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State Lawmakers Advance Online Retailer Tax

A bill that would require some out of state internet retailers to collect sales tax from Utah customers narrowly passed the UTAH Senate  this morning. But if SB 226 becomes law it could be challenged by the Justice Department.

Federal law prohibits Utah from collecting sales tax from online businesses unless they have an office or storefront in the state. SB 226 would expand the rule to include remote retailers who use local advertisements or forge other local agreements.

GOP Senator Steve Urquhart opposed the bill. He questions its legality and the message it sends to businesses.

 “The message that is received by this bill is that we don’t want them,"he says. "And they will stay away. They won’t expand in this state. I think that we’re doing significant damage to ourselves with this bill.”

Senate President Wayne Niederhauser supports the bill. He says out-of-state internet sales are diverting tax dollars away from Utah when the state needs it most.

 “We’re going to be faced with Medicaid, transportation, higher ed costs and a shrinking tax base," Niederhauser says. "What happens is we’ll have to raise taxes on a smaller base.”

He says the issue should be addressed at the federal level, but Congress continues to delay action. The bill passed 15 to 12 and will be transferred to the House floor for consideration. 

Whittney Evans grew up southern Ohio and has worked in public radio since 2005. She has a communications degree from Morehead State University in Morehead, Kentucky, where she learned the ropes of reporting, producing and hosting. Whittney moved to Utah in 2009 where she became a reporter, producer and morning host at KCPW. Her reporting ranges from the hyper-local issues affecting Salt Lake City residents, to state-wide issues of national interest. Outside of work, she enjoys playing the guitar and getting to know the breathtaking landscape of the Mountain West.
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