Flagged Bill: SCR 2 Concurrent Resolution in Support of Sales and Use Tax Transactional Equity – Sen. Wayne Harper

Senator Wayne Harper (Republican - Taylorsville)
Senator Wayne Harper (Republican – Taylorsville)

Hey you, yeah you. Remember all that internet shopping you did over the holiday season? Of course you do – it was fantastic. Do you remember all the taxes you paid on those purchases? Of course you don’t – because, odds are, it was never levied against you. But you are a good citizen and kept track of all those purchases and fully intend to pay your taxes on the items come April 15th right?

Wait, you probably won’t? Is it because it is nearly impossible to even remember all these purchases, let alone follow up on them and then accurately report? Is it also because there is no practical way for the state to punish you if you don’t remember to report short of a full-scale investigation?

[pullquote]Taxing goods on the internet is a joke. Senator Wayne Harper is looking to help make things a little easier by supporting a member of our federal delegation.[/pullquote]Well, don’t feel too bad, you are not alone – very few actually report the proper amount of taxes due from internet sales because, frankly, through malice or ignorance, millions of sales tax dollars are lost each year as online shopping becomes ever present. The burden is on the people to remember and, frankly, they don’t.

The issue of collecting sales taxes from internet sales is bigger than Utah, requiring federal action to take place. None other than Utah Representative Jason Chaffetz (Republican – Sandy, Provo, South-East Utah) has introduced the Remote Transactions Parity Act (RTPA) to help address the issue of interstate commerce through electronic sales where a home base of operations (and, therefore, a home state to tax from) is difficult to determine.

The act does many things, but most notably, it would put the onus of tax payment on the seller, rather than the buyer. Sellers would have to remit tax payments to each state that they sell to – tracking individual tax rates for each (there are exemptions for small businesses).

Supporters say that such a measure will level the economic playing field by removing the de facto discount on goods that have no taxes levied on them whereas critics are concerned that the law would extend government’s ability to tax beyond the state’s borders, opening a brave new world of interstate taxation that the public may not appreciate.

Needless to say, lawmakers would like the bump to sale tax revenue associated with the passage of the RTPA, and Senator Wayne Harper (Republican – Taylorsville) is looking to give the act a little extra bump by proposing SCR 2 – Concurrent Resolution in Support of Sales and Use Tax Transactional Equity.

As action needs to take place on a national level, Harper’s resolution will do little in actually bringing about direct change. But federal lawmakers such as Chaffetz do consider the desires of states when voting for passage of pieces of legislation such as this.

Is the RTPA the perfect solution to the online tax debate? Probably not. But what the RTPA does do is recognize that the status quo is harming states and their ability to provide services. The sudden taxation of e-commerce (which actually has been on the books for years, but was unenforceable) would have a chilling effect on the market, but if we as citizens demand that our government provide infrastructure and social services, we must be willing to pay for them.

The RTPA is a start of a discussion, and the state of Utah throwing its support behind it will, in its own little way, help the discussion move forward.

To contact Senator Harper, click here or call 801-556-5466 (Home).

You can track this, and all of our other flagged bills, by clicking here. Need an explanation of scores? Click Here.

Impact on Average Utahn 0-1-2-3-4-5
Need for Legislation 0-1-2-3-4-5
Lemon Score 0-1-2-3-4-5
Overall Grade B

 

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