By: Kelvin Childs The Utah House of Representatives killed a proposal to end newspapers' exemption from the state sales tax. House Bill 80, sponsored by state Rep. David L. Zolman Jr., R-Taylorsville, was defeated 48 to 24 on Feb. 9. The measure would have required newspaper wholesalers to collect a tax of about 5 cents per copy.
Zolman says there was a compelling reason for the exemption when it was created in 1937, because newspapers were sole providers of community information such as obituaries, wedding announcements, and listings of Eagle Scout awardees. The exemption is no longer justified, he says, in an age where information is freely available from the Internet and other sources. He also says it is unfair for the 60 percent of Utah residents who don't buy newspapers to subsidize newspaper subscribers.
However, newspaper publishers saw the proposal as a logistical nightmare. Dominic Welch, president and publisher of The Salt Lake Tribune, says that in order to comply with the state tax code, carriers would have to collect the tax. "They're talking about raising $3 million total. I think it would cost that much to collect it," he says.
Zolman cedes that some of the 13 states that collect sales taxes on newspapers had difficulty making the change. "Texas had a terrible nightmare in getting newspaper boys and newspaper girls to collect it," he says. But, he says, having wholesalers collect the tax would not run afoul of the tax code.
Publishers also worried that passing on the tax could drive away readers. "Most of our subscribers in our rural areas are very sensitive to price increases," says Janice Keller, executive director of the Utah Press Association,who lobbied against the bill.
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