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Amazon Begins Charging Sales Tax In Indiana

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

Hoosiers shopping on 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.

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