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Unless they have a physical presence in Indiana, no sales tax is charged. That ruling was handed down by the U.S. Supreme Court.
Wait, Amazon has a physical presence in Indiana — five of them — with the newest warehouse located in southern Indiana.
So what gives? The state struck a deal with Amazon in 2007 whereby the online retailer would open its first warehouse in Indiana with the promise that state lawmakers wouldn’t immediately push for online sales tax collection.
Last January, Gov. Mitch Daniels worked out a deal with Amazon to begin collecting sales taxes in 2014. That’s not quick enough for some lawmakers.
Two Indiana lawmakers say they will file bills this January to move up the collection to July 1, six months earlier than scheduled.
“There’s no reason to give a tax preference to one part of the retail world and not to the rest. That’s what we’re doing right now,” said State Rep. Ed DeLaney, D-Indianapolis.
He’s right. But in this case, an agreement worked out with the state should stand.
To do otherwise would send the wrong message to other businesses thinking of locating to Indiana. It would set a bad precedent that agreements made with government leaders can and will be broken. Businesses considering an Indiana presence might rethink making that commitment, and that could cost Indiana citizens badly needed jobs, and state government badly needed revenue.
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Six months is not worth ruffling feathers in order to get a small bump in income revenue. The overriding principle is the state keeping its word. To do otherwise would create long-term harm for a short-term gain.
