Amazon tax could provide relief for Park City merchants
Official: ‘I think this is a step towards leveling the playing field’
January 3, 2017
Small retailers in Summit County were in for a surprise early holiday gift this year.
Last month, Utah tax officials announced that the state had struck an agreement with Amazon for the online retail giant to begin collecting sales tax from Utahns effective Jan. 1. Consumers who enjoy the convenience and two-day shipping Amazon offers may not be pleased when they see how much more they owe at check-out, but the move could provide brick-and-mortar merchants with much-needed relief in their struggle to stay afloat in the age of online shopping.
According to Jeff Jones, director of economic development for Summit County, the impact on small companies could be large, depending on how directly they compete with Amazon. He said it's not uncommon for local merchants to feel left behind in the internet era, and the state's agreement with Amazon could give them reason for optimism.
He told the story of a friend who owned a small business and lost out on sales because customers could find the products on online without having to pay sales tax. It's companies like that, he said, that will benefit most from the agreement.
"Customers would come in, and he'd work with them for two hours, sizing boots," he said, "Then, they would leave and go buy the boots online somewhere because they could save money. So I think this is a step towards leveling the playing field."
Legally, Utah residents are already supposed to include sales tax payment for online purchases when they file their taxes each spring, but the state says few actually do. That aside, Jones acknowledged that the agreement may make some Summit County residents bristle, whether because they're upset at paying higher prices on Amazon or due to philosophical beliefs about taxes.
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However, Jones is optimistic the revenue from the sales tax — the state claims as much as $200 million in tax revenue is lost each year — could further help small businesses by stimulating the local economy, although it's unclear how much money will be funneled back to Summit County.
"It's hard to tell until we know what the number is, but that tax is redistributed to local governments or the transit district or things like that," he said. "Potentially, there are dollars there that can be used to offset current costs of plowing roads for snow and street maintenance and everything. … That could benefit local communities."
For some small retailers in Summit County, the Amazon agreement is of little consequence. Dean Tutor, who owns Indigo Highway, a clothing and general goods store in Kimball Junction, said his business can't compete head on with a company like Amazon, regardless of whether it charges sales tax.
So he and his wife set out to build their business in a way that differentiates it from online retailers and offers customers something he said Amazon can't: excellent service and a memorable shopping experience. Tutor and his wife, Jen, gift wrap purchases for customers, provide personal knowledge about the products they sell and aim to forge personal relationships with the people who come through the door — a warm touch they hope encourages people to return time and again.
Jen Tutor said they are trying to provide the "polar opposite" of an impersonal online shopping experience. If they're successful, they believe, they won't have to worry too much about the Amazons of the world.
"If I go somewhere and I leave feeling good and I had an experience, I remember it," she said. "It's about the relationships and the people and about knowing our customers when they walk through the door."
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