By Maureen Hayden in the Jeffersonville News and Tribune (and others)
Federal legislation that would allow Indiana and other states to collect millions of dollars in unpaid sales taxes on online purchases may be getting closer to reality.
Indiana state Sen. Luke Kenley — the Republican chairman of the state Senate appropriations committee and a key player in the online sales tax issue — said pressure is ramping up on Congress to act. Earlier this week, the U.S. House and Senate held committee hearings on online sales tax legislation. They heard bipartisan testimony from leaders of cash-strapped states who said they need a federal law to recoup an estimated $18 billion in revenues lost to online sales that go untaxed.
“The pressure is really beginning to build,” Kenley said. “I think it could happen this year.
Kenley has spent a decade on the issue, working on a multistate agreement to streamline the much-varied sales taxes that exist among the states. Two bills, one in the House and one in the Senate, would clear the way for states to collect an online sales tax if they sign onto the streamlined sales tax agreement.
Indiana stands to gain millions in tax revenues — estimates range from $77 million to $200 million-plus a year — at a time when it’s phasing out the state’s inheritance tax. State fiscal experts say the inheritance tax phase-out will cost Indiana about $165 million a year in revenue, starting in 2020.
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The online sales tax issue has lingered for years, following a 1992 Supreme Court decision that let most online-only retailers off the hook for collecting state and local sales taxes on purchases made by their customers. The court said it was up to Congress to come up with a fix.
A combination of factors — including heat generated by states hard hit by the recession and by bricks-and-mortar retailers who say online competitors have an unfair pricing advantage — have elevated the issue, Kenley said. Backers of federal legislation that would allow states to collect the online sales tax include the National Governors Association, and the giant online retailer, Amazon.com, which had been fighting individual states’ attempts to force it to collect the tax.
Earlier this year, Amazon.com, struck a bargain with Indiana Gov. Mitch Daniels. Amazon agreed to voluntarily begin collecting Indiana’s 7 percent sales tax on Internet purchases, beginning in 2014 if a federal law doesn’t pass before then. At the time, state fiscal experts said untaxed purchases made online by Amazon customers in Indiana accounted for about $25 million a year in lost tax revenues.
http://newsandtribune.com/business/x453799517/Congress-debates-online-sales-tax-that-could-net-Indiana-millions
