Indiana News

Committee May Vote to End Amazon Sales Tax Grace Period

Bill would order collection of tax July 1, six months earlier than negotiated

1/16/2013

Amazon's tax-free status for Indiana purchasers could come to an end six months early.

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The House Ways and Means Committee will vote as early as next week on a bill to move up the effective date of a deal Amazon struck with former Governor Mitch Daniels to start charging sales tax next year.

Indiana Chamber vice president Bill Waltz says Amazon's pleas for more time to convert its systems ring hollow now that four other states have cut deals with Amazon that take effect sooner. Retailers contend they're losing customers to the online giant because shoppers figure they can save 7% of their bill.

The Indiana Fiscal Policy Institute estimates $100 million dollars a year in Indiana sales taxes go uncollected on Amazon purchases.

It would take a federal law to force tax collection on all Internet purchases -- the state has jurisdiction over Amazon because the company has several Indiana distribution centers. LaPorte Representative Tom Dermody (R) emphasizes Amazon "isn't the bad guy" -- he notes the company came to the Daniels administration to work out the deal to collect sales tax in 2014.

But Dermody says there's no reason not to accelerate the deal, especially with back-to-school and holiday shopping looming in the second half of the year.

Amazon didn't send a representative to testify at a committee hearing on the bill.

Co-sponsoring the bill are Representatives Eric Turner (R-Cicero), Ed DeLaney (D-Indianapolis) and Steve Stemler (D-Jeffersonville).

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