Indiana merchants still pushing for Amazon to collect sales taxes now

By Samm Quinn
The Statehouse File

INDIANAPOLIS – A group representing Indiana merchants on Tuesday continued its fight to force Amazon.com and other online retailers to start collecting Indiana sales taxes immediately.

The Indiana Merchants for Tax Fairness released a poll that found a majority of Hoosiers want to see Amazon, the online retail giant, collect sale taxes this year.

Under a deal the company struck with Gov. Mitch Daniels and state lawmakers, the company is to begin collecting the 7 percent tax in 2014.

But that deal has been somewhat controversial. While Daniels celebrated a rare agreement with the company, some critics say it waits too long to eliminate an advantage the online retailer has over local firms.

“Small businesses are the lifeblood of communities across Indiana,” said Grant Monahan, President of the Indiana Retail Council and spokesman for Indiana Merchants for Tax Fairness. “That’s why it’s not surprising that a strong majority of Hoosiers believe that the state should stop shortchanging small businesses by giving online-only retailers like Amazon a pass on collecting sales taxes for two more years.”

Neither Amazon nor the governor’s office returned a call seeking comment.

Currently, Hoosiers who purchase from online retailers, including Amazon, are supposed to detail the purchases and any taxes owed when they file their income taxes. But that seldom happens because Hoosiers are either unaware of the law or ignore it.

A recent by Ball State University and the Indiana Fiscal Policy Institute found that Indiana loses about $77 million a year to online sales.

Republican Rep. Jeff Espich, R-Uniondale, has estimated that sales by Amazon make up about 15 percent of those lost taxes.

Espich introduced legislation that would have put the state’s deal with Amazon into law, but the proposal never moved out of committee.

Monahan said his group’s research shows that Hoosiers understand that the local businesses face an unfair playing field when trying to compete with online stores. He said the government is giving Amazon an advantage and it’s “not fair.”

“Indiana shouldn’t pick winners and losers,” he said.

The Indiana Merchants for Tax Fairness poll was conducted by Virginia-based Target Point Consulting at the end of January and surveyed a random sample of 600 registered voters in Indiana by telephone.

It found 69 percent of Hoosiers felt it is unfair to local retailers that no sales tax is collected by online retailers. It also showed that a majority of Hoosiers polled wants Amazon to start collecting sales tax immediately.

Monahan said his group testified in support of the legislation earlier this year but wanted one small change: Moving the effective date to July 1, 2012. Because the legislation died, Monahan said he hopes legislators will tack language the language onto another bill.

Samm Quinn is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.