Online sales tax issue hurts local businesses, communities

VINCENNES, IND. (WTHI) - Hoosier retailers push lawmakers to speed up the start of collection of sales tax for on-line purchases.

The sales tax issue is one that has split the business community in the recent years.

Brick and mortar stores want the sales tax collections to begin sooner rather than later.

Almost anything you can buy in a traditional store in downtown Vincennes, you can also purchase online at some of the nation's largest retailers' websites.

The biggest difference being local stores have to charge a sales tax, while many online operators don't.

That's bringing increasing complaints to the Knox County Chamber of Commerce and state lawmakers.

"We just want a level field," said Marc McNeece at the Knox County Chamber of Commerce.  "We want to be able to compete, but you're giving them an advantage.  [If] we're hearing it at the Chamber, our legislators are also hearing it.  Not only from us, but our businesses as well."

Last year, former Governor Mitch Daniels brokered a deal with online giant Amazon to begin collecting sales tax in 2014, but lawmakers are being pressured to move that date forward to this July.

"Insuring that they are at least able to compete equally with everybody else.  That should be on the forefront of our legislators' [discussions].  Hopefully, they speed up that timetable and get that in before another major shopping season comes in," said McNeece.

While most consumers may enjoy that 7 percent break they get by not having to pay sales tax online, local business leaders say that's a penalty that hurts the community.

"Brick and mortar businesses are the ones that pay taxes," explained McNeece.  "Their kids go to your schools.  They donate to your churches.  They are the life blood of you community."

An important part of the community that is increasingly pushing back against a competition that has found a tax advantage.

Amazon does has a physical presence in Indiana and employs several hundred Hoosiers at warehouse and distribution facilities.