Lawmakers on the last night of the legislative session repealed a key provision of the state's streamlined tax law, assuring that Utah will not be certified as one of the several states participating in the movement launched several years ago by then-Gov. Mike Leavitt.

Utah's involvement is "on indefinite hold," Sen. Curt Bramble, R-Provo, said Monday.

Bramble's SB233 passed Wednesday in the waning hours of the session, repealing a controversial provision that would have required companies to collect sales tax based on where a product was delivered - not, as under current law, where it is sold.

"We've removed the [streamlined sales tax agreement] linchpin of destination-based sourcing," said Bramble. "We pulled that out of the statute."

The premise of the streamlined tax agreement is that if enough states adopt a uniform, simplified sales tax structure, companies would voluntarily begin collecting state taxes on Internet and catalog sales. Once that happened on a significant scale, states then would lobby Congress to enact it on a national scale.

States say hundreds of millions of dollars in sales is escaping taxes, depriving states of legitimate revenue and creating a disadvantage for retailers located within states that tax sales.

As recently as November, some Utah lawmakers - including Bramble - were talking about the streamlined sales tax as a potential source of as much as $50 million in revenue to offset other tax cuts. But that prospect was later downplayed, with estimates of the revenue being reduced to $5 million or less.

The change in figuring sales tax rates based on delivery had been scheduled to go into effect July 1.

But the implementation date had been repeatedly pushed back because of fears that computerized accounting systems needed to do the rate calculations weren't available.

"For the last three years, we've gone right up to the deadline and then delayed it," said Bramble, describing the repeated postponements as "brinkmanship" that undermined the stability and predictability of Utah's tax system.

"That's not good tax policy, not knowing what the tax is going to be," he said.

Utah Tax Commissioner Bruce Johnson, a leader in the national streamlined sales tax movement, was clearly disappointed by the state's reversal.

But he tried to put the best face on the action, calling it a temporary "step back."

"We look forward to coming back to the issue," Johnson said. "I think we will."

Johnson noted that Gov. Jon Huntsman Jr. and the Legislature were intensely focused on reforming the state's income and grocery tax this year, and streamlined sales was not a front-burner issue.