new text begin (4) transfers;
new text end

new text begin (5) possesses;
new text end

new text begin (6) develops;
new text end

new text begin (7) manufactures;
new text end

new text begin (8) accesses; or
new text end

new text begin (9) uses
new text end

new text begin an automated sales suppression device, zapper, phantom-ware, or similar device knowing
that the device or phantom-ware is capable of being used to commit tax fraud or suppress
sales is guilty of a felony and may be sentenced to imprisonment for not more than five
years or to a payment of a fine of not more than $10,000, or both.
new text end

new text begin (b) An automated sales suppression device, zapper, phantom-ware, and any other device
containing an automated sales suppression, zapper, or phantom-ware device or software is
contraband and subject to forfeiture under section 609.5316.
new text end

new text begin (c) The definitions in section 289A.14 apply to this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for activities enumerated that occur on
or after August 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 609.5316, subdivision 3, is amended to read:

Subd. 3.

Weapons, telephone cloning paraphernalia, new text begin automated sales suppression
devices, new text end and bullet-resistant vests.

Weapons used are contraband and must be summarily
forfeited to the appropriate agency upon conviction of the weapon's owner or possessor for
a controlled substance crime; for any offense of this chapter or chapter 624, or for a violation
of an order for protection under section 518B.01, subdivision 14. Bullet-resistant vests, as
defined in section 609.486, worn or possessed during the commission or attempted
commission of a crime are contraband and must be summarily forfeited to the appropriate
agency upon conviction of the owner or possessor for a controlled substance crime or for
any offense of this chapter. Telephone cloning paraphernalia used in a violation of section
609.894 new text begin , and automated sales suppression devices, phantom-ware, and other devices
containing an automated sales suppression or phantom-ware device or software used in
violation of section 289A.63, subdivision 12, new text end are contraband and must be summarily forfeited
to the appropriate agency upon a conviction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for activities enumerated in Minnesota
Statutes, section 289A.63, subdivision 12, that occur on or after August 1, 2017.
new text end