Online sales tax could hit Utah companies
- Aug 30, 2011 | Steven Dunston
Internet companies that have set up shop in Utah may be faced with collecting additional sales tax. Overstock, Backcountry, Ancestry and others have major operations in Utah, and do not collect sales tax on transactions in more populous states such as California. But that would change if pending legislation is passed, requiring Internet companies to collect sales tax on transactions in states where they have no nexus:
Losses from not collecting state and local sales taxes from Internet purchases will expand from $8.6 billion in 2010 to $11.4 billion in 2012, according to a University of Tennessee study. For Utah, that would mean about $110 million in annual lost revenue. Last year, the state received $467,000 from 8,200 taxpayers who voluntarily reported sales tax they owed.
Overstock and Backcountry declined to comment on potential losses, but each said they would comply with the measure if it became law. Ancestry also declined to comment. —Deseret News