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Sunday, November 06, 2011

Ind. Law - Sen. Luke Kenley continues push for federal sales tax collection fix

Following on a long list of earlier ILB entries on Amazon and sales tax collections, Maureen Hayden, CNHI, who has been following this issue in a number of stories, reported Nov. 5th in a story that begins:

While thousands of Hoosiers may spend “Cyber Monday” shopping online for holiday gifts, state Sen. Luke Kenley may be on Capitol Hill asking Congress to close a multi-billon tax loophole long enjoyed by Internet retailers.

The influential Republican state lawmaker has asked to testify at a congressional hearing in support of federal legislation that would compel online-only retailers to start collecting and remitting sales taxes like their bricks-and-mortar competitors do.

The hearing in front of the House Judiciary Committee is scheduled for the Monday after Thanksgiving — the biggest online shopping day of the year.

The timing is intentional: Cyber Monday sales hit a record-breaking $1 billon last year, and a big chunk of those sales were made by online-only retailers like Amazon.com, which doesn’t collect sales tax on purchases.

Kenley says his testimony, if he were allowed to give it, would boil down to a mantra he’s been repeating for more than a decade to get Congress to act on the issue: “This isn’t about imposing a new tax. This is about collecting a tax that’s already owed.” * * *

He’s pushing for a federal fix to the current law says a state can’t force an out-of-state Internet entity to collect and pay the sales tax the state’s residents are required to pay on purchases made in brick-and-mortar stores.

On his way back to Indiana, Kenley heard about the lawsuit slapped against the state of Indiana by the Indianapolis-based Simon Property Group, the nation’s largest mall owner. In the lawsuit filed Thursday, Simon contends the state’s refusal to make Amazon collect and remit the state’s 7 percent sales tax amounts to an “illegal and unconstitional” taxpayer-funded subsidy to the Seattle-based online retail giant.

Simon’s argument is based on the fact that Amazon does have a presence in Indiana: three large distributions centers that the online retailer agreed to build in Indiana after the state gave the company a pass from having to collect the state’s 7 percent sales tax.

Kenley said the lawsuit, if successful, won’t solve what he sees as a bigger problem that needs a national solution.

“But it does focus more attention on the issue,” said Kenley, who heads a multi-state coalition pushing for a federal online sales tax bill. Betsy Laird, senior vice president of public policy at the International Council of Shopping Centers, said attention to the issue is mounting because state lawmakers like Kenley know the impact of losing tax revenues at a time when states are strapped for cash.

Here is a Nov. 4th story by Hayden on the Simon suit, as published in the Times of Pryor Creek, Oklahoma.

Posted by Marcia Oddi on November 6, 2011 12:31 PM
Posted to Indiana Law