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Deal Reached With Amazon.com On Online Sales Tax

Online retailer Amazon.com will begin collecting Indiana sales tax on internet purchases. The state and the retail giant announced the agreement Monday.

Indiana becomes the fourth state in which Amazon will collect the tax. Under current law, only retailers with physical locations in the state are required to collect sales tax. And while Amazon has warehouses in Indiana, they had not collected because of an agreement with the governor in return for Amazon locating in the state. Daniels says he appreciates the online retailer working with Indiana to help address the issue,

“They agree with us that all those who sell remotely – Internet, catalog or otherwise – ought, as soon as possible, to be collecting what is duly owed: the taxes owed Indiana and most other states," Daniels says.

Estimates place the amount of lost state sales tax revenue at around $75 million. The state Department of Revenue and Budget Agency say transactions with Amazon account to 20 to 25 million of that total.

Daniels says federal legislation compelling the collection of online sales tax is the only way to truly correct the problem. Amazon will begin collecting Indiana sales tax in 2014 or 90 days after federal legislation is passed, whichever comes first.

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