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Paul Rolly: Tea party goblins haunt lawmakers, threaten online sales tax

Published December 9, 2013 8:47 am

This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Utah is the only state whose Legislature adopted resolutions two years in a row urging Congress to pass the Marketplace Fairness Act, which would force online vendors to collect sales taxes from purchases made in the various states.

So it's curious that Utah's two senators, both states' rights advocates, would be among the 27 senators who voted against the act in May.

Or maybe not.

The "nay" votes by Republican Sens. Orrin Hatch and Mike Lee might indicate they are listening more to certain interest groups than the Legislature in the state they represent.

Perhaps the scenario is similar to the culture Washington Post columnist Dana Milbank referenced from a Guardian newspaper investigation of the corporate-funded American Legislative Exchange Council. ALEC had prepared a draft loyalty oath in which state legislators would promise to put the interests of that organization above all else.

In the case of Hatch and Lee, that interest might be with Overstock.com, the Utah-based online giant and a leading opponent of the online-sales-tax bill.

Overstock.com lobbyists helped kill an online-tax bill in the Utah House last year after the Senate approved it.

Sen. Wayne Harper, R-Taylorsville, said pressure from Overstock.com is what prompted the bill to die in the House without a vote the last night of the session. But he said he would bring back a stronger bill this session.

Harper said he was emboldened after the U.S. Supreme Court let stand a strongly worded online-sales-tax bill in New York by declining to hear an appeal.

Harper, president of the national Streamlined Sales Tax governing board, wants Congress to pass the national online-sales-tax requirement and then allow states to set up their own collection systems

It is estimated that if Utah gathered all the sales taxes from remote Internet sales, it would bring in an additional $180 million. Nationally, the estimate is $23 billion.

All four of Utah's U.S. House members are leaning in favor of the online-tax requirement, according to Rep. Jason Chaffetz. The House bill, however, would differ from the one the Senate passed 69-27 in May.

The House measure may not come up until the middle of next year, because some Republicans worry that, if they vote for it, they would be branded as tax raisers and face tea-party challengers funded by deep-pocketed right-wing groups.

Indeed, the pressure on GOP legislators is already surfacing. Republican state delegates have been fielding push polls in recent weeks asking if they would support a legislator who voted for a "tax increase" by supporting online-sales-tax collections.

Chaffetz, R-Utah, who predicts a bill eventually will pass Congress, says those types of tactics are meant to mislead voters through "bumper sticker" slogans and plant fear in the minds of some representatives that they could get bumped by their own party if they disobey.

prolly@sltrib.com