Weather Updates, Indiana reach online sales-tax deal

Updated: February 11, 2012 8:15AM will begin collecting Indiana’s 7 percent sales tax from customers in 2014.

Indiana Gov. Mitch Daniels and an Amazon executive announced a deal Monday that could lead to Indiana collecting at least $20 million more a year in sales taxes.

The agreement follows a lawsuit by Indianapolis-based shopping mall owner Simon Property Group against the state over the issue and a lobbying push by traditional retailers to end what they call an unfair price advantage for all online retailers. Simon says it’s dropping its lawsuit.

Amazon severed ties with its Illinois affiliates after the state enacted a law forcing online retailers to collect the state sales tax last year.

But experts point out that Amazon is collecting the sales tax only in states where it has a so-called “physical” presence such as warehouses. That’s because Amazon has long argued that it has no responsibility to collect the tax in states where it has no physical presence because it receives no benefits from those states, according to the American Independent Business Alliance website. The website lists two Amazon warehouse fulfillment centers in Indiana — one in Whitestown and the other in Plainfield.

An Amazon spokesperson could not be reached Monday.

Gov. Pat Quinn welcomes Amazon’s willingness to re-establish its relationships with its Illinois affiliates and start collecting the sales tax here, said governor’s office spokeswoman Brie Callahan.

Meanwhile, Quinn supports efforts in Congress to enact a national online sales tax that would allow states to collect taxes from most Internet retailers. The latest effort in Congress would allow states to collect the taxes after the states simplified and standardized their collection processes.

Indiana’s deal with Seattle-based Amazon doesn’t include any other companies, but Daniels says the state is asking Congress to require all online businesses to collect state sales taxes.

Estimates on Indiana’s uncollected online sales taxes range from $75 million to $250 million a year.

— Contributing: Business reporter Sandra Guy and AP wire

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