ELKHART, Ind. — Two proposed bills in the Indiana Legislature aim to exempt out-of-state buyers of recreational vehicles from having to pay state sales tax, even if their states don't have a reciprocal agreement in place.
Forty-one states currently have reciprocal agreements with Indiana that exempts the 7 percent state sales tax, The Elkhart Truth reported. Residents of the other nine states, which include Michigan, Florida and California, could potentially pay the tax in addition to sales tax in their home state.
Republican state Sen. Blake Doriot said numerous RV dealers have told him they've lost significant business due to out-of-state buyers going elsewhere to avoid double taxation, which he says impacts RV dealers as well as other industries in Elkhart County.
Bills regarding the state sales tax have been proposed in the past but none have been considered. That's in part because, as the Legislative Services Agencies' fiscal analysis accompanying the bill states, it would "reduce sales tax revenue to the state by a potentially significant amount."
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For the 2018 fiscal year, the agency estimates the state could lose a total of $2.6 million in revenue and $2.8 million in 2019.
But Ron Breymier, spokesman of the Indiana Manufactured Housing Association-Recreation Vehicle Indiana Council, argued that the analysis is shortsighted and doesn't show the actual impact changes to the sales tax system could have on the RV industry.
"The state is using 2012 Bureau of Motor Vehicle records to compile its stats and there is no sales data," he disputed.
Breymier said the RV industry is armed with an abundance of information that he hopes can be used to sway hesitant lawmakers.
A recent study of the RV industry shows it has a $9.5 billion impact on the state's economy and that it employs over 22,500 local residents.
Breymier said the Legislative Service Agency has not accounted for the large number of RVs that are already sold out of state and aren't required to pay any sales tax in Indiana.
"When the bill was first introduced all states were required to pay Indiana sales tax, but that has been slowly chipped away and now we are down to nine. Those nine however are critical states," he said.