Bellevue Restaurant Owner Sued for Using Computer to Cheat on Sales Tax
Officials are calling it the first ever of it's kind in Washington state, even the nation. The Attorney General's office is suing a restaurant owner who allegedly cheated the state out of more than $395K in sales taxes by using 'sales suppression software.'
We'd never heard of it either, but AG Bob Ferguson says the software deletes sales transactions, then re-balances the til and financial records to make it appear the business has not had as many sales. In turn, they pay less state sales taxes. According to Ferguson:
"Yu-Ling Wong, owner of the Facing East restaurant, is charged in King County Superior Court with first-degree theft, “utilizing sales suppression software,” and 21 counts of filing a false tax return. In all, the standard sentencing range as charged is 43 to 57 months. If aggravating circumstances are proven, the judge could impose additional time up to 120 months."
Ferguson went on to say:
"Run on a point-of-sale computer or cash register, sales suppression software surreptitiously deletes transactions. The software then re-balances the company financial records to show a lower sales figure, reducing the business’ tax obligation. Money that patrons paid sales tax is then pocketed, as these unscrupulous retailers keep “two sets of books.”
The AGO believes this to be the first criminal case targeting the use of sales suppression software in the nation."
We didn't even know technology like this existed, but apparently it does. According to the Wall Street Journal the use of "zappers" is rather commonplace in many cities. It's apparently been a growing problem since around 2008.