Indiana House Bill No. 1007 passed the House 79-18 last week and moves to the Senate for consideration. On behalf of the CCIM National Legislative Affairs subcommittee, I ask our Senate leaders to pass this bill to help protect our local businesses that have invested in our state by creating a level playing field for them.
Although most consumers might be unaware, under current Indiana law purchases made online are subject to sales tax through what is known as a use tax. Consumers who live in states with a sales tax are legally obligated to report and pay sales taxes on all purchases made online, although the majority are unaware of this obligation and very few pay this sales tax.
Conversely, brick-and-mortar retailers are required by law to collect the tax on behalf of the state. This is putting some stores out of business because online retailers are not paying the same rate in taxes.
Some argue that as different counties within a state might have different sales tax rates, collecting the tax is too high a burden to place on online retailers. However, our local businesses have done this for decades.
They also argue that states can already collect this sales tax directly from consumers, but this puts an unfair burden on both the state and consumer to report the transactions.
The CCIM Institute — CCIM grants the Certified Commercial Investment Member credential to real estate professionals who earn it — believes loss of revenue resulting from failure to collect sales tax on goods sold over the Internet is likely to place pressure on state and local governments to find replacement revenue in the form of increased, real estate and property taxes, income taxes, transfer taxes and/or impact fees.
The CCIM Institute supports efforts to simplify the collection and payment of state/local sales/use taxes. State and local governments should be able to enforce existing sales and use tax laws for both intrastate and interstate purchases.
To establish an effective and simple means of collecting of these taxes, state and local governments first must simplify their existing state and local sales and use tax systems. House Bill 1007 does this for our state and helps strengthen our local economy.