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Indiana: Lawmakers Want Amazon Tax Collected in July 2013

  • Jan 25, 2013 | Gail Cole

 Indiana Lawmakers Pushing for Amazon Tax Collection in 2013.

Amazon is currently scheduled to start collecting and remitting sales tax in Indiana in January, 2014. The online retailer has five fulfillment centers in the Hoosier state; that's unquestionably a physical presence, or nexus. Amazon has also brought thousands of jobs to the state. Recognizing the company's contribution to the state economy, in January 2012, former Governor Mitch Daniels (R) made a deal that gave Amazon until 2014 before it has to start collecting sales tax. 

Last fall, lawmakers in Indiana proposed pushing that date up a bit. This week in the Indiana House of Representatives, the House Ways and Means committee passed H.B. 1007 by a 20-to 1- vote. If it is approved by the full House and Senate and signed by Governor Mike Pence (R), Amazon will be asked to start tax collections on July 1, 2013.

H.B. 1007 reads:

"Use tax nexus and collection. … Specifies that the use tax nexus provisions apply to transactions that occur after June 30, 2013."

Representative Ed DeLaney (D-Indianapolis) points out that "[t]he governor really didn't have the authority" to make the deal with Amazon. "The matter of tax collections should not be a matter of quiet agreements between any one governor and any business." Indiana lawmakers struck a deal with Amazon back in 2007, promising that they "wouldn't immediately push for sales tax collection" if the online retail giant opened a warehouse in the state.

Lawmakers' motivation for acting now? A combination of fairness and a desire to increase revenue. Indiana brick-and-mortar retailers note that "Internet retailers have a 7 percent advantage over stores that pay taxes and employ Hoosiers." They're not happy about that. As for increasing sales tax revenue? "There's no reason to wait," says Rep. Tom Dermody (R-LaPorte).

How does Amazon feel about Indiana reneging on its deal? To date, the company has not issued a comment. At least one lawmaker is considering the implications of going back on the former governor's deal. Said Senator Brandt Hershman (R-Buck Creek), "We need to evaluate how making a change to that deal is perceived in the business community."

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.