Sales tax pact gathers cheers

Cash in one hand and fairness in the other.

That's the twin motto behind a national agreement on sales tax that to date has earned the approval of the District of Columbia and 34 states — Utah among them.

In Utah's case, conservative estimates by the State Tax Commission show that at least $50 million and as much as $100 million in sales tax revenue escapes government collectors because of the current collection system.

Obviously, with state budgets straining under revenue shortfalls and many merchants experiencing stagnant retail sales, there's plenty of motivation to revamp the system.

The revamp is called the Streamlined Sales and Use Tax Agreement, a national agreement that shifts the focal point of sales tax collections from the location where the merchandise is sold to the location where the product is delivered.

While the consumer typically doesn't give that detail a second thought, it matters big to retailers who have to collect the sales tax and turn that over to state tax agencies for disbursement.

It also matters to those government money watchers who know large retailers on the Internet are doing a booming business in their state, but don't impose sales tax to pass it along.

But under the agreement, the retailers will collect the tax rate based on where the product is delivered, not where it is sold. In a compromise eked out earlier this year in the 2003 legislative session, cities and towns will retain the 1 percent local tax imposed on all sales regardless, so small communities with big retailers aren't crippled.

The idea behind the shift, said commission chairman R. Bruce Johnson, is to help level the playing field for merchants.

"This brings some simplicity and uniformity that is the right thing to do for business, big or small."

Johnson, a self-described "cheerleader" for the agreement, said of all the national movements to make the shift, this has been the most well received.

"I was relatively optimistic from the beginning, and this has exceeded my expectations. . . . This has moved faster than any of the others, and the only one that has achieved this level of success."

That "level" is the 17 states across the country that have passed legislation to implement the change, with Utah passing its own bill this past legislative session.