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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.

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