Amazon Begins Charging Sales Tax In Indiana

In a 2012 settlement, Amazon agreed to start collecting sales taxes on items shipped to Indiana beginning this year.

amazon

Photo: Amazon.com Screenshot

The taxes from Amazon are expected to bring in $22.5 million to the state this year.

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.

“Because of those distribution centers, there’s an argument that Amazon has a physical presence in the state, which is what’s required constitutionally in order for a state to collect taxes,” he says.

In the settlement that resulted from that lawsuit, Amazon agreed to start charging the tax at the beginning of this year.

The tax is assessed on any items being shipped to Indiana and is expected to bring in $22.5 million this year and $57 million next year in state revenue.

A proposal in Congress called the Marketplace Fairness Act would require retailers with at least $1 million in annual sales outside of their home states to collect sales tax from their customers.

An Amazon spokesman said in an email that the company, quote “strongly supports federal legislation to resolve the sales tax issue and, as analysts have noted, Amazon offers the best prices with or without sales tax.”

Amazon is also starting to collect sales tax in Nevada and Tennessee this year. That brings the total number of states where it charges the tax to 19.

Gretchen Frazee

Gretchen Frazee is a reporter/producer for WFIU and WTIU news. Prior to her current role, Frazee worked as the associate online content coordinator for WFIU/WTIU. She graduated from the University of Missouri-Columbia where she studied multimedia journalism and anthropology. You can follow her on Twitter @gretchenfrazee.

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  • Tommy Knapp

    Simply having distribution centers in Indiana does not constitute a physical presence as per the Constitution. Those distribution sites would have to be open to the public for retail sales in order to meet the Constitutional definition of Amazon selling within the state. I understand Indiana wanting to get a cut of online sales, but what they are doing now is a clear violation of the “Interstate Commerce” clause of the Constitution.

  • Pingback: Amazon Sales Tax Now Reality For Over Half Of U.S. Population | Teqcell

  • Guest

    So far amazon isn’t charging it… I’ve still bought stuff in 2014 from them and they ddidnt charge it yet… Yay

  • http://ourhomeschoolstudio.com/ HillaryM

    I was just charged sales tax two days ago. My gripe is that it was on an e-book — so nothing was physically shipped. :/

  • Fernando L

    I tried to purchase an item today, there was a cheaper option but since I have the amazon card I get more points if I buy it from them. So when I go to place the order I see I am being charged tax… well Now I have no use for the amazon card OR buying from them not only have they raised the price of the minimum to get things shipped but also tax if I do buy from the website its not going to be from them but 3rd party which don’t charge tax. At least Ebay is still around they don’t charge tax but you need to be more careful who you buy it from.

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