INDIANAPOLIS | A Northwest Indiana lawmaker's plan to require all online retailers collect sales tax from Hoosier customers starting July 1 remains intact after an attempt to scuttle the legislation was soundly defeated Thursday.
House Bill 1007, sponsored by state Rep. Tom Dermody, R-LaPorte, revises a deal struck by former Gov. Mitch Daniels and Amazon.com. That earlier deal would compel the Internet retail giant to begin collecting sales tax on Indiana purchases beginning Jan. 1, 2014.
State Rep. David Wolkins, R-Winona Lake, said the state needs to stand by Daniels' word. Wolkins proposed amending Dermody's legislation by moving the start date for online sales tax collection from July 1 back to Jan. 1, 2014.
"I think we are hurting our credibility as a state," Wolkins said. "A deal was made; I'd like to stick with it."
Dermody said the General Assembly never consented to Daniels' deal with Amazon, and Indiana shouldn't give Internet retailers a 7 percent price advantage over local businesses for another year, especially when his proposal would level the playing field during the profitable back-to-school and holiday shopping seasons.
"It's about fairness to those mom-and-pop retailers that you see at home in your districts every weekend," Dermody said.
Wolkins' proposed amendment was rejected overwhelmingly by a voice vote in the Republican-controlled chamber.
A House vote to send Dermody's July 1 start date plan to the Senate is expected next week.
Hoosiers are currently required to pay 7 percent use tax on their Internet and catalog purchases, though few do. Just $1.8 million in use tax was collected during the 2012 budget year.
A Ball State University study estimates Indiana would have taken in between $39.6 million and $114.3 million that year if the state required web merchants to collect sales tax.