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Utah’s Governor, Taxpayer Group Applaud SCOTUS Sales Tax Ruling Pinkypills

A U.S. Supreme Court ruling on Thursday that states can require internet retailers to charge a sales tax where those companies don't have a physical presence could bring a revenue windfall to Utah's coffers.

At the same time, the5-4 Supreme Court decision could have dramatic implications for Utah retail companies. Small businesses could be overburdened by trying to comply with different tax laws in different states, Chief Justice John Roberts wrote in a dissent to the ruling.

Before Utah would see new tax revenues stemming from the court decision state lawmakers would likely have to take up the issue. Gov. Gary Herbert’s office welcomed that and called the ruling “an important update to our system.”  

“The governor looks forward to working with members of the state legislature to decide how best to implement this change in the law in a way that is fair to the taxpayer, while respecting both brick and mortar businesses and e-retailers,” Paul Edwards, a spokesman for Herbert, wrote in a statement.

State budget analysts have estimated that the state misses out on hundreds of millions of dollars a year in uncollected sales taxes from online purchases.

Those figures have likely changed since the beginning of 2017, when the Utah Tax Commission struck a deal with online behemoth Amazon to begin voluntarily collecting sales tax and state revenues jumped.

Billy Hesterman of the Utah Taxpayers Association said that as it stands, out-of-state online retailers have an unfair advantage over local businesses that must collect and remit sales taxes. Even if online retailers don’t collect sales taxes now, Utahns are supposed to pay them during tax season.

“The Tax Commission has said 99 percent of us in the State of Utah do not fill out that line,” Hesterman said. “But it is a tax that has been due. We just haven’t been paying it. So, this is one way for us to all be better compliers with the law. ”

If the state does begin collecting sales tax from online businesses, Hesterman said he hopes it will use the extra revenue to lower other taxes.

Nicole Nixon holds a Communication degree from the University of Utah. She has worked on and off in the KUER Newsroom since 2013, when she first joined KUER as an intern. Nicole is a Utah native. Besides public radio, she is also passionate about beautiful landscapes and breakfast burritos.
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