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Herbert: Sales Tax Revenue Not What It Could Be

upr.org
Gov. Gary Herbert.

Income tax revenues in the state of Utah are up. While that is an indicator more Utahns are participating in the job market, it may not reflect completely where and how they spend their money. The collection of sales tax is reported to be less than what was previously expected.

When it comes to sales tax, Gov. Gary Herbert said that online shopping has made collection more difficult. He said that Utah could be missing out on 75 percent of potential sales tax money.

“We have a net increase $91 million in sales tax. The number should be $180 million larger. It’s not that we are not having a healthy economy; income tax is up significantly,” Herbert said. “But what is happening is the shift in the marketplace with people buying products more online. We have what we call ‘leakage;’ we have taxes that are owed but are not being collected by anybody.”

Utah’s missed opportunities with online sales tax go back to the 1990’s. Herbert said that collecting it is not a matter of increasing taxes, but clarifying tax law.

“This discussion actually goes back to the days of former Gov. Mike Leavitt so this has been on the table for a long time. Congress keeps kicking the can down the road,” he said. “So, we are now going to be in conversation with [U.S. House] Speaker [Paul] Ryan to see if we can pick up this baton and see if we can’t get it passed. I think we have a great opportunity to do that. It’s good for the taxpayer and, frankly, if we could pick up this this $180 million which is owed to us, it would allow us actually to probably provide some tax cuts and some relief to the tax payer.”

Most of Utah’s Congressional delegation is in support of online sales tax.