Amazon.com will begin collecting sales tax on purchases made by Utah residents. The online retail giant has come to an agreement with the state of Utah to begin collecting state and local sales taxes beginning January 1, 2017.
State fiscal analysts say the state loses out on millions of dollars every year because people don’t self-report when they file their taxes.
“It goes back to the Sears catalog days,” says Utah Tax Commission spokesman Charlie Roberts. “By state law we’re required to pay the use tax, but with more and more of us purchasing items online it becomes quite onerous to track those purchases.”
Roberts says it will help small and locally-owned businesses compete.
“They’ve been collecting taxes and it’s challenging for them to compete against online businesses,” he says. “So this helps level the playing field a little bit.”
Amazon currently collects sales tax on behalf of about two dozen other states. Roberts says money collected from the company will go into the state’s general fund to help pay for public safety and social services in Utah.