Bill seeks earlier date for online retailers to collect taxes

Back to TopCommentsE-mailPrintBookmark and Share

Hoosiers may be required to pay a 7-percent sales tax on top of their Amazon purchases starting July 1 if a proposed House bill is adopted.

The bill moves up by six months a deal Gov. Mitch Daniels struck a year ago with Amazon for the online retailer to begin adding the 7-percent tax onto purchases by Hoosiers beginning in 2014.

House Bill 1007 calls for online retailers with a presence in Indiana to begin collecting sales taxes, just as brick-and-mortar retailers are now required to do.

Rep. Tom Dermody, R-LaPorte, said the bill could generate an additional $77 million in tax revenue for the state. Currently, consumers are required to report their online purchases and pay the tax themselves—but few do.

Moving the deadline up by six months would allow the state to capture taxes from online purchases made during the busy holiday shopping season.

Dermody said the bill is about leveling the playing field between online retailers and brick-and-mortar stores.

“The retailers are not asking for any special deal,” Dermody said, “They’re just asking for fairness.”

Dermody said he hopes the bill would help curb the so called show-rooming effect, which occurs when consumers check out merchandise in a store, only to buy the same product online where they do not have to pay sales tax.

“People go in and look at products and they don’t just go home and order them, sometimes they order [online] right in the store,” said Rep. Eric Turner, R-Cicero, a co-author of the bill.

Rep. Steve Braun, R-Zionsville, spoke in a committee hearing about how online retailers were originally given the sales-tax exemption in an effort to help the public gain acceptance of doing business over the Web. Those days have come and gone, he said.

“There was a time it made sense to give breaks to these start-up online companies to help them out,” Braun said. “But not anymore.”

Bill Waltz of the Indiana Chamber of Commerce said online retailers always should have been required to collect sales taxes.

“Its not that we have anything against the Internet business,” Waltz said. “But if they are going to be here, like they are, they are going to collect sales tax.”

Waltz said that bill was not an “anti-Amazon bill” because Amazon has already agreed to start collecting sales tax in the future.

Lawmakers are sensitive to any accusation they are targeting Amazon in part because the retailing giant has created thousands of jobs in Indiana. The company last year announced plans to build a fifth Indiana distribution center as part of a $150 million expansion.

“Amazon is not the bad guy here. They came to the state and said they wanted to negotiate a deal,” Dermody said.

New Jersey, Pennsylvania, Arizona and Texas have already negotiated the same deal with Amazon to start collecting a sales tax.

Some say the sales-tax issue should be handled by Congress, not by individual states. Katrina Hall of the Indiana Farm Bureau said they have urged the American Farm Bureau to increase lobbying efforts to pass legislation in Washington, D.C.

Grant Monahan, president of the Indiana Retail Counsel, also said during the meeting that the change needs to come from Congress. He said federal lawmakers have been debating the Marketplace Fairness Act for years.

“It’s gotten some attention. It’s gotten public committee hearings, but nothing more than that,” Monahan said, “That bill will be reintroduced this new Congress, and I am hopeful that Congress will act on that.”


  • A Deal is a Deal
    The last thing the state wants to do right now is welch on a deal made, especially with Amazon. Bezos is well connected to wall street and to other top CEOs in the country. If Indiana welch's, good luck luring other business in. One good point already made above is if brick and mortars store think this is going to save them , they are going down the wrong alley. Sales were horrible nationwide this Christmas. It looks like retailers here are getting desperate for back to school and Christmas to be good to them if they could only stop web stores cold with sales tax. They should think longer term that the more jobs Indiana can bring in the better chance they'll have to survive. Welching on a Deal made is not going to make that happen. They also need to look at how they conduct business from stem to stern. Retail has always been hard but there is always enough successful retailers out there who really work at it that makes lobbying for weak retailers look silly.
  • Law Will Create Tax Losses
    Every time our legislature tries this and the media reports on it, a huge piece gets left out of the reporting. Under the U.S. Constitution, Indiana can only collect taxes from out of state retailers if they have specific ties within Indiana. NOT just if they sell to Indiana residents. This law would try to say that website owners in Indiana are enough to create that tie. What has happened in other states is just that the stores quit advertising on those websites so that they no longer have a tie to the state. The end result is that those of us in the state who own web businesses will lose our jobs and the stores still will not have to collect the taxes. It has happened in multiple other states including California, Colorado, and New York. It's an important part of this issue that keeps getting swept under the rug.
  • Why?
    I don't understand why they need to move up date if the state really does not need the money. This sounds a bit odd.
  • Not going to help
    We need to tax the little guy more in order to support the Simons, Irsays and Ozdemir's. If brick and mortar businesses think this is going to save them they are sadly mistaken.
  • Republican Theme
    It seems like every article posted by IBJ is about another republican politician trying to raise taxes. That seems to be the republican theme this year at all levels of government. What's the point of voting for these guys if they're going to act like democrats?

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help