Online shopping from Black Friday to Cyber Monday is propelling retailers like never before, but it isn’t leading to increased sales tax revenue for Indiana.
A group of Indiana businesses, called Indiana Merchants for Tax Fairness, is now pushing the state to put an end to that.
The group is upset that the state does not currently require online retailers to collect or remit sales taxes on products sold online to customers in Indiana.
"People are always looking for the deal," said Charlie Revard, who owns The Bike Line in Broad Ripple.
Though Revard says he welcomes the competition from other businesses, he says he often helps customers in his store, only to see them walk out before making a purchase because online retailers don’t charge the 7 percent sales tax.
"It's all the time, you know, 'How much is it?' The next thing they do is take their smart phone and they scan the barcode and, you know, 'I can get it here for this, and I don't have to pay sales tax,’” Revard said. “It's constant and it's getting worse. It's not getting better."
Last year a study by the Indiana Fiscal Policy Institute found that the state loses anywhere from $75-125 million in lost tax revenue each year because it doesn’t collect sales tax online.
Earlier this year the state announced that it would begin requiring online retailers like Amazon.com, which have a physical presence in the state, to begin charging sales tax but not until 2014.
Some legislators say there's no reason why that shouldn't already be happening.
"This is a state of laws,” said state representative Ed Delaney. “Currently Amazon and other companies get a handshake agreement that they don't have to collect taxes, taxes that I believe are already required to be collected. Then they get a second handshake agreement that we won't enforce the existing law."
The Bike Line does partially benefit from the current agreement because it has an online store as well, but Revard says he's still in favor of the online tax.
"Do I hate it? No. Do I wish it was fair and even? Yeah, I think that would be better for everybody," Revard said.