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Proposal would move up online sales tax collection

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Two lawmakers say they plan to introduce legislation in the new year that would require Amazon.com and other online-only retailers with a presence in Indiana to begin collecting sales tax on July 1, 2013, six months earlier than a deal brokered by Gov. Mitch Daniels last January.

State Rep. Ed DeLaney, D-Indianapolis, said Monday that it's unfair that Amazon and other online businesses aren't collecting the sales tax that businesses with brick-and-mortar stores are required to collect.

"There's no reason to give a tax preference to one part of the retail world and not to the rest. That's what we're doing right now," he said.

DeLaney said he believes the online companies should already be collecting the 7-percent sales tax, and that the legislation he and Rep. Tom Dermody, R-LaPorte, will introduce will clarify that. He said he doesn't believe tax collection should be based on private agreements.

Amazon said last year that it needed two years to get ready to properly collect the state's 7-percent sales tax from customers. Daniels announced in January that he had reached a deal with Amazon that it would begin collecting sales tax from Indiana customers in 2014.

The proposed legislation was announced on Cyber Monday, named for the expectation that it'll be the biggest online shopping day of the year.

"It would mean they would begin collecting the tax before another school year begins or another holiday season begins where the online businesses have a 7-percent advantage," Dermody said. "It would just even the playing field for everyone, and the sooner the better."

Indiana Merchants for Tax Fairness spokesman Grant Monahan said online retailers have a 7-percent advantage by not collecting the tax, which people owe but seldom pay on their own. The group is a coalition of more than 300 small-business owners from across Indiana.

"Retailers don't mind competition in the marketplace; in fact they thrive on it," Monahan told WISH-TV. "But they need competition on a level playing field."

Monahan said a statewide poll found that 69 percent of Indiana residents support "a level playing field" in the collection of sales taxes. A report released last week by the Indiana Fiscal Policy Institute and Ball State University researchers estimates the state "loses" about $77 million a year in sales taxes not collected on Internet purchases.

In March, Indiana House leaders headed off a vote for the state to begin collecting sales taxes from online retailers and override Daniels' deal with Amazon.

The state's current policy dates to a 2007 deal with Amazon for it to open its first warehouse in Indiana with the promise that lawmakers wouldn't push for online sales tax collection.

The AP left a telephone message seeking comment from Amazon on Monday.

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  • a deal is a deal
    I thought Mitch made the deal, how can you try and change it now? Amazon probably employs more than a few Hoosiers (better than some of the deals they have made with companies), so you change the agreement and Amazon leaves....why would you want to see more people unemployed. Honestly, even if they should change it, I will still shop online, no traffic, no parking issues.
  • Tax Fairness
    Where were the tax fairness complaints when the NFL sought and received tax avoidance for the super bowl?
  • Not Working in Illinois
    I'll be interested to see what this legislation actually includes. Maybe we should take a look at why this is NOT working in other states before we continue to push it here in Indiana. Check out this timely post from Brian Littleton, a business owner in Chicago. http://brianlittleton.shareist.com/the-continuing-affiliate-tax-issue-in-illinois/

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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