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Indiana: Internet Sales Tax Won't Fix Budget



A new study sponsored by the Indiana Fiscal Institute estimates that Indiana loses approximately $77 million in sales tax revenue related to online purchases.

As the Evansville Courier & Press points out, the study indicates that this revenue would not be enough to "solve any big budget problems." The study, conducted by Ball State University's Center for Business and Research, states: "Placed in context to the overall state budget, this [lost revenue] is a small share of collections."

However, revenue is not the only concern for Indiana lawmakers who currently grapple with whether or not to require online companies to collect sales tax in the same way brick-and-mortar companies do. In fact, the study concludes that "The current system lacks equity and neutrality, treating very similar retailers differently, and potentially altering the behavior of consumers and businesses with respect to fundamental decisions on consumption and production."

Presently Indiana requires companies with a physical nexus in the sate to collect sales tax, but makes an exception for Amazon, which has four Indiana warehouses.

 

 


Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.