Cash register software may be to blame for sales tax revenue losses

Hundreds of millions of dollars in sales tax revenue is potentially lost each year due to something called "zappers."

Professor Richard Ainsworth of the Boston University School of Law has been studying zappers, also known as sales suppression software, for several years.

"The implications for the average person paying their taxes is staggering," said Ainsworth.

He estimates "tax losses from zappers and related fraud in the state's restaurant industry alone could top $600 million."

Those dollars lost because sales suppression software installed in cash registers make big transactions look smaller.

"I've been pre-programmed that every time somebody orders five hamburgers, I delete two of them," said Ainsworth.

The implication for the customer?

"You are paying your sales tax at the time you buy those hamburgers. The money's not going to the government, it's going into somebody else's pocket," said Ainsworth.

Jon Hurst of the Retailers Association of Massachusetts says it's possible some restaurant owners installed "zapped" cash registers without even knowing it.

"Just the existence that they are on a database, point of sale equipment for a store or restaurant, should not be a crime and should not trigger an enforcement action," said Hurst.

Ainsworth says more than two dozen states have comprehensive laws on the books to penalize the sale, distribution, use and manufacture of sales suppression software. Massachusetts is not one of them.

However, the state Department of Revenue does punish use of zappers under tax evasion penalty laws. The problem, Ainsworth says, is that audits are time consuming and expensive.

Cox Media Group