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Amazon to collect sales taxes sooner than planned

INDIANAPOLIS - The House Ways and Means Committee voted 20-1 Thursday to require Amazon to begin collecting sales taxes on in-state purchases starting July 1 – six months ahead of when expected.

House Bill 1007 now moves to the full chamber.

The legislation says if a company has a physical nexus in the state – such as stores or distribution facilities – it has to collect the tax on the purchases.

Amazon has four warehouses, and former Gov. Mitch Daniels initially promised not to collect sales tax from them.

Then he cut an agreement to start doing so in 2014.

In the meantime, Amazon has begun collecting in other states.

Indiana's brick-and-mortar retailers have long complained that it builds in a 7 percent disadvantage on cost because people can buy online and not pay the sales tax.

The bill would affect only online retailers with a physical presence in Indiana. An overall solution still has to be handled on the federal level.

Sen. Brandt Hershman, R-Buck Creek, – chairman of the Senate Tax and Fiscal Policy Committee, – said he is unsure about the legislation.

"There was a deal made regarding that collection," he said. "We need to evaluate how making a change to that deal is perceived in the business community."

Hershman said he understands the argument on fairness and that the need for revenue is real. But he said online retailers are significant job creators as well.

The Daniels' administration had estimated Amazon would likely owe the state an additional $25 million annually in state sales taxes.

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