A coalition of Indiana retailers says it has some gripes with the state of Indiana's recent agreement with online retailer Amazon.
On Monday, Gov. Mitch Daniels announced that the state had reached an agreement with Amazon to begin collecting Indiana sales tax on amazon.com purchases. According to the agreement, Amazon will begin voluntarily collecting and remitting Indiana sales tax starting Jan. 1, 2014 — or 90 days from the enactment of federal online sales tax legislation, whichever is earlier.
On Wednesday, a group called Indiana Merchants for Tax Fairness hosted a conference call to express concerns with the agreement. Many of the organization's members are small, independent retail shops, and the group's goal as stated on its website is "to level the playing field between online retailers and brick-and-mortar businesses."
Group spokesman Grant Monahan, who also is the president of the Indiana Retail Council, said he supports online sales tax collections, but strongly opposes the January 2014 date specified in the Amazon agreement.
"Why does Amazon need two years? That's our concern," Monahan said.
Hoosiers are supposed to pay sales tax on their online purchases when they file their income tax returns — but many taxpayers fail to do this.
According to the Governor's Office, Indiana currently misses out on about $75 million in uncollected online sales tax each year. The amount of sales tax remittal from Amazon alone would be about $20 million to $25 million annually, the state estimates.
If online retailers don't collect sales tax at the time of purchase, Monahan's group argues, it gives those retailers an unfair advantage over brick-and-mortar retailers, who are required to collect sales tax.
Jim Moers, owner of East Side Evansville retailer Gear Up, said he encounters that phenomenon at his shop.
Some customers, Moers said, tell him they're visiting his shop to browse but that they intend to make their purchases online.
"One of the reasons they do it is to skip out on sales tax," Moers said.
He said the long time line in the state's agreement with Amazon is "silly."
"2014? That's not even on the calendar yet," Moers said.
But representatives of both the Governor's office and Amazon say changes could come sooner than 2014.
Jane Jankowski, a spokeswoman for Gov. Mitch Daniels, said the governor supports federal legislation on this issue, and passage of such legislation "may very well be before January 2014."
"The focus really needs to be on federal legislation that treats all states, all remitters, the same," Jankowski said.
Amazon spokesman Scott Stanzel said the retailer, too, favors a nationwide approach to the issue.
"We believe that the state-by-state approach is not one that is in the best interest of all retailers," Stanzel said. "Our focus is on supporting federal legislation. We believe there's an opportunity to get that passed this year."
Amazon operates three facilities in Central Indiana: One in Whitestown and two in Plainfield. All three facilities are what Amazon calls fulfillment centers — they are warehouses where workers fill and ship customer orders.
Both Jankowski and Stanzel said Amazon's physical presence in Indiana is not a factor in the retailer's recent tax agreement with the state.