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Some Holladay leaders have come up with a creative way to focus attention on what they see as the shortchanging of state and local government by the loss of sales-tax revenues from online retail. But it requires some personal sacrifice.
City Councilman Steve Gunn has proposed that he and his colleagues sign a pledge to report and pay these taxes on their own online purchases.
State law for years has required residents to pay these taxes by reporting them on their state income-tax returns. Few do, and enforcement is virtually impossible.
That doesn't mean nonpayment is right, says Gunn, a retired attorney.
"I believe it is my moral duty to pay sales tax on internet purchases. I have come to believe this is a serious problem, as far as municipal finances are concerned," he said.
Gunn said his resolution was inspired by the example of Rep. Patrice Arent, D-Millcreek, who has paid these taxes for years. He realized he was not following state law and pledged that he and his wife would do so.
The resolution, which is scheduled for a council vote Thursday, states that Utah law requires an online buyer to pay sales tax directly to the state when the seller does not do so.
"The purpose is to spark other municipalities' leadership to do the same, and from that the public would take the initiative based on our resolution to do the same," Holladay Councilman Mark Stewart said.
He said many Utahns are most likely unaware that they are required to pay sales tax on internet purchases and that the council hopes to change that by raising public awareness and focusing some attention on the issue.
The proposed pledge explains that sales-tax revenues make up a large portion of the budgets of Utah cities and towns.
"Companies and businesses are selling products online, and cities are missing out on those sales taxes," Stewart said.
No one can say exactly how much revenue is being lost on online taxes that are legally owed but not paid. Recently, the governor's office estimated that the statewide figure is about $200 million annually.
In the last tax year, 16,599 Utahns reported and paid online taxes totaling $1.27 million, according to Utah State Tax Commission spokesman Charlie Roberts. Those forthright taxpayers represented 1.2 percent of all returns filed.
Online retail giant Amazon collects sales tax on its transactions with Utahns, but that deal with the state took effect Jan. 1 and it is unknown how much additional revenue it will produce.
Editor Dan Harrie contributed to this report.