Indiana Senator Calls For Internet Sales Tax

Photo: Doc Searls (Flickr)

Indiana currently does not tax online sales because of a deal it made with Amazon when the company moved its warehousing centers to the state.

A state senator is calling on a legislative committee to help lobby Congress for a new policy that would force retailers to collect sales tax for online purchases.

Currently, most retailers with physical locations in the state are the only ones charged sales tax on internet transactions under nexus laws. But while online retail giant Amazon.com has physical locations in Indiana, the state does not collect sales tax from them because of an agreement between the company and the governor reached when Amazon moved its warehousing centers to Indiana.

Noblesville Senator Luke Kenley says the law should not pick and choose among individual companies.

“I try to stay focused on the bigger problem which is that all retailers need to remit sales tax,” he says.

Estimates suggest collecting internet sales tax could bring in as much as $400 million in revenue to the state, but if all states do not charge e-sales taxes, some lawmakers worry Amazon could move its warehouses elsewhere.

Kenley says even though the online sales tax issue is being advanced in Congress, there is still a major hurdle.

“The biggest obstruction with that is a concern on some people’s part that this is a new tax,” he says. “It’s not a new tax. it’s a tax that’s already owed.”

There are two bills in Congress, one in the House, one in the Senate, under consideration.