Prior to Christmas, Governor Herbert announced a deal with Amazon.com that would have the site collect Utah taxes. Amazon is known to support requiring all online retailers to collect tax (in part to provide Amazon a competitive advantage) and the Utah Legislature has also been making forays for such. At the time, I wondered why Amazon had agreed to do this and figure it had to have some benefit (I was thinking Herbert had assured them he would get the tax bill through the legislature). Evidently, we won’t know much about the deal – Herbert refuses to release the details: Advocacy group wants copy of secret Utah-Amazon tax deal.
Libertas Institute, a Utah group that advocates for personal liberty, was denied a request for a copy of the tax deal struck by internet retailer Amazon and the state of Utah.
They justify the secrecy by saying it is “protected information”. It seems very dubious that government can make such things secret that have no national security value. The only thing we know right now is Amazon is collecting the tax and is getting a kickback that I don’t believe any brick-and-mortar or Utah online company receives:
The State of Utah made an agreement with Amazon where the company gets a 1.3 percent cut of the tax collected.
So it looks like more crony capitalism from the Herbert Administration.
I’m done with it and will actively avoid directly buying from Amazon too (not that I buy much from them anyway). They have plenty of third party sellers who don’t collect the tax (and Amazon doesn’t get the kickback). I’ve also noticed that third party sellers also have their own websites and tend to sell the same product for less thereon. As an added bonus, buying directly from the little guy also allows you to better support small business.
UPDATE: Just checked my messages and low and behold, Libertas Institute is going to follow up on this. Hope they’re successful. Here’s the alert they sent out:
Despite failed efforts to (unconstitutionally) require out-of-state companies to collect and remit the Utah sales tax, the executive branch hasn’t given up its insatiable appetite for tax revenue.
The Utah State Tax Commission entered into a secret agreement with Amazon whereby the e-commerce website would voluntarily do it. The question is, what were they given in return?
We don’t know—and the state doesn’t want us to know.
Next week we’ll be appealing the decision, fighting for transparency—fighting against our own government that refuses to let taxpayers know basic information about secret deals with out-of-state companies.
Edit for transparency: I had initially written that I won’t use Amazon anymore but changed that to “actively avoid”. I got thinking about it and if I am given an Amazon gift card, I’m not just going to give Amazon the money and not use it. Nevertheless, I can use it for a third party purchase on the site and also use something like camelcamelcamel.com to get a sale or best price for an item.