Basic (Non-Technical) Requirements – Electronic Monitoring Agreement for Zappers, Phantomware, and Other Sales Suppression Devices Appendix A

Abstract

The State of Washington v. Wong, Wash. Super. Ct., No. 16-1-00179-0 is the State of Washington’s first judicially resolved case involving an automated sales suppression device. Months of negotiations led to a plea agreement and the State’s first electronic sales monitoring agreement (August 30, 2017). The taxpayer violated RCW 82.32.290 (4)(a) by knowingly possessing, and knowingly using a Zapper to suppress sales.

The penalties in this case were severe. Not only were all taxes, penalties, and interest lawfully due required to be paid, but as a Class C felony incarceration of up to 5 years, a $10,000 fine, or both were possible. An even a more severe penalty for the taxpayer involved prohibited her from participating in any business unless she:

… entere[d] into a written agreement with the department for the electronic monitoring of the business's sales, by a method acceptable to the department, for five years at the business's expense.

The Electronic Monitoring Agreement in this case is comprised of two parts – the basic agreement (Appendix A), and the technology requirements (Exhibit 1). This paper concerns Appendix A. Exhibit 1 was considered in an earlier article. This paper examines the provisions of the agreement, sets out the arguments and analysis of both sides, and offers suggestions that might be useful to others engaged in similar negotiations of this kind.

Keywords: State of Washington v. Wong Zapper Phantomware Electronic Monitoring Agreement