42-1127 - Criminal violation; classification; place of trial; definitions

42-1127. Criminal violation; classification; place of trial; definitions

A. It is a class 4 felony to:

1. Corruptly or by force or threats of force or injury:

(a) Attempt to intimidate, impede or injure an employee of the department acting in an official capacity.

(b) Obstruct, impede or attempt to obstruct or impede the administration of this title or title 43.

2. Attempt by means of bribery, misrepresentation, intimidation or force or threats of force to obstruct, delay or prevent the communication of information or testimony relating to a violation of this title or title 43 to an employee or officer of the department, or knowingly injure another personally or injure the person's property on account of the person giving, personally or by any other person, any such information or testimony to an employee of the department.

3. Make, forge, alter or counterfeit with the intent to defraud a stamp or meter impression prepared or prescribed by the department under chapter 3 of this title, or to knowingly utter, publish, pass or tender as true a false, altered, forged or counterfeited stamp or meter impression, or to use a stamp provided for and required by chapter 3 of this title which has already once been used, with the intent to evade the tax imposed by chapter 3 of this title.

4. Tamper with, or cause to be tampered with, any metering machine authorized to be used under chapter 3 of this title.

B. A first-time violation of this subsection may be designated as a class 1 misdemeanor, but otherwise it is a class 5 felony to:

1. Knowingly fail to pay any tax administered pursuant to this article due or believed due by the taxpayer with intent to evade the tax.

2. Knowingly prepare, present or aid, procure or advise in preparing or presenting any return, affidavit, claim or other document which is fraudulent or is false as to any material matter, whether or not the falsity or fraud is with the knowledge or consent of the taxpayer authorized or required to present the return, affidavit, claim or document.

3. Simulate or falsely or fraudulently execute or sign any license or other required document, or cause the license or document to be falsely or fraudulently executed or advise or aid in such execution, with the intent to conceal or cover up a material fact relating to a tax administered pursuant to this article.

4. Knowingly fail to file a return or supply required information, or falsify or conceal a material fact, document or record, make a false, fictitious or fraudulent statement or representation or make or use a false writing or document knowing it to contain a false, fictitious or fraudulent statement or entry, with intent that the department rely on the false, fictitious or fraudulent statement or entry in determining tax liability under this article.

5. Purchase, install or use any automated sales suppression device or service or zapper or phantom-ware with the intent to defeat or evade any tax administered pursuant to this article that is due or believed to be due by the taxpayer. In addition, a person that is convicted of a violation of this paragraph:

(a) Is subject to a fine of not more than one hundred thousand dollars or, if a corporation, not more than five hundred thousand dollars. Monies paid as fines shall be deposited in the department of revenue tax fraud interdiction fund established by section 42-1116.02.

(b) Is liable for all taxes, fees, penalties and interest due as a result of the person's use of the automated sales suppression device or service or zapper or phantom-ware.

(c) Shall forfeit all profits associated with the person's purchase or use of the automated sales suppression device or service or zapper or phantom-ware.

6. Sell, license, purchase, install, transfer, sell as a service, manufacture, develop or possess any automated sales suppression device or service or zapper or phantom-ware knowing that the purpose of the device is to defeat or evade any tax administered pursuant to this article. In addition, a person that is convicted of a violation of this paragraph:

(b) Is liable for all taxes, fees, penalties and interest due as a result of the person's use of the automated sales suppression device or service or zapper or phantom-ware.

(c) Shall forfeit all profits associated with the person's sale or use of the automated sales suppression device or service or zapper or phantom-ware.

C. A distributor as defined in section 42-3001 who violates section 42-3452, subsection A, paragraph 2 is guilty of a class 1 misdemeanor. If the distributor is convicted of a second violation of section 42-3452, subsection A, paragraph 2, the department may revoke the distributor's license issued pursuant to section 42-3401.

D. A distributor as defined in section 42-3001 who violates any provision of section 42-3401, section 42-3452, subsection A, paragraph 1 or section 42-3456 is guilty of a class 1 misdemeanor. If the distributor is a licensee under section 42-3401 and is convicted of a second violation of section 42-3456, the department may revoke the distributor's license.

E. It is a class 3 felony for any person to:

1. Except as provided in section 42-3457, transport, in an unstamped or unlawfully stamped condition, for the purpose of sale ten thousand or more cigarettes that were subject to the tax imposed by chapter 3, article 2, 6, 7 or 9 of this title.

2. Wilfully sell or offer for sale, in an unstamped or unlawfully stamped condition, ten thousand or more cigarettes that were subject to the tax imposed by chapter 3, article 2, 6 or 7 of this title.

3. Wilfully sell or offer for sale off an Indian reservation ten thousand or more cigarettes that are stamped for on-reservation sales.

F. For the purposes of subsection E of this section, the possession or transportation in this state at any time by any person, other than a licensed distributor, as defined in section 42-3001, of ten thousand or more cigarettes in an unstamped or unlawfully stamped condition, other than in interstate shipment consistent with federal contraband cigarette trafficking laws (18 United States Code chapter 114), is presumptive evidence that the cigarettes:

1. Are possessed or transported for the purpose of sale.

2. Are subject to the taxes imposed by chapter 3, article 2, 6, 7 or 9 of this title.

G. A person who knowingly sells a luxury on which the tax has not been paid or accounted for as required by chapter 3 of this title is guilty of a class 1 misdemeanor.

H. A retailer who possesses any package, bottle or other container containing a luxury that does not bear the stamps required to be affixed by chapter 3 of this title is guilty of a class 1 misdemeanor.

I. A person is guilty of a class 3 misdemeanor who:

1. Is engaged in the business of selling a luxury, either at wholesale or retail, and who knowingly refuses or fails to produce on demand by the department invoices of all luxuries the person purchased or received within two years immediately before the demand, unless the person shows by satisfactory proof that the person is unable to do so for reasons beyond the person's control.

2. Makes a false entry on an invoice, package or container of luxuries, or who with intent to avoid the taxes imposed by chapter 3 of this title presents a false entry for inspection of the department.

3. Knowingly prevents or hinders the department from making a full inspection of any place where a luxury is sold or stored, or knowingly prevents or hinders the inspection of invoices, books, records or papers required to be kept.

4. Violates any provision of this article or an administrative rule adopted by the department for which no other penalty is prescribed.

J. The place of trial for the offenses enumerated in this section is in the county of residence or principal place of business of the defendant or defendants. If the defendant has no residence or principal place of business in this state, the trial shall be held in Maricopa county.

K. A person who defrauds this state by violating any requirement under chapter 3 of this title, with criminal intent to evade any such requirement, is guilty of a class 4 felony and shall pay a penalty of three times the retail value of the cigarettes involved.

L. A person who knowingly violates any requirement under chapter 3 of this title, with the criminal intent to evade any such requirement, is guilty of a class 6 felony.

M. A person who knowingly sells or offers to sell off an Indian reservation more than two thousand but less than ten thousand cigarettes that are stamped for on-reservation sales, with the criminal intent to evade the tax imposed by chapter 3 of this title, is guilty of a class 5 felony.

N. Any distributor, as defined in section 42-3001, who sells or possesses more than two thousand cigarettes with false manufacturing labels or cigarettes with counterfeit tax stamps, with the criminal intent to evade any requirement under chapter 3 of this title, is guilty of a class 5 felony and shall pay a penalty of:

1. For a first violation involving two thousand or more cigarettes, two thousand dollars or three times the retail value of the cigarettes, whichever is greater.

2. For a subsequent violation involving two thousand or more cigarettes, fifty thousand dollars or three times the retail value of the cigarettes, whichever is greater.

O. For the purposes of this section:

1. "Automated sales suppression device" means a computer software program that falsifies the electronic records of electronic cash registers and other point-of-sale systems, including transaction data and transaction reports.

2. "Electronic cash register" means an electronic or computer system that records a register or supporting data for the purpose of computing, storing or processing retail sales and other transaction data.

3. "Luxury" means any article, object or device on which a tax is imposed under chapter 3 of this title.

4. "Phantom-ware" means hidden or concealed computer software or hardware of an electronic cash register or other point-of-sale system that can create a second set of records or eliminate or manipulate transaction records that may or may not be preserved in digital formats in order to misrepresent the existence or the true record of a transaction in the electronic cash register.

5. "Point-of-sale system" means an electronic device that is used to process card payments at retail locations.

6. "Transaction data" means data relating to a commercial transaction that includes data identifying each purchased item, the price for each item, a taxability determination for each item, a segregated tax amount for each taxed item, the amount of cash or credit tendered, the net amount of change returned to the customer, the date and time of the purchase, the name, address and identification number of the vendor and the receipt or invoice number of the transaction.

7. "Transaction report" means any means or method of reporting, displaying or generating transaction data.

8. "Zapper":

(a) Means a computer software program that falsifies the electronic records of electronic cash registers or other point-of-sale systems, including, but not limited to, transaction data and transaction reports.

(b) Includes the software program, any device that carries the software program or an internet link to the software program.