Mark Wainwright, an assistant attorney general representing the tax commission, said the agreement will give Utah, its counties and its cities a chance to address the issue.

The dispute began in July when the state, with one week's notice, began redistributing to cities several million dollars it had given counties during the past three years.

Telecommunication companies - including Comcast, Verizon and Qwest among others - had improperly reported addresses for customers, so the commission was sending money to the wrong taxing entities.

It meant leaner - or no - tax checks for counties.

"In July, they zeroed out our distribution," said Salt Lake County Auditor Jeff Hatch. "It was quite a shock to say the least."

The July redistribution statewide amounted to $4.8 million, said Charlie Roberts, commission spokesman. The agreement reached Friday and finalized Monday will not change that, Wainwright said.

However, the tax commission has agreed not to redistribute the remaining $3 million it believes the cities are owed - at least during the next 60 days, Wainwright said.

The counties argue Utah should go back just 90 days for redistribution, but the state contends it should go back as far as it has amended tax returns for the cell phone companies, to the beginning of 2005.

In Davis County, Clerk-Auditor Steve Rawlings said the $700,000 redistribution sought by the state could require a property tax hike in the county's unincorporated part.

The earliest taxes could go up is November 2009, though. In the meantime, the balance in the fund for unincorporated services could be wiped out, he said.

kmoulton@sltrib.com