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The Utah State Tax Commission is keeping confidential the details of a new deal for Amazon — which makes an estimated 21 percent of all online sales — to collect sales tax for internet purchases made by Utahns.
The commission this week denied an open-records request for that information, filed by the Libertas Institute, a Salt Lake City-based group that says it fights for liberty.
Commission spokesman Charlie Roberts said Tuesday that disclosure is not required under Utah's Government Records Access and Management Act (GRAMA). "The reason is it is commercial information and would provide undue advantage for competitors" if released, he said.
Connor Boyack, president of the Libertas Institute, disagreed.
"Taxpayers have a right to know what terms their government agreed to in order to have Amazon collect a tax that they are not legally required to. This agreement should be public for all to see," he said.
"After failed attempts to deputize out-of-state-companies as tax collectors for the state, Gov. [Gary] Herbert and the Utah State Tax Commission have somehow persuaded Amazon to voluntarily collect the tax and keep a piece of the pie themselves," Boyack said, adding that it should be public because it involves a large amount of tax money.
Roberts has said that Amazon will receive the same 1.31 percent of the taxes-collected handling fee that in-state retailers receive for collecting sales tax.
Boyack said Libertas is discussing the denial with attorneys and will decide soon whether to appeal denial of its request to the State Records Committee.
Under Utah law, internet retailers are required to collect sales tax for online sales only if they have a physical presence in the state, such as a store or distribution center.
Otherwise, buyers in Utah are required by state law to pay the sales tax themselves by adding it to their annual income tax return, but few do. Estimates about how much the state loses every year from unpaid sales tax have ranged between $80 million and $350 million a year, with the governor's office putting it around $200 million.
Legislators have proposed bills to force more automatic collection by online retailers — and more are expected this year — but they have failed under pressure by the online industry and groups that say it would be a tax increase, even though that tax is already technically owed.
Herbert has said that collecting more of the owed-but-unpaid online sales tax could help eliminate the need for the proposed Our Schools Now ballot initiative that would increase state income taxes for education by $750 million a year.
Tax Commission Chairman John Valentine told The Salt Lake Tribune last week that the commission has no reliable estimates about how much online sales tax the state may be missing after the Amazon deal.
He said it may be able to develop an estimate after looking at receipts from Amazon and Airbnb (another company with an online sales tax collection deal) after several quarters. Airbnb also released a report Tuesday that estimated how much from deals it is making to collect taxes online could mean for governments. It said the 50 largest cities in the United States could have collected a total of $250 million in hotel, tourist and occupancy taxes from Airbnb in 2016.
Jonathan Johnson, chairman of Overstock.com, who ran against Herbert for the GOP nomination last year, wrote an opinion column in The Tribune on Sunday saying he doubts that much sales tax remains uncollected after the Amazon deal and the taxes collected by large Utah online retailers like his.
He called for legislation to study about how much escapes collection. If, as he suspects, most online tax is collected, he called on lawmakers to follow through with promises to lower tax rates if the tax base has been spread out adequately to online retailers.