Does the Fair Tax guard against business owner exploitation?

Not sure how this no tax on "business to business" sales. If the owner of a company used their company "personal" items, will it still be taxed.

Example: In the current tax code a business can buy 200 computers tax free, cause its used for production. Now the owner comes by, sees one of those PC's and takes one home for persoanl use or to give to their child..etc... Now that might be illegal, but its likely he would ever get caught.

So my question is, as of right now executives write off trips, technology, and even vacation homes, because the business bought them and they claim is for "work related activities". Does the Fair Tax address this issue?

Under the Fair Tax, businesses do not pay any tax on items purchased for use in their business. This applies to raw materials used in the manufacturing process to the pens, paper or paper chips that are exhaustable supplies for the business. If any item is taxed, the business would just pass along the "tax costs of doing business."

When a business owner decides to use an item that was purchased for business use for personal use of the ownere or family etc, it is expected that the business would pay the Fair Tax on the item. How will this be detected if it occurs? It may be difficult if it is a rare occurance. But the owner that trys to get around the Fair Tax on a regular basis, when the business has excessive purchases and very little sales with no Fair Tax being paid, the state having juristiction would question the sales tax reports and then proceed to investigate the business. The fines and penalties (including jail time) are high compared actually reporting properly and paying the Fair Tax.

Yes some businesses will try, but the overall fraud and abuse under the Fair Tax will be greatly reduced from that under the current income tax system.

One thing to consider is that over 85% of all (state) sales taxes collected are done by less than 4% of all retail businesses. (WalMart, Target, K-mart/Sears etc).

"Fair tax" is an oxymoron.

And your examples happen much less than you think they do. Not all business owners are rich and not all business owners look for ways to cheat the system.

First, no tax will prevent people from illegal acts if they are set on commiting the act.
Second, any system will always have people who find ways to "scam" that system.
The FAIR tax, as I understand it, puts what amounts to a national sales tax on products. The theory is that all federal income taxes would be eliminated and this federal sales tax would replace it. Since everyone above the poverty level would pay the same tax rate on the products they purchase and use/consume, it would be an equitable tax on everyone. This includes corporations and businesses.
Using your example, the 200 computers purchased for the business would be taxed upon sale to the company, so it wouldn't matter if they were used for the business or by the owner for personal use.
The basic theory is that the tax rate would be the same for corporations and individuals alike, so those who consume the most goods and services would be paying the most tax. Example: an individual buying one computer would pay the sales tax on that computer, while a company buying 200 computers would pay sales tax on each of the 200 computers.

The brief answer to your question is no, that the FAIR tax does not guard against business owner exploitation.