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February 15th, 2012, 02:14 PM #1Utah: Bill to notify online buyers about sales tax fails 7-6
Bill to notify online buyers about sales tax fails 7-6
A House bill that would require Internet retailers to post sales tax notices on their online transaction pages was voted down Monday by lawmakers in a 7-6 committee vote.
Rep. Wayne Harper, R-West Jordan, has been working on the complicated issue of taxing Internet sales for more than a decade. HB385 had no enforcement mechanism but would have urged Utah purchasers to remit the required sales tax when they file their annual tax returns.
“It’s an effort to level the playing field for brick-and-mortar businesses,” Harper said, noting they compete with out-of-state Web retailers that get close to a 7 percent price advantage because buyers do not pay tax.
A variety of legislative fixes are being considered by Congress, and Harper favors passage of the Marketplace Fairness Act, sponsored by Sen. Dick Durbin, D-Ill., and others. The act would require out-of-state retailers to collect online sales tax at the time of purchase. Until a federal fix is in, states are trying to install a patchwork of options to address the problem.
A legislative review note attached to Harper’s bill warned that it could attract litigation based on the Constitution’s interstate commerce clause.
Dave Davis, president of the Utah Retailers Association, spoke in support of Harper’s bill, saying that it was a matter of transparency.
However, Mark Griffin, general counsel for Overstock.com, said that tax notices for several states, posted in the middle of online transactions, would cause buyers to go elsewhere.
“It’s a thinly veiled attempt to kill Internet commerce,” Griffin said.
Rep. Steve Eliason, R-Sandy, is sponsoring HJR14, a resolution to voice support of the Marketplace Fairness Act to Congress.
Does anyone have knowledge of HJR14?
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