This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Lawmakers from many states, including Utah, are so fed up with the mess that has been made of collecting sales taxes on online purchases that they are prepared to make an even bigger mess. Because that may be the only way to get Congress to step up and do its job, those legislators should go ahead and do exactly that.
Both as a member of the Utah Legislature and as president of the National Conference of State Legislatures, Sen. Curt Bramble is tired of watching the many millions of dollars that are legally owed on purchases made by Utah residents go uncollected just because those transactions involve sellers located in other states who do business on the Internet.
Thus he and his colleagues from around the nation are prepared to pass new state laws that will require, or try to require, Internet merchants to collect and remit sales taxes in the same way, and at the same rates, that real stores do.
The fact that such laws may create an unmanageable crazy quilt of laws, rules and tax rates is the whole point. The hope is that it would push businesses to push Congress to pass a bill from Utah's Rep. Jason Chaffetz to set up a federal law to address the issue.
The bill, Remote Transactions Parity Act of 2015, was introduced to some fanfare in June and so far has 60 co-sponsors, pretty evenly divided between Democrats and Republicans. But the bill has been stuck in committee, fought by lobbyists who automatically oppose anything that can be described, even dishonestly, as a new or increased tax.
To see why this is a solution to a problem, and not just a revenue grab, requires the understanding that a sales tax is not a tax on a business. It is not a tax on the Internet. It is a tax on the buyer. A consumption tax.
So when the buyer is standing, or sitting, or lounging, in Utah, the things she buys should be taxed by Utah, and by the local jurisdiction involved. Otherwise things that buyer needs and uses every day — mostly roads, public safety and education — are deprived of income they need to provide what the buyer reasonably expects from government. But unreasonably, and often unwittingly, isn't paying for.
Chaffetz understands that the key to allowing online businesses to collect sales taxes without an undue burden is technology. His bill would require any state that expects to collect such taxes to provide businesses with necessary software, for free. It also provides exemptions for small businesses.
Some businesses — virtual and real — favor the bill as a way of leveling the playing field. It would do that. But more important than being fair to businesses is the fact that it would be fair to taxpayers, in a way the current system is not.