Amazon.com will begin to collect Indiana’s 7 percent sales tax from customers in 2014, which could bring an estimated $20 million in revenue to the state’s economy.
The online retail behemoth announced an agreement Monday with the Hoosier State. It which requires Amazon to collect Indiana’s sales tax from customers in that state beginning in 2014. The agreement also states that if federal legislation regarding the collection of taxes for online sales is passed before 2012, Amazon must begin to collect the sales tax within 90 days of the legislation’s passage.
The agreement stemmed from a lawsuit filed by brick-and-mortar shopping mall owner Simon Property Group against the state in November. Simon said in a statement that it is “pleased with the agreement” and it will drop the lawsuit.
“The only complete answer to this problem is a federal [government] solution that treats all retailers and all states the same,” said Indiana Governor Mitch Daniels in a statement Monday.
“But for now, Amazon has helped us address the largest single piece of the shortfall, and we appreciate the company working with us to find a solution,” said Daniels.
“Amazon, Governor Daniels, and legislative leaders chose to work together on jobs and investment in Indiana and to focus on resolving the sales tax issue by strongly supporting federal legislation,” Amazon spokesman Ty Rogers told The Daily Caller in an email. “As analysts have noted, Amazon offers customers the best prices with or without sales tax.”
The House Judiciary Committee examined the issue of online taxation in November. Grievances aired by state governments and brick-and-mortar retailers over the online retailers’ tax-collection habits ranged from lost state revenues to unfair competition practices. Online retailers argued that states should be “bear the cost” of supplying the software needed to properly collect taxes across the U.S.
The Indianapolis Business Journal reported that estimates on “Indiana’s uncollected online sales taxes range from $75 million to $250 million per year.”
Amazon, a Seattle-based company, is Indiana’s largest online retailer.