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Bill to Cut Internet Sales Tax Defeated

  The Utah House of Representatives rejected a plan Wednesday to stop the state from cashing in if Congress allows sales tax for more online transactions.

The Marketplace Fairness Act would allow states to collect sales tax on purchases made online – whether the retailer is physically located in that state or not

If it passes, states like Utah could receive a revenue windfall – well over a hundred million dollars a year.  Republican Representative Jim Nielson wanted to make sure that didn’t happen.

During debate on the House floor, Nielson said, “The proposal here is to take our sales tax rate, and, subject to collection of internet sales tax, reduce that rate so it is roughly revenue neutral.”

Nielson’s supporters in the House argued that allowing revenue to rise would be the same as a tax increase.

Opponents, including Democratic Representative Joel Briscoe, say the legislature needs to wait until Congress makes a decision, though he says he understands the problem.

Briscoe explained, “They go to RC Willey and they scope out the TV they want, and they go home and go to and they save themselves a hundred-plus dollars.”

In the end, the House rejected HB 224 by a vote of 47 to 26, so the idea is dead for this session.

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