No firm data exists examining the rate of zapper penetration in the U.S., but he said the number is much higher than revenue departments believe. He estimated at least 30 percent of all electronic cash registers are running tax zapping software, pointing to research by European and Canadian revenue agencies. Some estimates have asserted penetration rates of 50 percent or higher.
All those zappers are impeding tax collections, but the full impact is unclear.
Ainsworth pegged the revenue loss for the states from sales suppression in the restaurant industry alone at $21 billion annually. That estimate is based on research examining tax losses by provincial revenue officials in Quebec, Canada in 2009. The 2009 data was chosen because it predates Quebec’s 2011 rule requiring restaurants to install sales-recording modules, or “black boxes,” which provide sales transaction data to provincial revenue authorities. The Quebec loss ratios were matched against comparable state economic data.
While Ainsworth concedes the $21 billion number is a “back-of-the-envelope estimate,” he asserts it may underestimate the losses.
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