Porter: Closing tax loophole will bring state millions
INDIANAPOLIS – A measure authored by State Rep. Gregory W. Porter (D-Indianapolis) that is currently making its way through the Indiana General Assembly would bring the state up to $90 million in collected tax revenue by closing a loophole in state regulations affecting remote transactions involving sellers such as eBay, Etsy, and Overstock.com.
House Bill 1352, which cleared the Indiana House with strong bipartisan support, clarifies existing policies covering marketplace facilitators, also known as affiliate sellers, who use platforms like Amazon to sell their merchandise. Through the loophole, Porter said these facilitators were able to avoid remitting millions of dollars in sales taxes.
“This bill doesn’t create a new tax, but it is a tax equity measure that clears up who is ultimately responsible for paying taxes that are legally obligated to be paid,” Porter said.
A 2018 U.S. Supreme Court decision provided states with the opportunity to impose sales taxes on remote sales with businesses that did not have a physical presence or location in that state. This decision enabled Indiana to take full advantage of legislation previously passed by the General Assembly to tax the businesses.
“Last October, the Indiana Department of Revenue implemented a remote sellers tax provision,” Porter said. “However, due to an unfortunate oversight, this provision did not include language impacting marketplace facilitators.
“House Bill 1352 would close this loophole and maximize our state’s position to collect the revenue it is legally entitled to receive,” he continued. “If this loophole was allowed to exist, it would have cost Indiana anywhere from $70 to $90 million.”
Porter’s efforts quickly gained the support of Gov. Eric Holcomb’s administration and Indiana House Republicans, and worked with him to refine the bill.
“Once fully implemented, I see no reason why we cannot use the results of House Bill 1352 to help us provide the funding for such programs as teacher pay and support for public schools,” Porter said.
The measure is awaiting action in the Indiana Senate.