A new report shows that Indiana could be losing more than $100 million in uncollected Internet sales tax, but collecting it will not prevent companies from locating in the state.
A report done by the Indiana Fiscal Policy Institute and Ball State University shows Indiana is losing anywhere between $40 million to $114 million by not collecting online sales tax. Fiscal Policy Institute president John Ketzenberger says the policy of collecting online sales tax should not involve defending a tax hike.
“This is not a question of raising taxes. It’s a question of whether you apply the taxes to all levels of the business,” he says.
Ketzenberger says the report shows collecting the tax will not hurt Indiana’s economic development climate either.
“It will not affect the decisions of retailers who do Internet commerce to locate warehouses or distribution centers or other opportunities, facilities in Indiana,” he says.
Though retailers like Amazon.com have threatened to move all their physical locations out of states that have collected online sales tax, they have not entirely done so.