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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. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

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