Correcting the gross imbalance in ’Net sales
Indiana retailers reminded Hoosiers on Cyber Monday of a gross unfairness that hurts their businesses and deprives the state treasury of much-needed income: Too many Internet retailers do not collect and pay sales taxes on goods sold and sent to Indiana.
Hoosiers who buy goods and fail to pay the 7 percent sales tax are supposed to fess up when they file their annual state tax returns, report the purchase and pay the tax. Many dont.
The U.S. Supreme Court has ruled Internet merchants must collect and forward the sales tax only to states where they maintain a physical presence. But Gov. Mitch Daniels cut a deal with Internet giant Amazon to delay collecting the taxes until 2014 despite the companys Indiana warehouses. Indiana Merchants for Tax Fairness wants the legislature to move up that deadline for Amazon and any other Internet business that has a brick-and-mortar presence in the state.
Whether lawmakers will – or should – undo an agreement Daniels made is debatable. But its clear that Internet retailers – with or without buildings in Indiana – should do what offline retailers do: Collect and pay the sales tax.
Unfortunately, that may well require an act of Congress.