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Opinion

November 29, 2012

OUR VIEW: Online sales tax makes sense

— A coalition of businesses called a news conference on Cyber Monday to ask Indiana lawmakers to stop giving an advantage to online retailers.

Legislators ought to respond favorably.

Representatives from Indiana Merchants for Tax Fairness Collection called for a quicker end to what they consider to be an unfair advantage enjoyed by online-only retailers that escape the state’s 7 percent sales tax.

On what turned out to be the biggest online shopping day ever, the coalition announced plans to push for legislation that would make Amazon and other online retailers start paying Indiana sales tax by July 1, 2013. If passed, the bill would speed up a deal Amazon had already cut with Gov. Mitch Daniels to begin collecting sales tax on Jan. 1, 2014.

Amazon, which had long fought the online sales tax nationwide, is already charging state sales tax on purchases made by residents in California, Pennsylvania, and Texas, and it’ll start collecting sales taxes in Virginia and New Jersey next year.

Why not Indiana?

A report this year from the Indiana Fiscal Policy Institute estimated the state was losing as much as $125 million in annual sales tax revenue — money that would be going to schools and public safety. Some legislators think the number could be higher since online sales are growing. National retail experts estimate this year’s Cyber Monday sales at $1.5 billion — the highest ever.

The proposed legislation would affect all online-only retailers with a physical presence in Indiana, including Amazon, which has several warehouses around the state.

Merchants argue that if they have to charge sales tax, companies such as Amazon should be required to charge it, too.

Allowing online retailers to avoid doing that, they say, does nothing but discourage people from shopping in brick-and-mortar stores.

Amazon officials claim the lack of sales tax has little impact on online sales. They say sales are just as strong in states where Amazon does collect sales tax as they are in the states where it doesn’t.

Critics say that’s all the more reason to start collecting the tax sooner rather than later. If it’s not a disadvantage for Amazon to level the playing field, they ask, why wait?

Why indeed.

It’s time for Indiana to level the playing field for the mom-and-pop stores that are the heart and soul of communities across the state. Lawmakers should approve this bill.

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