Simon Property Group Inc. has filed suit against the Indiana Department of Revenue in an attempt to force the state to collect sales taxes from Amazon.com Inc.
The Indianapolis-based mall powerhouse said it filed the suit Thursday not to collect "monetary damages" but to level the playing field for Indiana's brick-and-mortar retailers including the tenants at its 27 Indiana shopping centers.
The lawsuit, filed in Marion County Superior Court, claims the state's "illegal and unconstitutional" decision to exempt Amazon from sales-tax collection gives the giant online retailer "an unfair advantage in the market."
The suit cites a study by professors at the University of Tennessee that estimates Indiana will forego about $195 million in revenue in 2012 alone by failing to compel out-of-state retailers like Amazon to collect sales taxes.
Simon earlier had requested that the state begin collecting sales taxes on purchases made from within the state's boundaries on Amazon.com. Online retailers typically are required to collect sales taxes on purchases from within states where they have a physical presence, but Indiana has not forced the issue with Amazon.
The decision by Indiana officials to take a kid-glove approach was an important factor in Amazon's decision to open four local distribution centers that employ thousands of Hoosiers. Of course, traditional retailers employ many thousands more.
"Main Street retailers are being harmed by this unequal playing field in Indiana and their existence is being jeopardized," Simon said in a prepared statement. "As a proud Indiana company which employs thousands of Hoosiers, Simon Property Group believes we have a responsibility to ensure the laws are equally applied to everyone."
Amazon has faced pressure in most of the states where it operates to collect sales tax, particularly as state coffers dried up during the recession. The company has argued the sales-tax issue should be decided at the federal level, something state Sen. Luke Kenley of Noblesville is pursuing.
The office of Gov. Mitch Daniels had not yet seen a copy of the suit, said spokeswoman Jane Jankowski.
In an October letter to State Rep. Bill Crawford, D-Indianapolis, Indiana Office of Management and Budget Director Christopher A. Ruhl said a state analysis estimated Indiana at most loses out on $25 million annually by not collecting sales taxes directly from Amazon.
The letter acknowledged that Amazon is the state's largest "non-remitter" of sales taxes but suggested the federal government would have to weigh in.
"A national solution that simplifies for all businesses the varying, complicated and burdensome collection requirements imposed by thousands of independent tax collecting jurisdictions remains the optimal solution," Ruhl wrote. "Further, Congressional action may be the only mechanism to overturn U.S. Supreme Court precedent that has precluded states from mandating collection of sales tax from remote retailers."
Simon CEO David Simon has made no secret of his annoyance at the tax advantage Amazon enjoys, summing up his position at an address to the Economic Club of Indiana in 2010.
“[The] Internet has a distinct advantage, which in my opinion is unfair,” he said at the time. “And hopefully we’re looking for fairness in our tax system. If you sell it in the physical world versus the virtual world, it ought to be the same. We need to level the playing field tax-wise.”
Amazon in July announced plans to open a second warehouse in Plainfield, its fourth in central Indiana. In total, Amazon said it will occupy about 3 million square feet of space and employ "thousands" of Hoosiers.
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Simon is just looking out for its own business interests which any good business would. The problem lies within our own government and the career politicians we seem to put back in office time and time again because they seem to say just the right thing around election time(because we don't take the time to check their voting record)and after being reelected they go right back to their own self serving interests.
If the government were a business and treated as such do you really think it would have made it past the 5 year mark, the answer is no, it would have been forced to file for bankruptcy and been put to sleep but because there is a seemingly unlimited supply of money at its disposal it keeps sputtering along at our expense.
Let me say I do not have a problem with Simon or Amazon. I do have a problem with our government seemingly to need more and more of our tax dollars to survive and no end in sight as to the creative ways it can come up with to get at said dollars.
Take a look at some of these posts here we are blaming each other and the real culprit is setting back letting the people itâs suppose to be serving do its bidding so that it (the government) can legally take more of our money (and we feel good about giving it to them it because itâs going to level playing field) then decide where and who to dole it out to, are we nuts?
We keep throwing good money after bad into the same system and expecting a different result; the system is broken and seriously needs to be fixed from the top down!
Second, local companies pay business taxes here because they benefit from things like police protection, streets leading to their businesses, fire protection, etc. Businesses that are out of state do not benefit from any of that. Tax incentives are frequently used by states and counties as a way to entice businesses in order to create jobs.
Third, as far as all of the online companies that do not have distribution centers here, the U.S. Supreme Court has held that under the Commerce Clause a business must have a "nexus" in a state for that state to force the seller to collect taxes on the sales. Simply allowing people in a state to buy your products and then shipping the products to them from another state does NOT create a nexus. For Indiana to require out of state merchants to collect the taxes would violate the Constitution and open the state up to a federal lawsuit such as the one between North Dakota and Quill (which North Dakota lost).
Lastly, if you look at the small number of states that have succeeded in passing a tax like this in the past you will see utter chaos. Illinois passed a tax recently and is already talking about repealing it because they lost revenue and jobs. The state is also now being sued in federal court. California passed a tax and the people immediately started pushing for a referendum to have it blocked. Two states that have passed similar laws in the past (Rhode Island and Colorado) are now looking at repealing the laws because no additional revenue was collected and small businesses were actually hurt.
This is just stupidity on Amazon's part and a lack of backbone on Mitch Daniel's part.
Not to mention state and local income taxes paid by the Indiana employees of these stores and all the spin-off that commercial development provides.
This change is long overdue.
I hope that those who defend Amazon's right not to collect IN sales tax are not the same who complain about having to pay more for school buses, textbooks etc., because the state is taking in less money.
Actually this is not the case. If you purchase something from Macy's on-line, you will pay Indiana sales tax as Macy's has stores in Indiana. Below is from Macys web site:
Macys.com charges sales tax based on the State where the recipient is located, or if that particular state has a Macy's Department Store location. The sales tax charged is based on the current tax rate for the state where the shipping address resides. The sales tax will be calculated accurately once your order has been submitted and processed in our system. If your state is a non-tax state, your taxes will be removed once your order has been submitted and processed in our system
Think about it you build a widget in your garage and start selling it via internet. NOt only do you adhere to local laws of sales tax (as you should), but lets add a sales tax rate for each state that you are selling to. So now the love of widget making has become, tax collector for california and other socialist states. Why stop there if you sold it to someone in that state, well you are benifiting from this state, county, town, where you make the widgets and since it was sold here to someone there, maybe the state, and county and town should get a little too because of all the services that we provide you here. Simon dont make things more difficult, your lots are still packed.
If you push this issue I'm going to stop shopping at your malls. You can't honestly compare Amazon to the local shopping mall; they barely compete at all. You still have the upper hand anyway.
Buy at the mall:
- Get it today
- Extra 7.5% in tax
Buy it online:
- Wait 5 days
- Pay shipping costs
Simon still has the advantage.
Our government needs to quit draining our pocketbooks, and learn how to get along with less. Good Lord! We're taxed when we make it, taxed when we spend it, taxed when we use the things we bought, and taxed when we give it away.
How about we do away with the IRS, and limit the government to one flat income tax (with no exemptions for corporations or individuals) and make the federal government share that tax with the each state based upon population distribution? NO MORE STATE TAXES! Forget 999, the problem is solved! You now have an efficient and transparent tax system.
As for how the government spend it, well that's another topic.
Those who argue for Herman Cain's "federalization" of state taxes best think carefully about their argument. The last thing in the world I want is more federal government involvement in my life. Sales taxes are levied by the state and local governments, not the feds. It is a state issue, and Simon is way off base here.
Answer: Never
I'm sure that Simon will, as a company devoted to fairness and the principles of fair play and competition, henceforth renounce all subsidies offered by, or received from, various governments, and get to work refunding those they have enjoyed.
Right.
Just have someone outside of the state put a proxy on their line. You can do the ordering without a lot of driving.
Netflix had an obvious competitive advantage over Blockbuster, but I don't remember hearing BB whine about it.
Yes, they took one in the 'nads, but no one has a right to stay in business. Isn't that part of free enterprise?
The second issue is the fact that Indiana does not force the merchant to collect taxes for online sales when the company is out of state. This is consistent with a Supreme Court decision that held that a state CANNOT tax an out-of-state merchant for in-state purchases unless that merchant has some kind of agent selling for them in that state. Simon wants to argue that because we have people in Indiana who own internet sites that post advertisements for those merchants that those sites become agents, establishing a "nexus" so that the state can tax those purchases. However, a few other states have tried it and it is failing miserably. The end result is always that those merchants just cut their ties with the internet advertisers. What does that mean? There is no longer a nexus and they don't have to collect the taxes. Then add to that the fact that all of the internet companies have lost their contracts and you now have a lot more unemployed Hoosiers--something we definitely do not need. We actually saw other companies move from Illinois to Indiana (bringing more jobs here) in the last few months because Illinois passed an internet tax. Do we want to now lose those jobs, too?
Simon claims to want to help mom and pop shops just like Walmart made the same claims in Illinois and California. Do you really think that Walmart and Simon are looking out for SMALL BUSINESSES? No way. It's just a way to create a good sound bite for the news.
As suggestions, Simon should lobby (instead of sue) the State for lower, more competitive sales taxes. Maybe Simon (and Co.) should conduct online activities of their own. Or maybe Simon should provide distinct advantages to consumers that the internet cannot.
In any event, imposing internet taxes for mom and pop internet start-ups are no way for Indiana to stimulate economic growth! ...and neither is complaining.
If that's the case, I don't want to pay it anymore either.
The city "gave them" Circle Center and then they still threatened to abandon downtown if they couldn't put their new office buidling in a park. THere were plenty of place they could have located their office building downtown but they had to exercise the clout and show they could ruin a park. They make me sick.
If they want to force the Amazon issue and make residents pay taxes when they make purchases from within Indiana, well then, I will just cross state lines, make my online purchase, and then come back. Now, if we really want to teach the Simons a lesson, everyone should stop shopping at a Simon mall for just one day. Go to Target of other independent retailers and watch how quickly Simon backtracks. Time to take back this country from the greedy like Simon and Company.
All Simon is doing is trying to force the public to try to enter their malls. Ever try to exit one? Darn near impossible and that is how it is designed easy in -impossible out.
Look Hoosiers love your malls - we shop there every day all day. Ever see an empty mall parking lot - not even on a rainy tuesday morning - the lot is always full.
There are just some things that i can not find at the mall - leave the net alone. Stop encouraging taxes.