Amazon.com to Start Collecting Sales Tax on all Purchases from Utah Buyers
Preface: Amazon has no physical business presence in the state of Utah. Messages left for Amazon.com officials were not immediately returned. No official statement from Amazon.com has been released.
Amazon.com will collect sales tax on Utah purchases, Gov. Gary Herbert announced Wednesday during a discussion of his proposed $16.1 billion state budget that calls for “aggressively” pursuing taxes owed on online purchases.
“News flash: Amazon has agreed,” the governor told members of the Deseret News and KSL editorial boards. “We have been working to get a voluntary agreement with Amazon, and it looks like we’ve done that now.”
The massive online retailer will begin collecting both state and local sales taxes on purchases made directly from Amazon.com by Utahns on Jan. 1, Utah State Tax Commission spokesman Charlie Roberts said.
Roberts said the commission does not know how much money can be anticipated from the agreement with Amazon.com, signed within the past few weeks. He said the agreement is similar to deals the company has made with other states.
Utah law requires residents who aren’t charged sales taxes on their online purchases to pay them with their state income taxes. But few comply, and efforts over the years to pass a federal law forcing companies to collect the taxes have faltered.
The governor has made going after the estimated $200 million in sales taxes lost annually from online purchases a priority for what he termed a comprehensive review of tax policy that will also look at sales and income tax exemptions.
His budget calls for the creation of a task force made up of business and education leaders charged with promoting “an equitable and simple tax system” by aligning taxes “with the modern economy (not just a rate increase).”
There are no tax increases in Herbert’s spending plan for the new budget year that begins July 1, 2017, put together with a list of principles including a pledge to “live within our means” while paying off government debt and operating government efficiently.
His planned tax review follows the recent launch of the “Our Schools Now” initiative by the business community that would ask voters in 2018 to increase the state’s 5 percent income tax rate by 0.875 percent to raise $744 million annually for schools.
The governor opposed raising income taxes during his successful re-election campaign, warning that would hurt the business sector by killing “the goose that’s laying the golden egg,” a phrase he repeated Wednesday.
Throughout the campaign he stopped short of promising there would be no tax hikes during his term, however. The Republican-controlled Utah Legislature, set to begin meeting in late January, has not been receptive to income tax increases.
Senate President Wayne Niederhauser, R-Sandy, said he supports a review of the state’s tax structure, but a number of the tax exemptions given to businesses, especially from paying sales tax on raw materials, are a “good thing.”
Niederhauser said he agrees with the governor that broadening the sales tax base is the best way to add to state revenues, not raising the income tax rate reduced under Gov. Jon Huntsman Jr. to make the state more attractive to new businesses.
Herbert told the editorial boards that he is “not pushing” the proposed initiative to put an income tax increase on the ballot. He said the state could raise potentially “a couple hundred million” dollars by closing tax loopholes, but did not identify any.
Original Source: https://www.ksl.com/?sid=42481629&nid=148