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Business & Economy

Utah Congressman's Bill Would Collect Taxes for Online Purchases

Don Brubeck
Flickr Creative Commons
Brick and motar stores throughout the nation say its unfair that they have to collect sales taxes while online retailers selling the same products don't.

Congress is considering an Internet sales tax once again. This time the effort’s being led by U.S. Rep. Jason Chaffetz, R-Utah.

The question of collecting sales taxes on Internet transactions has been debated for years. It’s not about taxing Internet use. It’s about getting people to pay sales taxes on what they buy online, just like they do at stores in their neighborhoods.

Roger Tew is a former state tax commissioner and an advisor to the Utah League of Cities and Towns, which has supported the move from the start.

“I think there’s a growing feeling everywhere that there is a certain basic unfairness,” he says. ‘Also, you’ve got some huge entities that have decided that they’d rather collect the tax than continue to fight the legal battles.”

That’s one reason Tew thinks there’s a good chance for Congressman Jason Chaffetz’s new bill -- even though similar legislation stalled last year. Tew points out that people who buy things online are legally obligated to pay sales taxes, but most don’t.

Kate Bradshaw, vice president of the trade associations representing retail merchants and the food industry in Utah. She says the uncollected sales taxes mean about $200 million less revenue for government services.

“That’s a growing amount of sales tax that the government is losing and particularly impacting cities and counties, where a lot of that sales tax usually ends up,” Bradshaw says.

The new legislation is supposed to make it easier for buyers to pay the tax owed and for online retailers to collect it, but critics of the legislation say it will inhibit online commerce. 

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