As a small business owner, I fully understand the role that competition plays in the free enterprise system. It benefits both consumers and companies by driving them to provide the best priced, highest quality products incentivizing people to purchase them.
That system works efficiently only when the companies contend on a level playing field so that no advantage is given to one company over another. Therefore, it is necessary to uproot any existing unbalance to ensure that fair competition remains in place.
This unfairness can be observed with the relationship between brick-and-motor and online retailers with a physical presence in the state. Since those online retailers were not required to implement Indiana’s 7 percent sales tax on purchased goods, brick-and-mortar stores were disadvantaged. Over the last ten years, according to the Department of Workforce Development, 50,000 retail jobs have been lost in Indiana because Hoosiers were selecting to shop online.
To level the playing field last session, former State Representative Jeff Espich authored House Bill (HB) 1119, a deal struck between Indiana lawmakers and online retailers like Amazon, establishing that online stores with a physical presence in the state add Indiana’s 7 percent sales tax on bought goods. The bill would take effect on Jan. 1, 2014 and passed with bipartisan backing and 69 percent of Hoosier support.
Since the agreement was made, four other states settled identical arrangements, each with an earlier effective date. Two of those states, Texas (July 2012) and Pennsylvania (Sept. 2012) are currently collecting sales tax while Arizona (Feb. 2013) and New Jersey (July 2013) will collect it soon.
Resultantly, with a deal struck between four states, I believe Amazon along with other online retailers would be able to move Indiana’s collection date six months forward. This will protect our brick-and-mortar stores during the holidays when competition peaks.
In order to do this, State Rep. Ed Delaney and I filed HB 1007 to move this date forward which would generate, according to Indiana Fiscal Policy Institute and the Ball State University Center for Business and Economic Research (2012), roughly between $39.6 - $114.3 million dollars more in revenue –boosting the Hoosier economy.
Over 300 brick-and-mortar retailers have expressed their support for HB 1007, and on Jan. 10th, the bill went through the First Reading and was assigned to Ways and Means.
The first of multiple debates occurred on Wednesday, Jan. 16th, and as future discussion occurs, I want everyone to know that fairness is the heart behind this bill. We owe it to our small business, brick-and-mortar retailers, to provide the most level playing field to ensure that a fair and free enterprise system exists in Indiana.
Although HB 1007 has a long journey in the General Assembly before enacted, I encourage everyone to follow this bill by visiting www.in.gov/legislative.