[§231-93]  Cash-based business;defined.  For purposes of sections 231-91 to 231-100, "cash-basedbusiness" means any person who operates a business, including for-profitor not-for-profit, where transactions in goods or services are exchangedsubstantially for cash and where the business is found, based upon reasonablecause including observation or evidence, to have met one of the followingfactors:

(1)  Is found to have substantially underreported ormisrepresented the proper amount of tax liability on any return or othersubmission to the department.  For purposes of this paragraph, an amount hasbeen substantially underreported if the amount properly includible on thereturn or submission is in excess of twenty-five per cent of the amount statedon the return or submission;

(2)  Is required to be licensed, registered, orpermitted under title 14 and is in fact not so licensed, registered, orpermitted;

(3)  Has a past pattern of noncompliance ofobligations under title 14;

(4)  Does not have a fixed and permanent principalplace of business;

(5)  Has not obtained any required tax clearance;

(6)  Has failed to maintain adequate books andrecords, or those records required to be maintained by law or administrativerule;

(7)  Does not accept checks or electronic paymentdevices for business transactions; provided that a business may establishreasonable criteria for accepting personal checks;

(8)  Offers price differentials or otherwise deviatesfrom usual business practices when the business transaction substantiallyinvolves payment of cash, except where there is a bona fide business reason fora price differential, such as the avoidance of merchant fees imposed by creditcard companies; or

(9)  Any other factor relevant to describing a cash-basedbusiness capable of noncompliance as determined by the director of taxation andissued pursuant to a tax information release;

provided that a business shall not be deemed to havemet any of these factors while a genuine dispute as to that factor is pendingin a contested case before any administrative agency or in any court. [L 2009,c 134, pt of §2]