Amazon to collect Utah sales tax for online purchases beginning New Year’s Day

Posted at 11:42 AM, Dec 31, 2016
and last updated 2016-12-31 13:43:15-05

SALT LAKE CITY — If you’re going to be doing a little shopping on Amazon today, it’s your last chance to do it “tax free.”

Effective January 1, 2017, the Internet sales behemoth will begin collecting Utah’s state sales tax. It’s part of an agreement between Amazon and the Utah State Tax Commission. Amazon will collect both Utah’s 4.7 percent sales tax rate and local option sales taxes, the commission has said.

Utahns are supposed to pay sales tax on online purchases, but few actually report it to the tax commission and many online retailers do not include it in the shopping carts. Governor Gary Herbert has long complained that a lack of sales tax from online purchases has cost the state as much as $200 million a year in lost tax revenue. As a part of his new budget, the governor included a push for online sales tax collection.

“We would not tolerate anybody cheating on their income taxes, we should not tolerate people cheating on the sales tax portion of their obligation,” Gov. Herbert said earlier this year.

Amazon’s agreement with the state allows them to keep a percentage of the tax collected, but it is unclear if the retailer will. Utah is the 30th state to reach an agreement with Amazon to collect sales tax.

State lawmakers have considered bills that would require online retailers to collect sales tax, but they’ve failed in the face of public criticism and push back. It is expected the Utah State Legislature will take up online sales tax collection again in the upcoming 2017 session.