Online shopping is hitting local businesses across Indiana hard. In the hopes of evening out retail competition, local businesses have collaborated with 250 companies statewide and the Indiana Retail Committee to promote the implementation of an online sales tax.
A move that would theoretically raise prices for consumers, the 7 percent sales tax would revert the 2007 policy that makes online retailers exempt from charging such a fee, an exemption businesses like Amazon.com are using to their advantage.
Competition with Amazon is leaving businesses in Bloomington feeling the disadvantages of an uneven playing field, a topic Local First Indiana President Una Winterman says the lawmakers are still addressing.
“Amazon gets a seven percent advantage over all other retail in Indiana because they don’t have to collect taxes so they can price their items lower if they want in order to draw customers away from brick and mortar businesses,” Winterman says. “The Indiana Retail council president Grant Monahan said that it results in more than $300 million in lost revenue for the state which is obviously not good for our local businesses either.
He says the deal with Amazon brought jobs into the state, but not having an online sales tax undermines jobs already in Indiana.
“The two Amazon warehouses that moved in four years ago provided 1,700 jobs. If you compare that with the 547,000 retail jobs that are at stake, it is just no question on who we should be supporting here.”
With the current state of the economy, the timing of this mandate has been divisive. However Amazon recently introduced an app for customers, offering a five dollar discount for people to take a photo of a barcode on their smart phone at a local business, and then to purchase the item instead online.
Michael Fisher, owner of downtown Bloomington tobacco and leather goods shop The Briar and the Burley, is having related issues.
“I’ve become a show room. They can come in here look at the actual merchandise in the flesh so to speak and then search around somewhere that might sell it cheaper,” he says. “If they forced the internet companies to collect the sales tax from the customer to the state that it was being shipped to that would certainly help.”
The future status of the online retail sales tax remains in the balance, as local businesses push for legislative reform.