ELKHART — If you live out-of-state and want to buy a recreational vehicle in Indiana, sales tax questions will pop up during the financing process.
Currently, 41 states have reciprocal agreements with Indiana that exempt out-of-state RV buyers from having to pay the 7 percent Indiana sales tax, with Indiana residents receiving a similar exemption for purchases in those states.
If you live in the other nine states — Michigan, Florida, California, Arizona, Hawaii, Massachusetts, Mississippi, North Carolina and South Carolina — there is the potential you could be double taxed. That means customers from one of those states could pay Indiana’s 7 percent sales tax at the time of purchase only to turn around and have to pay sales tax in their home state as well.
Two proposed bills at the Indiana Statehouse — Senate Bill 172 and House Bill 1045 — hope to eliminate that extra tax burden by exempting out-of-state RV purchasers from having to pay Indiana sales tax, regardless of whether their states have a reciprocal agreement in place.
Sen. Blake Doriot, a Republican from New Paris, introduced SB 172 because he has heard from numerous dealers who say they have lost significant business due to out-of-state buyers going elsewhere to avoid double taxation. He says the loss of out-of-state buyers not only impacts RV dealers, but also other industries in Elkhart County.
"People will come from other states, sometimes on vacations, to look for RVs," Doriot said. "They shop around to multiple dealers, take factory tours, stay at our hotels and eat at our restruants. Without that, the whole community is losing revenue."