SALT LAKE CITY — With Tesla sales direct to consumers still illegal in Utah, a state lawmaker implored a small group of her conservative colleagues to suggest possible solutions to end the political gridlock.
Rep. Kim Coleman, R-West Jordan, said Wednesday she's been holding multiple meetings with "everyone at the table" to come up with a livable solution that would allow Tesla to open its doors on State Street to sell its pricey, all-electric vehicle.
"Nobody sees a path to compromise," she said, during an early morning meeting of the Legislature's Conservative Caucus. "There is no gray in this."
At issue are state laws — Utah is not alone — that prohibit manufacturers' direct sales of new automobiles to consumers, except through independent franchised dealers.
Coleman said Utah's law aimed at protecting dealers from the potential predatory practices of manufacturers has been on the books for a century, so it is not something that is lightly undone.
"This is something that you don't do overnight," she said, later pointing out that 17 percent of Utah's sales tax revenue derives from the sale of new cars, servicing and warranties — numbers that are critical to state coffers.
Last session, her measure, HB394, barely survived a committee vote and then died on the House floor with a vote of 32-41.
The proposed law would have granted an exemption to Tesla, which sunk $3 million into a showroom at 2312 S. State, with a plan to open its doors last March. Instead, the manufacturer was barred from opening its doors for sales just a few weeks from its scheduled launch date after the Utah Attorney General's Office said the company would be in violation of state law.
Coleman said there was a sense by some dealer opponents that Tesla tried to skirt the law.
"There was a feeling that Tesla came in and invested $3 million and then asked for forgiveness instead of permission, and that is wrong," she said.
The Utah State Tax Commission, she pointed out, requires companies to make an investment in the state before classifying them as a business — so Tesla was following the correct regulatory path, she said.
"The application says that they must make an investment."
Utah, she added, is under some pressure to arrive at a compromise given the action taken in other states, including New Jersey where the law was revamped this spring to allow direct sales of the high-performance Tesla.
In May, the Federal Trade Commission delivered a sharp rebuke to Michigan, which was contemplating granting a similar exemption for the direct sale of autocycles.
The commission said the measure did not go far enough and instead perpetuated current "protectionism for independent franchised dealers to the detriment of Michigan car buyers."
The regulatory agency added its belief that "consumers are the ones best suited to choose for themselves both the vehicles they want to buy and how they want to buy them."
Laws that prohibit manufacturer sales to consumers are an "anomaly within the larger economy," and eliminating the option of direct sales is in contradiction to competitive business practices, the FTC said.
Coleman said the FTC, while taking a strong position on the matter, lacks the authority to upend a state law.
Local dealerships, too, have offered to sell Tesla automobiles in Utah, Coleman said, but Tesla company officials have said that situation undermines their contention that electric vehicles are superior to those with combustion engines.
Since the end of the session and the failure of her measure, Coleman has been meeting with used and new car dealerships, the governor's office, Tesla and anyone else with a stake in the matter.
"I have committed to them that there does not need to be tactical play behind the scenes because I am listening to everybody," she said. "Everybody has a voice at the table."
She added that the governor's office, too, wants to see some resolution in the case by addressing it in a special session.
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