The State of Indiana has reached an agreement with Amazon.com to begin collecting Indiana sales tax on Internet purchases.
According to the agreement between Amazon and the Indiana Department of Revenue, the company will voluntarily begin to collect and remit Indiana sales tax beginning Jan. 1, 2014 or 90 days from the enactment of federal legislation, whichever is earlier. The state will not assess the company for sales tax for other periods.
The Indiana State Budget Agency and DOR estimate that revenue from sales tax remittal by Amazon would be approxi- mately $20 million to $25 million per year.
Indiana will become the fourth state to reach such an agreement with Amazon, but Indiana Gov. Mitch Daniels said he would continue to push for federal action to address the issue. According to a report by the Indianapolis Business Journal, the agreement follows a lawsuit by Simon
Property Group, an Indianapolis-based mall owner, and lobbying by traditional retailers who claimed that online retailers have an unfair price advantage.
“The only complete answer to this problem is a federal solution that treats all retailers and all states the same,” said Daniels. “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.”