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Ind. House panel backs online sales tax collection

Published on NewsOK Modified: January 24, 2013 at 4:48 pm •  Published: January 24, 2013
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Sen. Brandt Hershman, chairman of the Senate Tax and Fiscal Policy Committee, said the argument over business fairness must be weighed against the potential consequences of breaking the deal with Amazon.

"We need to evaluate how making that deal would be perceived in the business community in general with respect to Indiana honoring its commitments," said Hershman, R-Lafayette.

The Associated Press left a telephone message seeking comment from Amazon officials.

It isn't clear how much money the state might receive from additional sales tax collections.

A study completed last year by the Indiana Fiscal Policy Institute and Ball State University researchers estimates the state loses up to $114 million a year in uncollected sales taxes on internet purchases, while a state Senate budget leader has said it could be as much as $250 million.

Monahan said the retailers group was still studying how many online businesses would be covered by the bill but believed it would include most with large Internet sales. Current state law already requires sales tax collection for online sales by retailers, such as Wal-Mart and others, that have stores in Indiana.

Dermody said Daniels reached a good deal to attract Amazon to Indiana but that it was no longer necessary.

"I think part of the agreement was that Amazon needed this time to prepare for collecting sales tax in our state, and now we've seen where there are four other states that have sooner deals than we do," he said.

Rep. Ed DeLaney, D-Indianapolis, a co-sponsor of Dermody's bill, said Amazon and other online retailers should never have been allowed not to collect the sales tax.

"We should collect taxes based upon rules, not on handshakes," DeLaney said.