Simon says: Tax Amazon sales in Indiana

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November 4, 2011

By: Greg Janetka

Indiana

INDIANAPOLIS, Indiana: Yesterday, Simon Property Group, the largest real estate company in the United States,[1] sued the Indiana Department of Revenue in an attempt to force the state to collect sales taxes from Amazon.com. The lawsuit is the latest move designed to tax online sales made in the state, something proponents of the tax say would put online retailers on the same level as traditional retail stores.

In filing the suit, Simon states it is not seeking any monetary damages, but rather "This action is being filed to benefit all of Indiana's taxpayers and the state's bricks-and-mortar retailers."[2] In a statement Simon goes on to say Amazon is required by law to collect sales and use taxes for sales in the state, but has refused to do so. Amazon, who has three distribution centers in Indiana, with a fourth planned, say they believe the issue should be dealt with at the federal level, something echoed by the administration of Indiana Governor Mitch Daniels (R).[3]

The Indiana Retail Council is backing legislation such as the bill state Sen. John Broden (D) is planning to file in the next session. His bill would force the state to collect sales taxes from online retailers who have a physical presence or affiliated distributors in the state. Interestingly, Indiana, in an initial effort to bring Amazon into the state, repealed a 2007 law which would have subjected them to the same tax-collection duties as traditional retail stores.[3]

Fellow Senator Luke Kenley (R) said he would not support a state solution such as Broden has proposed. Kenley serves as president of a national group lobbying Congress to change the law that forbids states from collecting online taxes. He estimated Indiana could bring in some $400 million annually through taxing online sales.[2]

The Department of Revenue has not yet commented on the suit.

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