Michael O. Leavitt Center for Politics & Public Service

Project Prologue

Sounding the Warning

About the time of Governor Leavitt’s inauguration, internet was becoming a unbiquitous presence in the lives of Americans. wow gold Cameron Newton – Auburn Tigers The growth of electronic commerce was anticipated to eclipse the growth of normal “bricks and mortar” retail activity. Zapatillas Air Max Nike Noted economists and like Lester Thurow and Austin Goolsbe were predicting that half the store-fronts on main street would be vacant by 2010. Many people thought the convenience, selection, and economies of scale available to electronic retailers would drive traditional retailers out of business. Nike Air Max 2017 Heren grijs That eventuality would have profound impact on state and local tax revenues. Utah has a fairly balanced tax system in many ways. It has a property tax, which is a tax on wealth. Mochilas Fjallraven Kanken Jered Weaver Baseball Jersey That tax is imposed on wealth. ADIDAS ULTRA BOOST 2017

Scarpe Kobe 11 It is assessed by County Assessors and collected by County Treasurers. Air Jordan 5 Retro Minnesota Timberwolves

nike air max vente Canotta Milwaukee Bucks The taxpayer receives a bill each year for his or her tax, without any effort on the taxpayer’s part. Minnesota Timberwolves

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The state has an income tax, which is a tax on income. Although much of the tax is collected by employers through wage withholding, the income tax is essentially “self-assessed.” Each taxpayer files his or her own tax return every year, declaring income and computing the tax due. Nike Free Run 5.0 Blu Uomo

South Florida Bulls Jerseys adidas zx 850 mujer The state also has a sales tax, which is a tax on consumption. Texas Longhorns That tax is computed and collected largely by retail businesses in Utah, who collect six or seven cents on every dollar of taxable sales they make within the state. Yeezy 350 Boost

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If the retailers are out-of-state retailers, Quill says they don’t have to collect Utah sales tax on sales to Utah customers. Julian Edelman Jersey Asics Pas Cher Canotte Milwaukee Bucks This has profound implications for Utah’s tax base. It is true that there is a compensating use tax in Utah; that is, if a seller fails or is not required to collect the sales tax on a taxable sale, the owner of the property is nevertheless subject to a compensating use tax. ULTRA BOOST The state is quite successful in collecting that tax from large, sophisticated businesses. Air Jordan 4 (IV) They understand their obligations, there is wide audit coverage, and they accrue and pay their own use tax on a regular basis. Nike Air Huarache Heren The situation is quite different, however, for individual citizens’ purchases for personal consumption. solde adidas chaussures pas cher Of course, there are a few thousand knowledgeable and honest taxpayers who do accrue and report use tax on their individual income tax returns. NIKE ROSHE RUN air jordan 5 oreo damskie In 2000, for example, about 4,000 individual returns reported about $205,000 in use tax. Nike Air Max Goedkoop The next year, about 5,500 returns reported a total of almost $250,000 in use tax. Most individuals, however, do not understand or comply with their obligations. Nike Air Max 2016 Heren zwart The returns reporting use tax comprise less than ½ of 1% of all individual returns filed. NCAA Jersey Shop And, because the number of taxpayers is large and the amount of tax that would be due from any individual taxpayer is small, there has been little audit coverage in the area. nike air max 1 og colorways Indeed, given the numbers, an intensive audit effort would only be cost-effective if it had an in terrorem effect on the rest of Utah’s citizens.4 Moreover, income tax audits, which focus primarily on income and deductions that a taxpayer voluntarily chooses to claim are intrusive enough. Houston Cougars Maglie Denver Nuggets A use tax audit that focused entirely on personal consumption would be viewed by many as a significant and unwarranted invasion of privacy. Chris Jones Curry Due Gs Under those circumstances, a migration of a significant portion of Utah retail sales from local retailers who collect the Utah sales tax to internet retailers who do not collect the tax would have a potentially devastating effect on Utah’s budget. Yunel Escobar Baseball Jersey We have briefly described Utah’s tax structure above. nike air max norge fjallraven kanken pas cher The income taxes are constitutionally dedicated to education. The property taxes are dedicated primarily to local governments and the school fund. Asics Gel lyte 3 Heren Air Jordan 11 Retro
North Carolina Tar Heels Jerseys Gasoline taxes are dedicated to highway and road funding. Ohio State Buckeyes The sales tax provides virtually of all the state source revenue that goes to the general fund. fjallraven kanken pas cher There is also a multiplier effect at work. Womens Air Jordan 5 Internet retailers may or may not be able to compete effectively with local retailers based on their business models. Air Jordan 4 For Kids But if customers perceive they can save 6 or 7% of the purchase price by avoiding sales tax, the competitive advantage is even greater. air max 2017 blu uomo

Nike Air Max 2017 Kopen There is simply not a level playing field between bricks and mortar and internet retailers. new balance 1600 on feet air max 2017 donna

This competitive disadvantage drives more customers to the internet and reduces sales tax revenues even more.

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Michael O. Leavitt Center for Politics and Public Service