Online Sales Tax

Indiana’s battle to collect online sales tax from businesses that don’t have a physical presence in the state will more likely play out in Congress than in the courts, says one economist.

Indiana does collect sales tax from companies such as Amazon, which has seven distribution centers across five counties.

But the state also wants to tax online retailers including Wayfair and Overstock, which don’t – but still earn more than $100,000 a year from Hoosiers.

The state of Indiana filed a lawsuit Monday to allow it to collect sales tax from online sellers who don’t have a presence in Indiana.

New state legislation that prompted the lawsuit means the state could collect those taxes if the courts rule in its favor.

The U.S. Supreme Court ruled in 1992 that online retailers don’t have to collect and remit sales tax if they have no physical connection to the state.

Amazon begins collecting IN sales tax

Jan 3, 2014

Hoosiers shopping on Amazon.com are now being charged sales taxes on their purchases. The online retailer’s new policy is part of a settlement it made with Indiana back in 2012.

The Indiana-based mall operator Simon Property Group sued Indiana in 2011, saying it was giving Amazon an unequal business advantage by not requiring it to charge sales tax.

Amazon doesn’t collect sales tax in most states. State Budget Director Brian Bailey says the difference between those states and Indiana is that Amazon has four distribution centers here.

Democratic gubernatorial hopeful John Gregg wants to eliminate the corporate income tax for Indiana businesses. He plans to make up the lost revenue by collecting taxes from online retailers.   

Indiana and Amazon.com Agree to Sales Tax Deal

Jan 9, 2012

Indiana’s Department of Revenue estimates the state will generate an additional $20-to-$25-million because of a new deal.

Amazon.com agreed to collect Indiana sales taxes for purchases made through the online retailer.

Paul Meisner is the company’s Vice President of Global Public Policy.

He says the next step is the Federal Government taking similar action.

The state DOR reports Indiana loses about $75-million annually by not collecting online sales taxes.

The deal with Amazon begins in two-years, unless a federal law takes effect sooner.