From the Lafayette Journal and Courier:
A recent Indiana Department of Revenue ruling has made the Hoosier State a tax nexus safe haven for a local catalog distributor.
On Tuesday, The M.A.I.L. Group officials announced that, according to the revenue department, their catalog clients without a store or warehouse “lack the physical presence required to find that they have substantial nexus in Indiana.”
Simply having catalogs stored and shipped by M.A.I.L. does not constitute having a physical presence in the state, according to the ruling.
As a result, the state ruled that the cataloger is not required to collect and remit sales tax on transactions handled for those companies “absent more of a physical presence in the state.”
Ron Welton, M.A.I.L. Group chief operating officer, called the decision a “sweet victory” for the company and the catalog industry as a whole.
“This industry has been under financial strain due to ever increasing postal rates and threats from various governmental taxing authorities,” he said.
Catalog fulfillment services were started by The M.A.I.L. Group in September 2003. The service, run by about 55 employees, now makes up about 60 percent of the company’s business, according to Ron Robbins, founder and chief executive officer.
On a daily basis, more than 200 clients send the Lafayette firm electronic files that contain the names and addresses of people who have asked to receive catalogs. The catalogs are stored at the M.A.I.L. headquarters and are shipped the same day the data is received.
Robbins said the firm sends out between 50,000 and 60,000 per day. Companies that use M.A.I.L. to distribute their catalogs include Musician’s Friend, Cabela’s and J.C. Whitney.
RobbIns said M.A.I.L. reached out to state Sen. Brandt Hershman, R-Buck Creek, amid pressure from clients who were concerned that just having their catalogs stored in Indiana would trigger potential tax liabilities.
He added that before the ruling, the interpretation of tax regulations in Indiana made it difficult to give clients a clear-cut answer. That made it difficult to bring in new clients and keep current clients.
“We’ve actually lost two or three clients because of the threat, which prompted us to find out what the real ruling is,” Robbins said. “One client told us that their attorneys told them that they must pull out of Indiana because of it. This ruling was critical.”
http://www.jconline.com/apps/pbcs.dll/article?AID=2013312240020
