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Posted on Tue. Nov. 27, 2012 - 12:01 am EDT

Fallout over Net ‘holiday’

Cyber Monday revives calls to collect sales tax

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Northeast Indiana retailers sought to short-circuit Cyber Monday.

A coalition of traditional retailers and a pair of lawmakers urged the passage of legislation requiring online merchants to begin collecting state sales taxes a year earlier than originally scheduled.

The Greater Fort Wayne Chamber of Commerce, state representatives and Indiana Retail Council President Grant Monahan touted their campaign Monday – potentially the biggest online shopping day of the year.

Research firm comScore predicts Americans would spend $1.5 billion with online retailers Monday, up 20 percent from last year.

Monahan said “it’s not a level playing field.” He and the 300-member Indiana Merchants for Tax Fairness say 50,000 retail jobs have been lost in the past decade, many of them because of the rise of online retailers.

Owners of bricks-and-mortar stores aren’t running from the competition, but say everybody should play by the same rules. They hope an “e-fairness” law is in place in time for next year’s back-to-school and Christmas shopping seasons. A bill will be introduced in January.

“They way it is now, you have the government picking the winners and losers,” Monahan said. “It shouldn’t be that way.”

Rep. Matt Lehman, R-Berne, and Rep. Kathy Heuer, R-Columbia City, agree.

“Every business should be treated the same,” Heuer said.

In March, Inc. announced plans for a $150 million warehouse and distribution center in southern Indiana after state officials gave the online retailer two more years before it has to start collecting sales taxes from buyers.

Seattle-based Amazon said the center in Jeffersonville could have 1,000 employees by 2015. Construction began in February at the site just north of Louisville, Ky. Work on what will be Amazon’s fifth large facility in Indiana began just weeks after Republican Gov. Mitch Daniels announced an agreement under which Amazon wouldn’t have to collect the state’s 7 percent sales tax until 2014.

Traditional retailers – particularly small businesses – can’t wait that long, Lehman said. Chamber President and CEO Mike Landram said the business climate has to change. Monahan said retailers lose at least $1 billion a year in sales to online retailers.

Other states have pushed up their sales tax collection dates and officials have understood, he said. Texas, Pennsylvania, Arizona and New Jersey were the states mentioned.

The Associated Press contributed to this story.

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