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Indiana merchants, lawmakers use Cyber Monday to push for online sales tax

Tuesday, November 27, 2012 - 12:01 am

A coalition of Indiana merchants and lawmakers took advantage of Cyber Monday to push for online retailers such as Amazon.com to start collecting sales taxes.

A pair of area lawmakers joined retail industry lobbyists in Fort Wayne to promote a bill that would require online retailers with a physical presence in Indiana to start collecting the state’s 7 percent sales tax – as brick-and-mortar stores already do – in July.

To lure Amazon’s first warehouse to Indiana in 2007, the state exempted online retailers from collecting the tax. But some politicians and business leaders say the exemption puts traditional stores at a disadvantage.

“You shouldn’t be giving an advantage to some retailers and not to other retailers,” said Grant Monahan, president of the Indiana Retail Council.

Gov. Mitch Daniels and Amazon reached a deal earlier this year that would require the online giant to start collecting the state sales tax in January 2014. Efforts to put the agreement in state law failed during the 2012 legislative session.

The new bill would move the date up to July, a change that would help level the playing field for brick-and-mortar merchants, supporters said.

“It’s an important date because it helps retailers with two major shopping seasons: Back to school and the holiday shopping season,” Monahan said.

Cyber Monday – the first Monday after Thanksgiving – is considered the unofficial start of the online Christmas shopping season, with most online retailers offering big discounts similar to Black Friday bargains.

Matt Norris, a lobbyist with the Corydon Group, said the state’s nonpartisan Legislative Services Agency is working on a draft of the bill, which will be ready for introduction in the 2013 session. State Rep. Tom Dermody, R-LaPorte, is authoring the bill.

State Reps. Kathy Heuer, R-Columbia City, and Matt Lehman, R-Berne, appeared in support of the bill Monday at the Fort Wayne Chamber’s offices, 826 Ewing St.

Lehman said he has heard from at least one small business in his district that had an order cancelled by a customer because the customer learned that Amazon does not charge sales tax in Indiana. Heuer gave Amazon credit for agreeing to start collecting the tax in 2014, but she said the date must be moved up.

“Amazon has already agreed to do their part,” Heuer said. “Now is the time to accelerate the agreement we have made with them.”

Norris, who is lobbying for Wal-Mart on the issue, said the online sales tax could generate between $75 million and $125 million in additional revenue for the state each year.