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Sales Tax Revenues Could Be $300 Million Below Projections

Indiana’s sales tax revenues have underperformed this fiscal year and a new revenue forecast predicts the state won’t collect as much as previously predicted.

Sales tax collections are down more than three percent from expected levels through nearly half of the fiscal year. And a new revenue forecast predicts the state will collect more than $300 million less in sales tax over the next two years than previously expected.

Rep. Tim Brown, (R-Crawfordsville) says what concerns him about that depressed outlook is Indiana’s aging population. “You spend more on services, you travel – you don’t buy dishwashers; you may not remodel your house as often as you get older," says Brown.

State Sen. Luke Kenley (R-Noblesville) who chairs the Appropriations Committee, says he’s worried about the amount of internet sales tax Indiana loses out on – a figure he estimates could be in the hundreds of millions of dollars. “It’s clearly putting our bricks-and-mortar retailers at a bigger and bigger disadvantage, which is a very unfortunate situation” says Kenley.

Kenley says a solution must largely come from the federal government – and he says that’s likely at least two years away.

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