Utah's movement toward what's known as the "streamlined sales tax" -- a program aimed at recapturing revenues lost to untaxed Internet sales -- may be stalling because of a disagreement that raises questions of states' rights versus federal authority.

State lawmakers will discuss the subject during interim proceedings Wednesday, and Sen. Curt Bramble, R-Provo, is scheduled to talk about the issue -- and how the full scope of the program initially wasn't clear to him.

States that impose a sales tax lose an estimated $15.5 billion a year to online sales on which the tax isn't paid, according to the National Conference of State Legislatures. Efforts to find ways to collect that revenue without unduly burdening businesses have been under way for some time.

Utah has taken steps to join 13 states participating in a program organized by the NCSL -- but lawmakers may take a step back now, Bramble said.

The compact that participating states formed is aimed at allowing states to collect sales taxes when residents purchase something online from a business in another state. To participate, Utah needs either computer software that allows businesses to calculate the appropriate tax for all of the state's various jurisdictions, or a uniform statewide sales tax rate.

What's being questioned is whether only businesses in the participating states would be required to collect the tax for other member states, or if all businesses in every state -- even those without a sales tax of their own -- would have to do so.

"We were seeking a federal law that would allow states within the compact to enforce this among the member states," Bramble said. "By implementing streamlined sales tax in Utah ... we were really endorsing the NCSL agenda making this mandatory in all 50 states.

"There's a real problem with that," he said.

For example, if a Utah resident ordered a product from a business in Oregon, where there is no state sales tax, that business would have to collect and remit Utah's sales tax.

Not having that requirement opens up a huge loophole, said Neil Osten, federal affairs counsel for the NCSL.

"The whole system doesn't work if you don't tell sellers in all the states they have to collect," he said.

It's not unprecedented, he added -- for example, a business that sells to a Utah customer can use Utah courts if something goes wrong with the transaction.

"The sellers make the decision to sell into other states," Osten said. "They are taking on certain responsibilities, even consumer protection laws. There's really not that much difference between using those laws and imposing the collection of sales taxes."

Bramble said Utah lawmakers might object to that concept.

"What would prohibit other states from imposing their tax laws on Utahfi" he said, adding that the interim revenue committee could consider a resolution stating Utah's position on the issue.

"If we take a vote of no confidence in that national agenda, that will send ripples to other states that are also having second thoughts on this," Bramble said.

This story appeared in The Daily Herald on page A1.