Zappers - Technological Tax Fraud in New Hampshire

8 Pages Posted: 12 Oct 2016

See all articles by Richard Thompson Ainsworth

Richard Thompson Ainsworth

NYU - Graduate Tax Program; Boston University - School of Law

Date Written: October 11, 2016


No other State is as vulnerable to Zappers as is the State of New Hampshire. Zappers and related software programming, Phantom-ware, facilitate an old tax fraud – skimming cash receipts. In this instance skimming is performed with modern electronic cash registers (ECRs). Zappers are a global revenue problem, but to the best of this author’s knowledge they have not been uncovered in New Hampshire. Seen from a global perspective however, it seems unlikely that they are not here.

New Hampshire’s fiscal vulnerability to Zappers comes from its heavy reliance on precisely the industry segment that has been found to be the “hot bed” of this fraud – the restaurant industry. In the most recent fiscal year the Meals and Room Tax (M&RT) trailed only the Business Profits Tax (BPT) in revenue yield ($206,726 to $317,439 million). Taxes on meals approximate 70% of the M&RT. As a result, when tax fraud arises in this industry segment it is a significant concern.

Keywords: Zapper, Phantom-Ware, Rooms & Meals Tax, New Hampshire, Sales Suppression, Skimming, Tax Fraud

JEL Classification: K10, K19, K34, K39

Suggested Citation

Ainsworth, Richard Thompson, Zappers - Technological Tax Fraud in New Hampshire (October 11, 2016). Boston Univ. School of Law, Law and Economics Research Paper No. 16-40, Available at SSRN: or

Richard Thompson Ainsworth (Contact Author)

NYU - Graduate Tax Program ( email )

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